Everyone that I’ve ever heard mention ‘induced demand’ with respect to roads does so while advocating against the construction of additional infrastructure capacity for passenger vehicles (cars). This correlation is consistent enough that it does indicate some sort of ‘induced demand paradigm’.
I agree that ‘congestion pricing’ does impact traffic, but it does so by changing the cost function, and granting the city government additional revenue from (usually poorer) people who it is not accountable to.
Yes, it's definitely the case that a lot of mass transit advocates are confused about this and talk about induced demand in an unproductive way.
New York City's congestion pricing scheme was approved at the state level, so it's not true that people living outside the city didn't get a say—though people from New Jersey didn't, and can reasonably complain.
It's theoretically possible that congestion pricing could be welfare-reducing if peak demand is inelastic enough. If this were happening, then (1) traffic wouldn't fall much unless the price were raised to extremely high levels, and (2) frequent commuters would be ones most harmed by the policy and would be its most fervent opponents. In New York, we see the opposite: traffic has fallen sharply and frequent commuters are the policy's biggest fans (https://pfnyc.org/news/new-poll-ny-voters-say-congestion-pri...). Similar things have been seen internationally in other cities; people often initially resist having to pay for something they're used to getting for free, but once it's in place, it's durable and popular because people don't want to go back to traffic jams.
Whether congestion pricing is welfare-positive really depends on your utility function. I think rich commuters probably like it, and poorer people who need to drive for work probably hate it. My concerns are more related to political accountability, political incentives, and discrimination against non-voters, all of which exist here.
I agree that ‘congestion pricing’ does impact traffic, but it does so by changing the cost function, and granting the city government additional revenue from (usually poorer) people who it is not accountable to.