Home MTA After 100 days, a plan for ‘Making Every Dollar Count’

After 100 days, a plan for ‘Making Every Dollar Count’

by Benjamin Kabak

One hundred and three days ago, Jay Walder assumed control of the Metropolitan Transportation Authority. As an incoming CEO and Chairman with a career’s worth of experience in transit, Walder set about to figure out a way to improve the MTA. As he worked to figure out how to streamline the MTA and improve services, the authority ran headlong into budget problems, and his review shifted to focus on cost cutting measures and efficient spending.

This week, as promised, Walder released his 100 days report and earlier today, he spoke at the ABNY breakfast about the plan. On the surface, his report — available here as a PDF — sweeps broadly. It highlights bus lane improvements and newer fare collection technologies. The only major new development to come out of it is a plan to eliminate tollbooths and replace them with high-speed tolling technologies to cut down on congestion. The Times covered that angle this morning.

But on the other hand, Walder’s speech drove home some points about how the MTA will be searching to improve services while cutting down on organizational efficiencies during a period of economic distress both for society at large and the agency specifically. Instead of rehashing the platitudes set forward in the report, I’ll leave it up for you to read the short, 20-page document or the even shorter press release. Here, I want to focus on what Walder said this morning.

After the obligatory introductions about the current state of the system as compared to that of the 1970s and 1980s, Walder landed on his main theme: improving the customer experience through efficient spending. Starting with the countdown clocks in the subways, he talked about how in London, train riders “had a sense that someone was in control, that your commute was not in chaos” because the clocks told riders when the next train was coming, and the train would then arrive as scheduled.

In New York, the system is different, and straphangers are naturally skeptical of the MTA because of the inherent uncertainties of riding the train. “We lean over the edge in hopes of seeing a white light at the end of the tunnel,” he said. “What comes across is a sense of angst and anxiety.”

Buses too are plagued by these same uncertainties. “It’s difficult to go more than a block or two without seeing a car or a delivery truck in the bus lane,” Walder noted. “We must convince people that, if they’re in a bus lane, they will get a ticket. If we can, the bus can become a reliable mode of transportation in New York.”

Now, these words seem to ring true every time an MTA head starts speaking in public, but Walder, with a background at McKinsey, seemed to recognize that improving the system starts with efficient spending and ends with cutting out the fat. He listed numbers: The MTA has 92 different public numbers and five call centers to handle complaints. The authority has 5000 employees doing administrative tasks. “There will be layoffs,” he said.

In terms of fiscal responsibility, though, Walder is prepared to tackle the MTA’s problems as any good consultant would. Right now, for instance, it costs the agency 15 cents to collect $1 in fare revenue. Even a savings of 2-3 cents would increase the MTA’s revenue streams by tens of millions of dollars. That, he said, is one of the driving forces behind replacing the MetroCard.

He also highlighted the need to cut wasteful services. In highlight express buses, an area I tackled this week, Walder picked on the X25, a little used route from Grand Central to Wall Street. “A grand total of 20 take this bus each day, and it costs the MTA $80 per person to run this service,” he said. “I can assure you that we won’t be running the X25 much longer.”

In the end, Walder focused on the need now during lean economic times to turn around the MTA’s internal structure. He said he’s already been working with agency heads and labor leaders to “address outdated processes and work rules that drive up the costs and hurt the credibility of the MTA and its unions.” He discussed the “once-in-a-generation opportunity” to “change how the MTA does business.”

Of course, Walder’s actions this year will speak louder than words, but Walder seems to understand the challenges he and the MTA face in the eyes of a skeptical public. With the speech behind him, the tough parts — the cost-cutting, the realization of savings, the service improvements, the move toward an efficient transit organization — have only just begun.

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Russell Warshay January 15, 2010 - 1:00 pm

The MTA also has a copy of Walder’s speech here.

I’m intrigued by this part:

…the MTA has gone through plenty of mergers, but its never done the management part. It shouldn’t be a surprise then that the organization is not nearly as efficient as it needs to be.

Let’s say you want to call the MTA to ask a question about transit service or report a problem. You’re in luck! We have a choice of 92 different numbers for you to call, and we operate 5 separate call centers. This is one of the reasons we still have over 5,000 people doing administrative tasks.

Its encouraging that this is acknowledged. Now we just need the MTA to detail how they will execute administrative consolidation.

Marc Shepherd January 15, 2010 - 1:45 pm

It is notoriously difficult to re-organize government agencies as if they were in private enterprise. Heck, even in private enterprise it sometimes fails, e.g., the AOL Time-Warner merger. I wish him luck.

