'This might be the thing that breaks us': NYC businesses are furious with new law that hurts their bottom line
When New York City announced plans to move forward with congestion pricing in early 2025, commuters weren't happy. The purpose of congestion pricing is to pump more revenue into the city and alleviate traffic by discouraging visitors to enter by car.
However, it's not just people entering NYC who are unhappy with congestion pricing. The policy is hurting local businesses, too.
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NYC restaurant owner Christophe Caron of Delice & Sarrasin fame says running his restaurant has become more expensive since congestion pricing started in January. And the problem has gotten so bad that he's not sure his restaurant will be able to hang on.
"We've survived a lot, but this might be the thing that breaks us," Caron shared with Fox 5 New York News.
The restaurant industry as a whole has taken a bit of a beating in the past five years. In 2020, stay-at-home orders hurt many NYC-based restaurants that rely on steady foot traffic to offset the high cost of rent.
Once that situation eased, inflation started soaring, hurting restaurants' profits. And it's been a problem ever since.
On a national scale, nearly 80% of restaurants reported rising food costs in 2024, according to Restaurant365's 2025 State of the Restaurant Industry Report. Labor costs also rose for 90% of restaurants.
The National Restaurant Association also reports that inflation is straining restaurants, and that between February 2020 and June 2024, food costs for the average restaurant rose 29% while labor costs rose 31%.
But that's not all. Expenses like rent, supplies and credit card processing fees have also risen, straining restaurants even more. Throw in congestion pricing, and NYC restaurants are truly having a tough go.
Andrew Rigie, executive director of the NYC Hospitality Alliance, says many restaurants are now looking at not just higher costs, but fewer customers.
'While some restaurants have unfortunately reported a drop in business due to congestion pricing, many have also told us that their vendors have raised prices or added congestion-related fees to their bills — making it even more expensive to operate a small business in Manhattan,' Rigie shared with AMNY.
Caron has seen his costs rise substantially since congestion pricing was implemented early in the year. Now, some of his suppliers have started adding a $10 delivery fee per order to cover the $9 congestion price toll they're being hit with.
"The cost of food has already gone up," said Caron. "Now they're making it harder to even get it to the kitchen."
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The purpose of congestion pricing in NYC is to reduce traffic as well as air pollution and emissions. Congestion pricing was also implemented to raise revenue for public transit improvements, but critics of the program are quick to point out that it's just another money grab for NYC.
According to Allwork.Space, more than 700,000 vehicles drive into Manhattan every day. Now, drivers have to pay an extra $9 to enter Manhattan's Congestion Relief Zone between 5:00 a.m. and 9:00 p.m. daily.
Congestion pricing also applies on weekends between 9:00 a.m. and 9:00 p.m., which means it's not just daily commuters who are looking at higher costs. Visitors from surrounding suburbs are also going to be charged a premium to enter the city by car on weekends.
Daily commuters may have no choice but to pay congestion tolls since they have to get to work. But if visitors from nearby areas decide they're not willing to pay the extra money, this means a lot of local businesses, including restaurants, could see a serious decline in weekend foot traffic. That's a hit that many restaurants can't afford.
To be clear, it's not that congestion pricing just goes away outside of the aforementioned hours. Rather, the $9 toll decreases to $2.25. But all told, people looking to drive into NYC have few options for avoiding congesting pricing.
Of course, part of the purpose of congestion pricing is to encourage people to access NYC by public transportation. But that can be prohibitively expensive in its own right.
A roundtrip ticket to NYC from nearby New Jersey can cost upward of $34 for one adult. This means a couple is looking at spending more than $70 on public transportation for a date night in Manhattan, making congestion pricing the more economical option — 'economical' being a relative term.
Taxis, app-based for-hire vehicles and sightseeing buses are also subject to congestion pricing. These costs, as they get passed along to customers, are likely to drive consumers away.
All told, local businesses in NYC could see a drop in visitors as more and more people say no to congestion pricing. So while the extra revenue might help the city, it could be just the thing that shutters more local businesses and drives costs up even more for residents.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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