It’s starting to seem like a regular occurrence around here, but the MTA has again announced record monthly and daily ridership, this time for September. The numbers are staggering, and as they filtered throughout the transit community yesterday, various groups issued calls for funding and better representation of an important constituency.
According to New York City Transit, on Tuesday, September 23, the MTA recorded 6,106,694 paying customers. This was the fifth day in September alone that over 6 million riders swiped into the subway system, and it marked the first time since the late 1940s — when the elevateds still loomed over the streets of Manhattan — that ridership hit such a high level. Overall, 149 million passengers rode the rails in September, another figure higher than any time since the late 1940s.
MTA leaders were quick to point out the significance of the figure. Back in 1985, when the MTA started tracking daily numbers, the high peaked at 3.7 million. Now, it’s nearly two-thirds higher. “New Yorkers and visitors alike continue to vote with their feet, recognizing that riding the subway is the most efficient way to get around town,” MTA Chairman and CEO Thomas F. Prendergast said. “This is a phenomenal achievement for a system that carried 3.6 million daily customers just 20 years ago. As ridership increases, the MTA Capital Program is vital to fund new subway cars, higher-capacity signal systems and improved stations to meet our customers’ growing needs and rising expectations.”
Prendergast wasn’t the only one noted the ties between increased ridership and the need for investment in the system. Yonah Freemark noted a connection on Twitter as a few of us were discussing the numbers:
The obvious conclusion from massive NYC Subway ridership: Expansion is necessary
— Yonah Freemark (@yfreemark) October 22, 2014
The city’s advocacy groups too picked up the thread. “With more New Yorkers using public transit, we need to guarantee that our system can continue to thrive with the city it serves. These record numbers should be setting off alarm bells for our elected officials in Albany, who will need to find $15 billion in the next few months to fund the MTA’s basic infrastructure and construction needs,” John Raskin of the Riders Alliance (of which I’m a board member) said. “If we don’t continue to invest in our system and build for the future, these strong numbers could represent a peak instead of a trend. It’s vital that our elected officials find the funding needed to support the entire $32 billion capital plan, which represents the least we can do to maintain our system so it can last for years into the future.”
Gene Russianoff and the Straphangers echoed those sentiments. “The rain of riders,” Gene said, “is both an opportunity and a challenge for New York — an opportunity for economic growth that no other American city can even aspire to [and] a challenge to win the necessary capital funds – $32 billion over the next five years – that will allow the subways and buses to handle the millions flocking to the system every day.”
The needs are obvious. The popularity is obvious. The support isn’t there. Somehow, someway, this disconnect between politicians and their constituents who rely heavily on transit needs to be resolved. New York’s future, now more than ever, depends on it.
41 comments
A 32 Billion dollar five year capital program is really unfathomable. That’s $3 for every ride in that entire 5 year timeframe. If every day had ridership close to Tuesday.
That’s the wrong way to look at it though. A capital program is about having the plant in place to run the system, so that capital money will be facilitating rides decades down the road.
Correct. Whatever infrastructure is built will have a life of more like 60 years, not 5 years. So it is like an addition of 25 cents to the fare, not $3. Those are rough numbers, but you can see that this isn’t breaking the bank.
According to the logic in yesterday’s (DiNapoli) story, the (interest on) the $32 billion would be covered by a (permanent) fare increase of 32%. That’s more like a 75 cent increase and it doesn’t cover the principal.
OTOH, I can see how he got the $3 and how you converted it into 25 cents and they also seem reasonable (except you’all aren’t accounting for the interest and yesterday was only about the interest).
They also said yesterday that each $1 billion resulted in $70 million per year in debt service (which I took to be interest of 7%) – which is $2.24 billion per year for $32 billion. 25 cents doesn’t cover that; it only works out to about $550 million per year. You’d need the borrowing rate to be much lower, say 1.5-2% to be able to cover the interest with 25 cents a ride.
Interest is such a b****, isn’t it?
Interest is bad. Much better to print your own money, but only the federal government can reliably do that. (I’ve argued that California has the size and clout to print its own money, having half the population of France and a bigger economy than Russia or Italy. NY does not have the same level of clout.)
