At the end of this post is a poll about how you think the MTA should balance its budget. Scroll down or click here to vote.
For 44 years, from 1904 to 1948, subway fares in New York City cost riders one nickel. The Buffalo Head became the symbol of a subway ride for millions of New Yorkers, and by 1948, the five-cent fare had become a political issue. Those running the city’s transit systems could not sustain the system on five cents per ride — or the 1948 equivalent of two cents in 1904 money — but politicians ran populist campaigns focused around saving the low subway fare.
If that sounds familiar, well, that’s because it is. History has a funny way of repeating itself in local politics, and the subways have long been used as a political football of sorts. Fiscal improprieties and fare hikes have been the cause of politicians for decades even as the very same politicians refuse to find adequate funds for the underground veins of New York City.
Recently, we’ve seen all sorts of fare and fiscal shenanigans involving the MTA. When the Board had to raise fares in 2008 to cover an expected economic shortfall, then-Gov. Eliot Spitzer pushed to maintain a $2 base fare while upping the price on the rest of the MTA’s fare options. In 2009, the MTA raised fares by approximately 10 percent as part of the Albany funding package.
And so we arrive in 2010. Nearly a year ago, the agency vowed to avoid a fare hike this year, and we’re seeing that political drama in the form of service cuts play out. Were a fare hike on the table, the agency would be in line to raise the fares in four consecutive years and potentially five out of seven years for a biannual cost-of-living fare adjustment is likely in 2011. This hike — a centerpiece of the Ravitch Report designed to free the MTA from some economic uncertainty — remains up to the discretion of Albany as Ravitch’s recommendations were not adopted.
As the MTA unveiled its fiscal problems to the city in December, the agency clearly did not believe it to be politically expedient to put forth a budget balanced on the backs of a fare hike. In fact, not once did anyone at the authority mention a fare hike. Rather, as the end-of-year returns and 2010 projections rolled in, the MTA quickly embraced service cuts. Although many of these service cuts could be viewed as refinements that should better help the MTA address transit needs, the fact remains that these are cuts through and through. In particular, the Student MetroCards are a prime example of that trimming.
Over the last few weeks, many have asked me why the agency didn’t consider a fare hike and what a hike proposal would potentially look like. We’ll start with the latter question. In general, a one percent increase in fare yield — or money collected — will lead to an increase in revenue at the MTA of approximately $50 million. To cover the 2010 budget gap — estimated right now at around $350-$400 million — the MTA would have to increase fare yield by eight percent. That doesn’t correspond directly to a fare increase of eight percent because of the agency’s discounts, but we could assume an increase of 10 percent. A 30-Day Unlimited Ride Card would probably be nearing that magical $100 mark, and everything else would increase accordingly.
So why didn’t the MTA go this route? As I explained above, politics played no small role in this decision. The agency seemingly did not believe it could renege on its promise to avoid a fare hike this year, and it had a better card to play. By throwing down the Student MetroCard issue and forcing politicians to respond to charges of underfunding student transportation, the MTA could hope to generate more political agita that should result in more student funds. At the least, it’s a safer bet than anything fare related. There, politicians would stomp their feet and approve another fare hike.
In the end, though, we pay through service cuts. We will see train headways increased, load guidelines revised, neighborhood bus routes restructured and eliminated and service generally slowed down. Eventually, we’ll have to pay higher fares or else the MTA won’t be able to sustain an adequate transit network for New York City. With these cuts, the authority is beginning to run up against that boundary.
So in the grand tradition of bloggers who don’t have the right answer to tough questions, I leave you with a poll. Would you rather have a service cut this year or fare hikes? I err on the side of fare hikes simply because services rolled back take a long time to restore; the fares will eventually go up anyway. Not everyone agrees.
55 comments
I would gladly pay $4 a ride to save the Q26 than the 20 minute walk to the insanely slow Q27
I can’t answer that question. It depends on what’s being cut. Some things should be cut. Express buses are extremely costly to operate and shouldn’t all remain. The M-V combination might be a good idea even outside the context of service cuts. On the other hand, it by “service cuts” you mean a straight across-the-board 10% reduction in all existing service, including rush hour service on lines that are already overcrowded, then that’s obviously a bad idea.
