Felix Salmon wrote about a new research project by Charles Komanoff about the costs of traffic in NYC. There is a really neat spreadsheet that Komanoff developed to estimate the various externalities and direct costs of various modes of travel and potential remedies such as congestion pricing. The two big recommendations are that buses should be free and taxis should be more expensive. This helps equalize travel costs across boroughs and opens the door for congestion pricing.
However, the spreadsheet and analysis makes an error that is all too common in transportation analysis and neglects parking altogether. Managing curb parking through performance priced meters is a very effective way to minimize congestion and travel. In parts of NYC (and elsewhere) the share of traffic simply cruising around for a curb space reaches 40 percent. By raising the price of parking the demand for auto travel will decline. The traffic reduction from eliminating cruising may be enough to reduce other direct costs such as tolls and taxi fees. This would make the overall management and use of the transportation systems fairer. The revenue generated from parking charges could be used to improve the pedestrian or bike facilities in the neighborhoods where the money is collected, or it could be used to improve transit. Any use would be better just watching it drive around the block as is the case now.