Usually, the cost of a product or service includes the cost of capital expenses as well as operating expenses. In the case of the NYCT (and most transportation enterprises in the US) it doesn’t, instead relying on public funding of capital expenses. Historically, public policy has determined this practice and, regardless of its logic, it is a political and economic reality. Will it ever change? Sadly, probably not in my lifetime.
Don’t know why that’s a sad conclusion. There are good reasons to think that we get a better outcome with public subsidy of transit.
1. Normally price equals marginal cost. By which I mean, the extra cost to the system of adding a rider (except during rush hour) is negligible, so it doesn’t make sense to charge the average cost per rider. Let’s say it costs an extra 10 cents of electricity to add another rider, and yet the fare is $2.50. Does it really make sense to turn away a rider who would be willing to pay $2? (This is one reason why unlimited-use cards make a lot of sense – they more closely align marginal costs and benefits.)
Of course you still have to cover your fixed costs, but that brings me to:
2. The transit system provides huge benefits to people who may never set foot in the subway. What would property in midtown be worth if there were no subways and no Metro North? Tremendously less than it is worth today. And actually the same goes for property in Westchester and even Connecticut.
3. The transit system avoids huge costs to people who may never set foot in the subway. Cars are dangerous (to their occupants but also to others) and their emissions affect everyone who breathes air in New York City.
For these reasons it would make no economic sense to try to charge riders the average cost of a subway ride. That would induce too little subway riding, too much driving, and it would confer a windfall on people who benefit from the transit system but who wouldn’t be asked to contribute.
A couple of mistakes in that calculation. The $32 billion is for the entire MTA, including commuter rail and buses, not just the subway.
And some of that money is going for system enhancements/expansions to serve riders not already included in the current count, not just maintenance of the existing system.
Moreover, consider the competition. Buying cars and maintaining roads accounts for almost the entire cost of automobile transportation. Transportation is capital intensive.
Still, it’s a lot of money. The MTA needs to shave off $5 billion without cutting scope. To do so, it may have to postpone some projects until the construction industry meets its price.
Election Day is coming up. For the state legislature, in how many locations will there actually be elections?
Cross the unions, and you might get someone on the ballot against you. Cross the rich, and you might get negative ads against you.
Screw everyone else? It doesn’t matter!
Correction: I meant to say the”price” of a product or service.
Congestion pricing. Or whatever we’re call it now.
That’s 6 million riders a day on a system that actually has fewer track miles than it did back in the 1940s (when the elevated tracks in Manhattan were still around). That means that more people are cramming into the system’s remaining stations and lines – higher density usage.
The capital plan going forward is a combination of state of good repair and expansion into new areas. It’s absolutely critical to do, and it’s best viewed as akin to a homeowner who isn’t going to move from a great location and who realizes that they need to work on their 100 year old home. It needs a new roof, new bathroom, and an expansion to accommodate a kid on the way.
They’ll take out a loan to cover some of the costs, but they will also want to pay for parts of it straight up to avoid long term borrowing costs. At the end of the day, they’ll get a much better home, one that adds value to the community, and has a greater resale value.
Work on expanding the subway means bringing the system up to a state of good repair, improving signal systems to allow more trains to run on existing tracks (maximizing the number of people that can take any one line), along with projects that expand capacity with new tracks laid.
If you’re the homeowner, you need to find good contractors that will do the work in a cost effective manner – quality and durable work, will complete work on time and budget, and will stand behind their work. If you’re the MTA, you need the same out of your contractors – and the Capital Construction group needs to figure out a way to get more out of its contractors, which appear limited to a handful (Dragados, ACS, Skansa, Turner). That oligopoly doesn’t benefit anyone except enrich those companies, even though some of those companies do the same level of work for a whole lot cheaper in other places around the world (which is part of the problem – they see NYC as a profit center to make up for lower profits elsewhere).
At that rate, it basically means each mile of revenue track draws about 9300 daily riders. That actually doesn’t seem very dense to me.
Ridership is not evenly distributed, though. The Lex is super-busy, the Rockaway Branch is practically empty.
I would not support additional subway lines like the Rockaway Branch. The Broad Channel bridge should not even have been rebuilt after Sandy — waste of money, it’ll just wash out again like it has *several times before*.
The Second Avenue Subway, paralleling the Lex? That’s worth it.