Express Buses are commuter rail/subways in areas many miles from the nearest subway and commuter lines. They are filled ever rush hour. I’m sure the express buses have lower operating costs than LIRR. Paying $5.50 a ride for an express bus is practically the same price as LIRR. LIRR should be cut or bustituted before express buses.
Here’s where the tables in the service cut PDF come in handy.
http://www.mta.info/mta/news/b.....0-nyct.pdf
On page 14, we see that, on weekdays, the average cost per express bus rider is $16.42, with an average fare paid of $4.22. That’s a 26% farebox recovery ratio, or a subsidy of $12.20 per passenger trip. (On weekends, the situation is a little bit better – a 33% farebox recovery ratio – presumably because there isn’t such a strong peak and because only a few of the stronger routes operate on weekends.)
Page 8 gives the numbers for local buses. The average cost per weekday local bus rider is $2.73, with an average fare paid of $1.14. That’s a 42% farebox recovery ratio, or a subsidy of $1.59 per trip.
The PDF doesn’t seem to give comparable numbers for the subway, but the farebox recovery ratio on the subway is substantially higher. I also don’t know the numbers for the commuter railroads off the top of my head, but I think they’re slightly over 50% – and they’re certainly well over 26%!
Incidentally, you say that express buses “are filled ever[y] rush hour.” You probably mean that all of the seats are full. Guess what – if a subway train with 300-600 seats only(!) carries a seated load during rush hours, it’s liable to be cut (look at the southern end of the M). During rush hours, subway trains aren’t considered full until they’re carrying between 110 and 175 people per car (depending on car size). Even off-peak, the subway loading guideline is being raised to 125% of a seated load.
So what this boils down to is that subway and local bus riders are effectively subsidizing a small number of wealthier express bus riders. Pardon me for not having much sympathy for people who can’t be bothered to look at a subway map before deciding where to live. If access to the subway is important, then find somewhere to live near the subway. Even without express buses, local bus service to the subway or ferry is still available, at far lower cost to the public.
I work with a number of regular express bus riders. They don’t ride the express bus to save time – in fact, they’ve told me that they’d often get home sooner by subway or ferry and local bus. They ride the express bus so they can relax, with a comfortable seat essentially guaranteed and with the undesirable members of society essentially excluded. Yet those undesirables who are standing on the train are subsidizing their luxury rides!
Express buses, as they currently exist in New York City, tend to be political gifts to well-to-do neighborhoods. Perhaps we should be looking elsewhere for ideas on how to configure and price express bus services.
If you want farebox operating ratio data for the various agencies, look at the National Transit Database. There are no recovery figures, unfortunately, and the database lists capital expenditures rather than capital depreciation, making it hard to compute the true farebox recovery.
For New York area agencies, the numbers are,
NYCT buses: 35%
Subway: 67%
Long Island buses: 33.5%
Bee-Line buses: 36.3%
Metro-North: 58.6%
NJT buses: 41.8%
NJT commuter rail: 55.5%
NJT light rail: 18.3%
PATH: 45.2%
LIRR: 48%
MTA Bus: 29.7%
The Staten Island Railway is not in the NTD link, which only includes the top 50 transit agencies in the US.
Until the MTA proves it can’t pursue savings through attrition and through cutting waste and fraud, I cannot vote for either of these choices.
That is the height of irresponsibility. By law, the MTA must balance its budget. If you think you can identify $350–400 million of “waste and fraud” that could be eliminated from this year’s budget, without touching service or fares, I wish you good luck.
We won’t know until somebody tries, will we? This agency currently has zero motivation to identify such cost savings, like any government agency, and therefore logic dictates that there should be vast savings to achieve there.
