2/27/25 Update: The federal government ordered New York City to eliminate congestion pricing by March 21, but Governor Kathy Hochul is pushing back against the order and the Metropolitan Transportation Authority (MTA) has filed a lawsuit.
2/19/25 Update: According to CNN, the Trump administration is moving ahead with its plan to kill New York City’s congestion pricing. U.S. Transportation Secretary Sean Duffy said the Department of Transportation would rescind the agreement, effectively ending the tolling structure, which went into effect early this year.
As the new year began, so too did a new congestion pricing toll in New York City, specifically requiring drivers to pay $9 in the busiest part of Manhattan, south of 60th Street. Intended to reduce traffic gridlock while raising funds to improve the Big Apple’s public transportation infrastructure, the toll is expected to significantly reduce the number of cars in the city during peak times—but at what cost to restaurants and bars gracing the congestion pricing “zone"?
“We'll monitor over time to see how the new congestion pricing impacts those coming into the zone to spend money at bars and restaurants, but what is already clear is that suppliers to small businesses are adding surcharges or increasing prices to offset the tax, making it even more expensive to operate a small business in Manhattan,” says Andrew Rigie, executive director, NYC Hospitality Alliance.
Terence Tubridy, co-founder and owner of IGC Hospitality, which owns several venues in Manhattan, says it's still too early to tell how this toll is affecting restaurants as January is always a little slower, and bitter cold, but ICG Hospitality has seen a slowdown on weekends.
“People will think twice, and these barriers of entry are the last thing we need in this area,” says Tubridy. “There was little congestion outside of December on weekends in the ‘zone.’ It just seems like an unfair burden put on businesses like ours on weekends. We are trying to draw people to Midtown on weekends, not dissuade them.”
One of IGC Hospitality’s biggest concern is how this affects staff as most, if not all of their staff, live outside the zone.
“Some drive because they live in ‘transportation deserts,’” Tubridy says. “Others drive because they have a legitimate fear of traveling on subways early or late at night. Mostly, staff and guests look for other ways because the subways are unreliable, especially on weekends.”
“We are seeing some restaurants offering discounts and that's amazing, but for us, we are looking at the long term. If the toll is to work, then Grand Central, Penn Station, and Port Authority areas should see an uptick in foot traffic,” Tubridy says. “We are looking to increase our marketing to those customers choosing not to drive in, more so than the customer who already does.”
Clinton Hall, operated by The Lure Group, is among several Manhattan restaurants offering creative incentives to offset the new congestion-pricing toll. Owner Aristotle “Telly” Hatzigeorgiou announced that Clinton Hall’s Manhattan locations – including those at West 36th Street, East 51st Street, and the Financial District – will offer $9 off tabs of $100 or more for those who drive in.
Hatzigeorgiou explained that it's a way to take a bit of the sting out of congestion pricing. By offering this discount, Clinton Hall aims to show gratitude to its patrons while addressing the challenges posed by the new fee.
For Richie Romero, restaurateur and owner of Sushi By Bou, there are three main areas of concern around the new congestion toll.
“First of all, the impact of guests visiting a congested area—not just from above 60th Street, but also from Brooklyn, Queens, Bronx, Staten Island, and New Jersey. For decades, the 'Bridge and Tunnel' have been a significant part of building and supporting Manhattan’s bustling industries,” Romero says.
In addition, the uptick in costs of deliveries and services from congestion fees is cause for concern as most companies have already added necessary surcharges for congestion prices. This is a significant charge, in addition to the rapid inflation of food costs in the last five years.
“Also, most of my employees don’t live in Manhattan, work late hours, and their commute back home is usually late at night. If the MTA made the investment into a more efficient public transit system that was more dependable, cleaner, and safer, it would be the obvious solution,” Romero says.
Romero noticed an impact immediately in January, generally the month with freezing cold temperatures, a month that everyone in New York hospitality wishes they could take off their calendar.
“With the new pricing, business is slower than ever as less patrons are coming out and commuting from outside the city. It’s unlikely to convert ‘Bridge and Tunnel’ drivers into public transit commuters, especially with a broken, unsanitary, and unsafe system,” Romero says. “There are too many local options all over the tri-state to justify staying local during this weather, and not adding more charges to an already expensive night out.”
Romero adds that feedback from customers is that a very high majority are against the toll, and it completely deters those from outside the zone to commute and visit.
“It’s just yet another tax in a city with too many high taxes to begin with,” Romero says. “Some of us are fighting for our patrons. Our company’s simple venue is reimbursing $9 back on every tab to help offset these charges.”
Looking ahead, Romero says the additional toll will make it hard to hire dependable staff with flexible schedules. And businesses will suffer from the customer not wanting to spend more money on tolls for that night out, especially if they’re already paying for bridges, tunnels, parking meters, and lots.
Abraham Merchant, CEO of Merchants Hospitality, says one of the biggest concerns among restaurants include higher expenses due to delivery trucks incurring tolls, potentially leading to increased menu prices as costs are passed down the supply chain.
“Suppliers entering the congestion zone face increased costs due to tolls, which are impacting restaurant operations and raising overall costs,” Merchant says.
Also, he says that some patrons have expressed concerns about the additional costs of dining in the congestion zone, while others appreciate restaurants’ efforts to offset these expenses through discounts and promotions.
“Restaurants may need to adapt by revising pricing, adjusting delivery schedules, or exploring new supply chain options to manage the increased costs,” Merchant says. “While the long-term effects of congestion pricing on the restaurant industry are yet to be seen, restaurants are proactively finding ways to address challenges and maintain a strong connection with their patrons.”