To his credit, he has worked at the MTA before, so presumably he understands the cultural obstacles to getting this done. If he were some hotshot who had never worked there before, I would given him zero chance of succeeding.

Older and Wiser January 16, 2010 - 11:47 am

Interesting that you mention the AOL-Time Warner merger in this context, because that’s the paradign Mr. Walder seems to be following. It’s a paradign basically unchanged in the twenty or so years since the McKinsey firm (or was it Price Waterhouse?) first recommended much of this sweeping overhaul when engaged by whomever was in charge at 370 Jay Street at the time.

An alternate approach would be the Warren Buffet/Berkshire Hathaway arms-length holding company model. When Warren decide to acquire the country’s largest railroad system recently, he didn’t spend one second planning how to merge the railroad’s facilities or admin functions with those of other companies in the Berkshire portfolio.

Under the Buffet paradign, all MTA property and facilities located within the five boroughs would be under mayoral control, with the suburban county executives negotiating access rights to Penn Sta & GCT from the city for the commuter railroads, both of which would be under suburban control.

The MTA was originally conceived as insulating the several agencys’ money matters from ever-shifting political currents, but it has instead ended up becoming the mother of all political footballs.

E. Aron January 15, 2010 - 1:54 pm

I’m not sure that ticketing bus lane only violators is a viable solution to that immense issue. I don’t exactly know how many thousands of miles of bus lanes there are in the city, but I am sure that effectively patrolling them is virtually impossible.

As for informing customers of impending service changes, a recent ride on the 4 train featured a “plan ahead” announcement that informed passengers of next weekend’s service interruption. I thought that was a great start towards better dissemination of that kind of information.

Andrew D. Smith January 15, 2010 - 6:23 pm

I have trouble understanding the argument that the city can’t afford the patrols needed to keep other vehicles out of the bus lanes.

I realize that cops — even traffic cops — are pretty expensive, probably about $100 an hour when you factor in benefits and pension contributions. But if they’re writing tickets, then the revenue they generate more than covers the costs they produce. The only thing that will make enforcement a money-loser is if it succeeds in its aims and gets people out of the bus lanes.

But even if you don’t buy that, it would only cost you a couple hundred dollars per bus to install cameras and computers that would photograph any vehicle in a bus lane and mail a ticket to the owner. After a few tickets, people would get the message.

Todd January 15, 2010 - 2:10 pm

“train riders “had a sense that someone was in control, that your commute was not in chaos” because the clocks told riders when the next train was coming, and the train would then arrive as scheduled.”

So they’re putting up the signs to give a false sense of control over spotty service? Why not spend that money on upgrading signals and the like to actually improve service>

Marc Shepherd January 15, 2010 - 2:18 pm

He is absolutely correct about the customer perception. Even when service is running on schedule, one wants to know when the next train or bus is coming. The problem becomes even more acute when there are delays, which will happen sometimes even with the perfect signalling system.

Wayside countdown clocks aren’t exactly a novel idea; other places have had them for years.

Andrew January 17, 2010 - 11:11 am

If the customer has choices, it’s more than a matter of perception. If you want the express, but you see that the next express is 10 minutes away, and the local is pulling in, you’ll take the local. Not only will that get you to your destination sooner, but it will reduce the overcrowding (and further delays) on that delayed express. Similarly, if the local is delayed and you’re going to a local stop, you might opt to take the express and walk or take a bus from the nearest express stop.

Ed January 15, 2010 - 10:14 pm

Actually, even the current LED displays showing the current time in the subways are nice, it means in the winter I don’t have to peel my glove/ coat off to look at the time, and if you look at the display as soon as you get on the subway and then shortly before finishing the trip you get some idea of how long the trip has taken, and can compare it with other times you have used the line.

I did have a situation today where arrival boards would have been useful, at the West 4th Street station where I was going far uptown. Will the D come first or the A, or will one be delayed a really long time, or did one just pass through the station. LED displays in this instance would have beaten running up and down two flights of stairs to peer through two tunnels, even if the current arrangement is better for my cardiovascular health.

rhywun January 16, 2010 - 1:39 am

You raise a good point. I was ambivalent about arrival times — I mean, the maximum you have to wait is 20 minutes, right? — but yeah this could help in situations where you have a choice of more than one train.

Ray January 15, 2010 - 10:18 pm

Well worth the 100 day wait. Thank you Chairman Walder. I’m rooting for you.

StreetsPariah January 16, 2010 - 12:37 am

Who is going to do the ticketing when it’s the cops who are often blocking the bus lane? (Have you seen 34th Street?)