Walder says that 15% of the MTA’s $4.3 billion in farebox revenue is spent on fare collection and processing. This is outrageously high, and out of sync with East Asian and Continental European standards. Commuter trains do not need 5 conductors each, buses do not have to force people to board at the front and wait at the station until everyone swipes, and lightly used stations do not have to have multiple ticket vending machines each.
Bear in mind, none of this can be fixed in the immediate term, since it requires a bit of technology. Proof of payment requires either ticket validation machines, as on the Fordham SBS, or handheld card readers for ticket inspectors, as on the Singapore bus system. It also requires fitting commuter trains or stations with places to swipe.
It is right to commend Walder and his team for taking advantage of a fiscal crisis by FIRST putting the Student Metrocard obligation with its rightful owners and “refining the system to better help the MTA address transit needs.” Once administrative and service cuts are enacted the MTA board can argue for a fare increase next year.
What about getting the $100 Mill that Ratner promised? What about getting the customary Payment In Lieu of Taxes from Related?
The base fare should be $3.00 and there should be NO discounts.
By NO discounts do you include unlimited ride metrocards in that? If so, a flat $3 per ride would be astronomical. Commuters would play around $132 per month just to get to and from work, not counting any other rides they inevitably will need to make. Not to mention tourists who ride all over town all day long – it would be outrageously expensive.
If you just mean eliminate the “buy $x get x% free” type of discounts, I’d be fine with that. There’s not really much reason for it, as the unlimited ride cards will usually be a better buy for people who would be getting the big discounts.
However, it’s possible they actually make more money (through unused card value) by offering the discounts. People buy more than they need so they get the discount, then lose the card. If there were no discount they’d buy less each time rather than enough to get a discount.
Without bulk discounts, there would be little disincentive to pay for one or two rides at a time, the MTA would need to purchase and maintain many more MetroCard machines to accommodate the more frequent purchases.
Not only would the MTA need to purchase more ticket-vending machines, but also it would be difficult to implement swipe-free access for people with unlimited cards. If having an unlimited monthly meant you could get on a bus without swiping, it would substantially cut dwell times, improving bus performance. It would also make it difficult to introduce tap card technology, which in other cities comes with a substantial discount in order to prod people into switching. Finally, it would increase the number of ticket vending transactions, increasing fare collection costs.
I’ve come to two separate beliefs over the past couple years of this insanity:
– The MTA should be split up into its urban (subway + buses) and suburban components. The only achievement in combining the two has been to give political cover to politicians from the city/suburbs to moan and groan and bitterly accuse the suburbs/city of getting more funding.
– The subway+bus system should charge as much as it needs to to balance its budgets. If the city/state want lower fares then they can subsidize. This stupid nonsense of “I’ll wait until the MTA does X before supporting Y” is just a canard, a way of saying “I don’t want to take a position.” Someone’s got to pay for the damn thing, or cut services.
Of course there’s slop, slack, corruption in the MTA: there is in any large organization, especially private corporations. Just because you don’t see it doesn’t mean it doesn’t occur.
The MTA was *created* so that Bridge and Tunnel and suburban-line revenues *could* subsidize subway operations. Well-heeled commuters from the burbs pay more than city residents do for transit, but it sure doesn’t cost any less.
That is inaccurate – on that one [well-heeled commuters from burbs pay more than city residents] , I have to side with Bloomberg, when he demands to take control of NYC TA and bridges & real estate – if those well heeled burbs can supports those LIRR & Metro North – as Bloomberg wished them good luck.
LI Bus is paid entirely by Nassau county. Thats a start.
When did Bloomberg ask for control of NYCT and MTA Bridge and Tunnel? I don’t think he ever has. Look at all the flack he’s getting over schools. MTA is working as designed; protecting the real estate lobby and our elected officials.
Not quite – the LIRR had been bankrupt for decades before the MTA was formed, and the creation of Metro-North was spurred by the bankruptcies of its Penn Central and Erie-Lackawanna predecessors.
In fact, MTA Bridges & Tunnels subsidizes the other divisions of the MTA, both NYCT and the commuter railroads.
