Commuting at rush hour can be pretty awful in just about every major city--New York, London, Paris, Tokyo... I wouldn't call any of those places terrible but, yes, there are a lot of people and it can be pretty mobbed if you try to travel at peak times.

How about extra pay for distributed commuters? Start your day early, end it early, start late, end it late and receive a bonus?

Many cities (including London) have peak fares for transit, trains, etc. The problem is that if you're a typical commuter you probably don't have a lot of control over your schedule. If you're asking why don't companies do this, why would they? If anything, they probably prefer people to be in the office at the same time.

Nobody goes there anymore. It's too crowded, as they say.

Actually it's not so bad - the central line at rush hour is abnormal.

It's much nicer when you cycle to work. Many parts of London are not built that densely, at least compared to other European cities.

London isn't very dense, which is part of why traffic is so bad.