LIRR had a Far Rockaway fetish. There’s a third ROW to Far Rockaway that was abandoned more than once.
http://en.wikipedia.org/wiki/Cedarhurst_Cut-off
Foamers just love to froth about ROW that made little sense when automobiles were a rich man’s plaything and even less sense today.
“Some of those companies do the same level of work for a whole lot cheaper in other places around the world (which is part of the problem – they see NYC as a profit center to make up for lower profits elsewhere).”
Bingo. The MTA is a cash cow for the heavy construction industry — and its multi-employer pension funds.
It’s a cash cow for the unions too, with arcane rules on the numbers of workers that are required to stand around leaning on their shovels.
Most of the elevateds were actually already gone by the late 1940s (6th Av in 1938, 9th Av in 1940, 2nd Av in 1942; only 3rd Av lasted to 1955). See here for a timeline of how the system has evolved.
I think there are actually slightly more rapid transit track miles in the city than in 1945 (of dubious significance since the main positive contributors are the Rockaway Line and AirTrain, though more usefully Chrystie St and the Sixth Ave express tracks were also built since then). Also the elevateds carried fewer people per route-mile than the subways, and this imbalance was increasing even before the IND lines undermined them in the 30s; by the time they closed I don’t think the impact on ridership was all that large.
That history points out how important it is to build the 2nd Avenue Subway, to replace the missing 2nd and 3rd Avenue elevateds.
…and you’re probably going to need to build a 10th or 11th avenue line to replace the missing 9th Avenue El sometime, too.
They replaced the 9th Ave El with the 8th Avenue subway. IND trains are wider and much longer than El trains.
Back in 1985, when the MTA started tracking daily numbers
I’m confused about the different ways we’re counting here. Don’t we have station-by-station ridership numbers going back to 1905? Are they just not available on a daily basis? One of the visualizations of station-by-station ridership from 1905 to 2006: http://diametunim.com/shashi/nyc_subways/
it marked the first time since the late 1940s — when the elevateds still loomed over the streets of Manhattan — that ridership hit such a high level
It sounds like you’re saying that ridership was higher back then only ’cause there were more stations/services. But most of the stations that everybody complains about today look like they were more frequented in 1946 than in the modern era according to that visualization. Of course people were less obese/smaller in general, they probably weren’t wearing giant backpacks, ridership was possibly more disbursed throughout the day, there were more third shift workers, and Saturday wasn’t a day off for most people, so the “weekday” peak number would be lower… But it still seems like ridership peaked in 1946 even if you’re only including stations that still exist today and control for the adoption of the 2-day weekend. It reached a lowpoint in 1976 and slowly marched back until 1997 when it started to shoot up greatly.
It is not going to happen.
I’m a big fan of capital projects and system expansion, but does no one see the irony in, effectively: “We have so many more paying customers that we need a huge new subsidy?”
It’s the old joke, “Sure we lose money with every sale, but we make it up in volume!”
The MTA has among the highest farebox recovery ratios in the US, right? So if we’re criticizing them for not being over 100%, where’s our disgust at the little transit systems running at below 20% sprinkled all over the country?
No, because the situation is more like: “We have to pay for the things we should have been payed for in 1940/1960/1980/2000.”
Yes, they do because we are all subsidizing the people who drive all the time. In spite of the gas taxes (federal and state) all forms of government taxes are used to subsidize driving. Depending on the size of the subsidy it is difficult or impossible for anything that builds its own right of way to compete with subsidized roads. That applies to both rail and private roads. It is impossible to cover the fixed capital costs while there is a few layers of government willing to subsidize public roads to the point where the capital cost of the right of way is practically free.
Transportation would be very different if every road was to be paid for by its users only. Just think about it — if people had to pay for not only for the highways they use, but also for all secondary roads down to the street in front of their house they would practically never drive due to the cost to use the roads which is basically mostly the cost of capital construction (yes, there are some variable costs such as snowplowing, but these are tiny compared to the construction cost). Only in such world it would be fair to not subsidize rail transportation such as subways.