Bridge and tunnel users subsidize subway operations only if you ignore the fact that large portions of the cost of the auto infrastructure are actually buried in the general revenue. All local streets are paid for out of the general fund, for example, and even federal roads can tap into general funds at will. As for suburban transit, well, those lines are far more heavily subsidized than city transit–as is any less heavily-used transit.
Well, if one thing came out of service cuts, it’s the V to Metropolitan Ave rerouting, which many people on here seem to think is a GOOD thing! Nobody would have even thought of it if there weren’t this push to alter service to save money.
The V to met is ONLY a good thing if you like LESS service. It is a service cut!!
It’s also a good thing if you happen to want a one-seat ride from Middle Village to Midtown.
Delaying or postponing fare increases only means a bigger increase in fares down the road. The example of the original 5¢ fare doubling to 10¢ in 1948 shows what happens when the fare increase is postponed, postponed, and postponed. The increase, when it does happen, gets very big. Better for small increases over time, almost like what happens to the price of gasoline.
You have a good point about the imprudence of postponing inevitable fare increases. But keep in mind: as recently as 1995 the fare was just $1.25 — now the fare sits at $2.25… that’s a 80% increase in 15 years.
As recently as 2003, just 7 years ago, the fare was $1.50 — today’s $2.25 fare is 50% more.
Fares HAVE been increasing, but the rate of that increase is particularly alarming. Personally, I’ve always been a fan of a peak/off-peak fare structure, with a $0.25 surcharge between 12am-5am. Since the late-night service is the most costly to operate, those who utilize it (including myself, often, on weekends) should help cover their share.
No, that’s not an 80% increase.
In 1995, the fare went up from $1.25 to $1.50. A few years later, MetroCard was introduced, with substantial discounts for frequent riders and with free transfers between subways and buses. The effective fare now for riders taking advantage of the 15% bonus is $1.96 – a 31% increase over the $1.50 fare. Unlimited riders presumably come out even better (or else they wouldn’t be using unlimiteds). People who transfer between the bus and the subway are paying 35% less than they were in late 1995!
I have to second that. Even with the recent fare hikes the fare is lower than it was before free transfers were introduced–a fact that the MTA is more than willing to trumpet in subway ads that have appeared recently.
The introduction of the MetroCard made fares drop like a stone in the 1990s. Between 1995 and 2003, the fare went from $1.50 to $1.13 for people using an unlimited monthly; in real terms, it’s a 38% decline even without accounting for the free transfers. The fare has increased since, but it’s still about 25% lower in real terms for someone using an unlimited monthly the average number of times. (If you use a pay-per-ride, it’s only 7% lower).
Ben, I think you’re testing the waters with the wrong crowd. I hazard to say that your readership is most likely financial secure and would gladly pay more if it meant retaining the current level of service, and made the system financially solvent to deliver on its promised improvements.
I know that I would pay twice the fare if I knew that the system would run in top shape with high levels of service, but that may be because I can afford it, and the subway is my best option (I don’t drive, and I live near 11 different subway lines).
I, for one, live on loans and have a crappy commute, but I still recognize that public transportation is essential for sustainable living. I’d pay up to $100 for my unlimited monthly (so long as they don’t raise the fare say, oh, until 2015? Wishful thinking…) for robust pubic transportation because I’m ideologically inclined, not because I can afford it.
What’s painful is that there is a perfectly viable source of revenue in the form of East River tolls – but get in the way of a suburbanite and his or her car – and watch out! (Recall the uproar of a $25 license plate fee – once every 10 years! That’s peanuts!!!)
I live on government aid, EBT and a modest income. But I do think the fare structure needs to be readjusted. And we need to recognize that the fare structure is balanced against the city’s poorest: the poorest are the least likely to buy tickets at a volume discounts so 30 day and 14 day prices should be raised, I also think that subways are a premium service and that should be recognized in pricing (it is, but even more so). So like with these latest round of cuts, there are ways to make adjustments that fit equal out costs while not overly taxing the city’s poorest.