But regardless, bravo, Mr. Walder. Here’s hoping that maybe you can pull some of these things off.

rhywun January 16, 2010 - 1:44 am

I was wondering the same thing. One can only hope that Mr. Walder is tight with Mr. Bloomberg, who maybe has the ear of Mr. Kelly? But yeah, our police force has enjoyed complete immunity to any and all traffic laws for pretty much forever. That is a culture that will be very difficult to change.

Alon Levy January 16, 2010 - 2:19 am

Right now, for instance, it costs the agency 15 cents to collect $1 in fare revenue.

On forms of transportation that aren’t subways, the current MTA practice of paying the driver directly on buses and having a conductor check tickets on commuter rail are inefficient. In both cases, a proof of payment is vastly less expensive, and is one of the reasons German and Swiss trains routinely run at high farebox operating ratios.

On commuter rail, passengers would purchase tickets the normal way, but instead of multiple conductors checking all tickets, there would be a small number of fare inspectors, checking tickets only on a few trains. The fine for not having a valid ticket should be high enough to discourage fare dodging.

On buses, the rule would be that anyone holding a valid unlimited MetroCard can board freely from any door; if a fare inspector came on board, the passenger would present the card, and the inspector would have a handheld reader to check that the card is valid. Passengers without unlimited cards would pay at a farebox at the front as usual, while stations would be gradually renovated to include ticket vending machines, just like on the SBS in the Bronx.

In both cases the bonus for using an unlimited monthly should be high, in order to encourage people to use the faster boarding method and reduce the need for ticket-vending machines. The next-generation MetroCard should adopt the German solution of annual cards, which are like unlimited monthly cards except that every month the fare is deducted automatically from the passenger’s bank account, reducing the need to buy new cards.

pete January 16, 2010 - 6:52 pm

Proof of payment on fordham SBS has been a failure according to some. You can’t hire enough inspectors. Plus they must be officers to issue fines, which means union, benefits and pension. Probably needs to be armed when they confront a skel. Also the turnstyles keep out a little bit of the riff raft (I know you can jump). How would proof of payment work on all the homeless who live in the subway? Would an inspector only check the trains or anyone on the platform?

For some getting arrested for unpaid fines means 3 hot meals and a bed at rikers. They still won’t get tickets, the risk is too low.

Alon Levy January 16, 2010 - 7:19 pm

On the subway, proof of payment doesn’t make sense, because the passenger volumes are high enough that the cost of turnstiles and station agents is lower than the cost of fare inspectors. On buses and commuter rail, turnstiles are used when ridership is very high as well, as in the cases of Tokyo’s rail and Curitiba’s BRT.

Why do fare inspectors need to be armed to confront a fare dodger? Train conductors and bus drivers aren’t armed. And why do they need to be officers? The fine isn’t really a fine for a crime, so much as a charge for getting a ticket on board.

And the SBS proof of payment system does not fully use the benefits of the idea. It does not let people with unlimited cards board without prepayment, which would both speed up boarding at crowded times and reduce the incentive to cheat. In addition, the unlimited monthly bonus may not be high enough to be such an incentive – it costs 46 times as much as a pay-per-ride with the bonus, which means that for people who commute twice a weekday, it’s a wash.

Andrew January 17, 2010 - 11:15 am

Proof of payment is only a failure according to those who think the goal is for guaranteed inspection on each ride. That’s not the goal – the goal is for the risk of being inspected, and the fine for not having a valid ticket, to be great enough to encourage nearly all riders to pay the fare.

The homeless would no longer be able to live in the subway under a POP system. That would be another benefit. Even systems with turnstiles have occasional ticket checks – perhaps that’s something we should adopt here.

rhywun January 17, 2010 - 10:39 pm

I have always been a big fan of POP, having lived in Germany and experienced it for myself. However, even I have to admit that it probably wouldn’t be nearly as successful in NYC if only for cultural reasons. Not to put too fine a point on it, I think Germans are generally more likely to obey these sorts of regulations than Americans, and especially New Yorkers. That said, it COULD work if the fines were high enough–and if the system isn’t set up to be easy to beat like traffic violations are.

Totally agree on the point that the unlimited card should have a good bonus. The current bonus is pretty paltry. So paltry that in months when I have a vacation, I’m actually losing money.

Alon Levy January 18, 2010 - 6:58 pm

Ideally, the implementation would involve having a large number of inspectors at first (e.g. redistributed train conductors), ratcheting down as time goes on and people get used to buying unlimited ride tickets (e.g. retirements without new hires, plus increases in ridership reducing the number of inspectors to pay per rider).

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