Let’d do a little thought experiment and take this further. My real estate taxes pay for the paving of the street in front of my house, but that street is not a cul-de-sac, it is a through street used by many people who live outside my town. These people and their vehicles cause wear and tear on the pavement of my street, so my town needs to tax me to repair it. In the process though, my taxes subsidize the driving of all out of towners using my street. So they end up driving more than they would otherwise do if they had to pay even a token amount for using the street I live on. Even if the amount was one cent per passing on the street, just think on how many streets you drive to get from point A to point B and you realize that that adds up to real money really quickly. So my taxes by way of paying for paving of my street encourage out of towners to drive much more than they otherwise would. The same goes the other way, I drive too much because someone else’s taxes paid for the paving of the streets in the other towns. Similar arguments can be made for roads financed by state or federal taxes — they all induce much more driving than a system in which one pays for each and every road mile they use for driving.
In economics this is a collective action problem where the marginal cost of driving that I as a driver see is only the car and the gas, but not the capital cost to build and maintain the roads that I drive on. The same is true for every driver in the country. This is not true for private roads and private railroads — their infrastructure costs are not paid by other road or railroad operators, so they need to charge for the cost of the infrastructure they build. That is true for the MTA too, they either need to charge for the infrastructure or get a subsidy from the government (state or federal). I as a driver also get a subsidy from all other drivers, but it is kind of invisible subsidy — most people do not realize it is there and therefore cannot react and complain about it the same way they do about subsidizing public transportation and rail in particular.
There are many other aspects of the issue of the subsidy that I cannot get into, but here is one example: politicians (think Cuomo) have incentive to keep the fares artificially lower than where they should be as a way to get people to vote for them — a private corporation has no such incentive. If the private corporation does not recover its costs, it goes out of business, its managers are out of a job, and its owners out of a lot of money. In the case of a public corporation such as the MTA there are practically no negative consequences on the politician who kept the fares too low and the marginal cost to its owner (think every taxpayer in NY) is tiny.
So yes, we need to subsidize the capital investment of the MTA because we are already subsidizing every single road (including the street I live on) and the drivers on it.
More riders does not mean more revenue.
Most of the ridership gains are on nights and weekends as people use the subway for more than commuting to work, or school. Thus while ridership is skyrocketing, fare revenue is not increasing as fast as ridership. In 2012 the IBO calculated that the average fare for passengers using weekly and monthly unlimited passes was $1.80 per linked trips, or about 80% of the full fare price with 7-day passes seeing an average of 20.4 swipes, and the monthly passing being used an average of 68.6 swipes. Yet theses are just averages, and these number include people who both underutilized the unlimited passes, as well as those who over utilize them, and as people use their weekly and monthly cards more often the average fare paid decreases.
It is time the MTA implemented a fare-floor for the weekly and monthly passes. Weekly passes would have 27 free trips for the week with additional swipes during the week costing $1.10. Monthly passes would have 112 trips included for each month, with additional rides during the month costing $1.00. By implementing this plan, most users of the weekly and monthly passes would still be getting a great deal as they can still pay as little as 40% of the full fare price per ride, but individuals who are abusing the system and overusing the system causing rider congestion would have to start paying marginally more in fares once they hit their limits which would provide a slight disincentive to overuse the Metrocards since each ride would cost a minimum of $1.
Additionally this model would reduce fare fraud as it reduces the financial gain of selling Metrocard swipes as every swipe sold would have a minimum cost to the person selling swipes of $1+.
Link to IBO report cited: http://www.ibo.nyc.ny.us/ibore.....letter.pdf
Personally, I’d prefer implementing a fare ceiling as in London, where you know that no matter what, you won’t pay more than $X a day for your subway rides. I’d also prefer to bring back the daily pass at a more reareasonable price point, say, $11. I’d also prefer to punish fraud by actually investigating where and when it occurs and sending in the plainclothes to bust metrocard swipe resale.
But, yeah, sure. People actually using the system is the real problem, and it’s long past time that we started punishing people who ride the trains. How dare they want to take advantage of the greatest subway network in the country? We need less riders and less rides taken, not more!
Remember, it costs absolutely nothing for the subway if more people are riding on the half-empty trains at midnight.
The costs only come when more people ride on the *crowded* trains (requiring more trains to be run).
So you want to set up your fares to encourage people to use the off-peak trains.
We need a Second System for the 21st Century. We need massive investment in new lines. We need to get construction costs under control so we can get massive investment in new lines.