I believe in smart transit hikes over service cuts of any stripe. Are there under-utilized routes? Yes. But they are possibly vitally important to those that DO you use them.
I don’t believe that the impact of fares on the poor should be factored in. It is not the MTA’s responsibility to redistribute wealth.
Take something far more important than transportation, like food. The government does not force retailers to sell at prices that are affordable. The only intervention in the market place, in the supply chain, are agricultural subsidies, and these only benefit agribusiness. Government does get involved in a sensible way, by providing vouchers to those in need, so that they can buy food.
It is my belief that the City/State/Federal (take your pick) should provide TransitChek cards to those in need, and not force agencies like the MTA to do their job for them.
Agreed.
And, to dispel the recurring claims that congestion pricing and bridge tolls are regressive, those TransitChek cards should also be valid for toll payments.
I agree with this. All forms of transportation should be priced at market rates, with a (temporary!) safety net for those who need it. Anything else leads to… the problems we’re seeing now.
What sort of service cuts? If we mean the V to Metropolitan Ave, the elimination of low-ridership bus routes, etc, then this is fine and preferable to a fare hike. However, if we mean decreasing the already embarrassingly low frequency of subway lines (especially at night) then this is not acceptable. I’d gladly pay $150 monthly for a system with decent frequency.
The question that should be asked is which fare hikes or service cuts would decrease ridership least per dollar saved. How much are these service cuts really going to save anyway?
The service cuts are not going to save anywhere near enough to balance the budget. But with a couple tricks here and there maybe they can fudge a balanced budget for one more year.
Much of the problem is that there are some service changes/cuts which are good in the end – as many others have noted, the M/V consolidation seems to be a pretty good deal, and barring unexpected complications, will probably be carried into the better times. Cutting necessary bus routes will be more harmful in the end, and it seems like the Lower Manhattan BMT stations are dangling from a shoestring when it comes to overnight closures. Although the “service optimization” euphimism that LA Metro yses for its service cuts sometimes rings hollow, there are optimizations to be found.
The usual and appropriate way to do this is to balance service cuts, fare increases and (ideally) additional funding from outside agencies so as to minimize disruptions in a realistic fashion. But that’s not easy to do, particularly when your political environment is so toxic that people are still trotting out the old “waste and abuse” refrain. From where I sit, the person who will be able turn down the volume on all of the jingoistic complaints (“Waste and abuse!” “Overpaid lazy workers!” “Corporatist elites!”) will also be the person to return the MTA to surer financial footing; the idea that one could find hundreds of millions in “waste and abuse” is just laughable. We need for there to be an adult in the room who can realize that nobody’s having fun here and that it’s time to bring the disparate stakeholders together in a serious conversation rather than a sequential issuance of press releases. (I am convinced that much of the problem is in Albany, as I suspect that for every independent funding source that the MTA finds, Albany will be ready to cut a corresponding amount from the MTA budget.)
Fire all the MTA workers, rehire at lower salaries. $30/hr plus bennies is insane. We should do that with the FD and PD too.
Jingoistic complaints exhibit #1.
What makes you think the trains would run if you fire all the workers? 28,000+workers are just going to roll over to preserve a $2 fare. There’d be rivers of blood in the streets.
Yes that’s a great idea fire all of the workers and have NO transit system. It takes skilled workers to move NY’s safely everyday.
NYC cops are already fleeing to Westchester and Long Island, where officer salaries are much higher. Even Rochester is recruiting cops away from NYPD; it pays about the same, but the cost of living is lower.
But sure, let’s scare away all the cops. Next: let’s halve the salaries of teachers, EMTs, and nurses and cut their benefits. Only CEOs and people in finance deserve high wages.
The reason “the old waste and abuse refrain” keeps getting trotted out is because government agencies such as the MTA continually prove to be a rich source of said waste and abuse (and fraud). We can keep playing these “Albany vs. the MTA” games all we want, but in the end the MTA is a government agency that’s as susceptible to these problems as any other.
I think we should consider raising fares ahead of service cuts through two different schemes.