That said: we will never see massive expansion of the subway. Those days are over. Get used to worsening commuting conditions.
Me, I’m getting out while the getting is good.
Having a bureaucracy whose job it is to build a few miles a year is probably doable. It probably should not involve the MTA.
Notwithstanding the privatization fad, it ought to cost less to do things in-house than to contract them out. With out-sourcing, there are extra layers of bureaucracy needed (e.g. processing and supervising the contracts and performance) and profit is added to the tab. On a big job, contractors will bid based on starting out with a whole set of new equipment, only some of which will get completely used up. Otherwise, the workers are conceivably the very same people working either for the government or for the contractor – doing the very same work in any case.
Anti-government mantra has it that government workers are overpaid, lazy and incompetent, …, but apparently we say that about union workers and contractors too, so what’s the difference?
Government benefits are often said to be excessively generous, but don’t we say the same thing about unions too — and does anyone think that the management of contracting firms are retiring on just their Social Security and going to free clinics for their health care?
Clearly, the three branches of the MTA each know how to lay track and rebuild ROWs’, etc. These skills could readily be used adding additional trackage to the commuter RRs, rebuilding the Rockaway branch and so forth. Other skills, such as tunneling, would need to be largely started from scratch, but to some extent, that is what is happening anyway, with each new project. Railroads have also traditionally done much of their own work in house, even building locomotives and rolling stock, a decent idea as well, but one I am not going to get into here.
If at least some of the construction work is kept in-house, there would be more retention of expertise. A continuous construction detail would also merit its own section of the budget and would not need to be repeatedly fought over. A project such as SAS would just keep chugging away block by block, year by year, and every once in a while new stations would open – new photos, new ribbons and all that food for the pols as well.
I’d rather just have the city do it, actually. AFAIC, operating the MTA’s network(s) is a perfectly reasonable corporate process, but investing in and expanding the system is more or less something that should be done for the benefit of the public and the public should be holding the people who handle it accountable, at least indirectly.
PPPs are worse than a fad. When the public pays for it anyway, it works like: if we succeed we win win, if we fail you lose. You can work reward for success and punishment for failure into existing contracts.
The political dynamics in NY are a mess. The MTA was formed because suburbanites were freeloading on city infrastructure, and the city needed their tax revenue to keep the city infrastructure operating given the freeloading. Unfortunately, the state has refused to actually keep the system funded; this is largely because the suburbanites still want to freeload, as far as I can tell (upstate doesn’t seem to figure into the politics at all).
No.
I’m not going to get used to worsening commute conditions, and I’m not accepting that “those days are over.”
Instead of giving up, I’m going to keep fighting for massive new investment into New York City, and into all of America’s other cities. Anything else would be stupid.
Good luck to you. Sincerely. Me, I can’t wait to leave this dysfunctional mess of a city.
The expectations our so low that the fight is for basic repair money. The fight should be for expanded transit capacity as in new transit modules (subway, rail, real BRT, light rail, etc) that have dedicated ROWs.
Why don’t we a maket base fare to pay for future capital program? MTA needs to tell the people how it’s needs to be run and why funds it needs to run daddy to day. The State should just lease it’s system and make it mandotory that infrastructure should be in good repair
The subway could conceivably cover its operating and capital costs with fares, if were released from the debts, pension obligations and labour contracts that were incurred by politicians using it as a vehicle of patronage in the past. LIRR and MNRR, however, have to compete with extremely subsidised private car travel, and are also subject to antiquated FRA regulations that greatly inhibit efficient operation, so they’re not in a position to charge a fare that actually covers their costs. The MTA (and this capital plan) has to fund those too (as well as inherently unprofitable social services like access-a-ride).
On top of this, LIRR has what are quite possibly the worst unions in the country, and a very bad attitude from the management as well. And the residents of Nassau and Suffolk keep electing governments which refuse to actually fund the service themselves, while still demanding service.
Metro-North might be made to require less subsidy with incremental improvements, such as changes in FRA regulation and so on. I don’t see how to do this for LIRR without a major cultural change.
(LIRR is the railroad which said it couldn’t reduce the gap between the platforms and the tracks without spending billions… until someone outside LIRR pointed out that they could *shift the tracks* a few inches.)