One scheme would be to introduce different fares for peak hours of travel. This system would charge slightly more for the privilege to travel during peak hours. I’ll leave it up to the pundits to decide what “peak hours” are and how much more to charge. The London system already has this scheme and when I lived there I admit I would make a conscious decision to wait a few extra minutes or leave earlier if I thought the fare difference was worth the time. The advantage of this scheme is that it allows the rider a choice in whether to accept the fare increase or not.
The second scheme is a pure outright fare increase to whatever level the pundits think is appropriate but it provides a kickback for local people who are already paying taxes and fees to the MTA either through their payroll tax, cell phone bill, etc. This scheme would allow a lower fare for people who can prove they live in the greater NYC area. An effective way to prove this is the billing address attached to the credit/debit card used to pay for the metro card. The momentum behind this scheme is to fairly align ridership with who pays for it. At present a local resident and a tourist from Iowa who pay for a single ride ticket, do not in the end pay the same rate because the local resident has already paid additional in the form of taxes taken from their paycheck or other to help subsidize the MTA.
I understand and appreciate this proposal has its limitations particularly with local people who like to pay for their metro cards with cash. But I feel it is another alternative lawmakers should debate ahead of a blanket fare increase or blanket service cuts. And yes
I’ve always supported peak/off-peak fares. It’s done on the commuter railroads and, with E-ZPass, on the Port Authority bridges and tunnels and on the NJ Turnpike.
I don’t, however, support the flat-rate all around concept. I’d rather see steeper base fares and more substantial frequent-rider discounts.
Your second idea is an interesting concept, but I’m not so sure how to pull it off. Would you discount the payroll-tax counties?
I don’t have a problem with peak/off-peak fares.
I find kickbacks for local residents morally repulsive (I feel the same way about the Staten Island discount on the Verrazano). We subsidize transit to promote travel and to discourage driving; I think those incentives apply equally to non-residents. And logistically, your proposed arrangement wouldn’t work: plenty of NYC residents – generally speaking, the ones who most need a discount – don’t have credit or debit cards. A credit card billing address needn’t be a home address (a few years ago, I was forced to move several times in rapid succession, so I changed my credit card billing addresses to my work address, and neither the banks nor my employer cared). And why can’t I offer to pay for my nonresident friends’ MetroCards with my credit card?
Aside from the Fun Pass, which is quite expensive, unlimited cards are fairly useless to most visitors. Tourists generally pay the full, undiscounted, $2.25 base fare.
I voted for service cuts just because I think the cuts proposed should be enacted anyway. Most of the buses that are slated for realignment or elimination were much too inefficient. I also really like the idea of replacing the M with the V train, which will give Williamsburg, Bushwick, Ridgewood and Middle Village a one seat ride to Midtown.
I do like the idea though of a fare hike that would create peak and off-peak pricing. It would encourage more use during nights and weekends. I, however, would only support this if it is also coupled with a congestion pricing plan for traffic.
I like in the MTA’s pdf explanation of the service cuts how you can see the operating cost per passenger. It would be nice to see the same thing for each subway line, especially the ones they are planning to eliminate and/or change.
The problem is that you can only estimate since there are things to consider, like in-system transfers, turnstile jumpers, and distribution of ridership to certain lines at a particular station (For example, Times Square serves many lines and there is nobody saying who is going to which line. On a bus, the rider swipes, or the driver presses a button to count the rider if they don’t pay, but in the subway, it is much less simple.
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I didn’t get around to answering this yet, but I would rather see modest service reductions than fare hikes. The reason being that bus riders on heavily used bus lines are subsidizing bus lines with very few people. Routes like the S60 at $6.83 per passenger should’ve never existed in their current form. I think that service reductions give the MTA a chance to find which services are unnecessary and eliminate them so they reap savings in future years.
I guess the answer to this question depends on whether or not you are affected. One poster said that he would pay extra if it meant saving his bus line. However, riders on high-ridership lines like the M15, B46 and Bx12 would probably rather see service reductions as they don’t use those low-ridership lines.