On its own, a fare hike doesn’t portend a looming transit death spiral. In fact, regular and predictable fare hikes for, say, a subway ride designed to ensure that revenues remain fairly consistent with inflation and other costs over the long term can be a sign of a robust and well-managed transit system working to compete with other modes of transit. But when a fare hike is coupled by service cuts amidst a prolonged period with an overall decline in ridership and revenue, the transit death spiral canary starts chirping a bit louder in that coal mine. Last week, the canary showed up at the MTA Board’s budget meeting as the board books showed a continued decline in ridership, the budget forecast called for service cuts, and the MTA started debating the structure of next year’s fare hike. It certainly seems like New York City’s transit system sits on the edge of a death spiral.
The transit death spiral is a particularly prickly beast to pin down. A few months ago, Aaron Gordon wrote about it in his newsletter, and I’d like to reframe Aaron’s model slightly. The death spiral encapsulates a budget cycle in which a transit agency recognizes a revenue shortfall due to lower-than-project ridership, raises fares and cuts service to compensate, and thus further dampens ridership, leading to additional shortfalls. As the cycle repeats, the spiral becomes inescapable until a massive bailout or death. When the topic arose over the summer, Cap’n Transit wrote a rebuttal to Gordon’s piece, and in the intervening few months, the spiral seems to have worsened.
The current cycle will come to a head soon when the MTA Board reconvenes to approve a 2019 fare hike. On its own, the 2019 fare hike isn’t a surprise as the MTA instituted biennial fare hikes beginning in 2011, but with service reliability on the decline, riders seem particularly up in arms over next year’s planned hike. You can see the proposals in the chart atop this page, and I’m agnostic as to which one the MTA should choose. With the introduction of subsidized Metrocards for low-income New Yorkers on the horizon, eliminating the pay-per-ride discount and keeping the increase on unlimited passes at a minimum is probably my preferred outcome, but that choice is akin to just shuffling deck chairs. In a handful of months, we’ll be paying more.
You can view the fare and toll hike proposals in this pdf, but the details of the hike aren’t the big story. Rather, the big story is the MTA’s worsening financial picture. That story unfolds in this pdf, and it’s a dire one. In the span of two years, since the July 2017 financial plan, the MTA’s long-term outlook has worsened by over $800 million. According to MTA documents, the biggest drivers are declining ridership ($485 million), paratransit costs ($321 million), workers compensation payments ($125 million) and overtime ($100 million). The MTA has relied on a series of one-shot budget moves to stave off deficits, but these one-shots are drying up. As Robert Foran, MTA CFO said last week, absent healthcare and pension reform, the MTA is out of cost-savings measures, and no politicians have desired to leap into that fraught battle. (In fact, Gov. Cuomo did just the opposite when the MTA labor contracts were up recently.)
So the options are fare hikes and service cuts, the two best ways the MTA has of controlling revenues and expenses. With fare hikes scheduled for 2019, service cuts loom for 2020 – the first cuts since the crippling scalebacks in 2010. The MTA, of course, hasn’t said exactly what the service cuts will be, but it sounds as though the agency could change “service guidelines” to allow for more crowded trains and less frequent service. The total cuts to the subway will equal around $10 million – which is modest and projects to a few fewer trains per hour during certain times of the day on some, but not all, lines – and $31 million for buses which will devastate the bus network. Perhaps then the buses, with extremely steep ridership declines, are closer to that death spiral than the subways.
Still, service cuts are a last-gasp approach. As Foran detailed at last week’s meeting, the MTA prefers to seek out a separate revenue streams to avoid service cuts while closing its budget deficit, and I think back again to the piece I wrote on the fight for congestion pricing revenue. The money may have to go to shoring up the MTA operations budget before it can go to the capital plan (or Andy Byford’s Fast Forward fund) as everyone is laying claim to a magical cure-all that won’t be.
If that doesn’t further complicate the picture, Aaron Gordon in his newsletter last week noted yet another issue the MTA budget projections: Their out-year projections do not account for planned or potential work that could further stifle ridership and revenues. I quote from last week’s edition:
The L shutdown, for example, begins next year. The MTA predicts the vast majority of trips will still take place within its ecosystem, but it’s easy to imagine ridership falling due to discretionary trips not being taken or a higher-than-projected rate of folks opting for rideshare or bicycling instead. Indeed, the MTA now predicts a 1.1 percent decrease in ridership in 2019, following a 2.8 percent decline this year. This is a major revision from the July plan, where they predicted ridership *increases* in 2019 and 2020 despite acknowledging the L shutdown. Their logic: the economy is good.
These explanations are more confusing than insightful. Pegging ridership trends to future employment projections may be accepted practice but it’s been demonstrably unreliable in recent years due to fundamental changes in how we work, shop, and travel…But there’s an even bigger red flag in their ridership projections. If the MTA does get funding to move ahead with the Byford Plan, entire trunk lines in Manhattan as well as major branches in Queens and Brooklyn will be shut down on nights/weekends for months if not years on end. In other words, the most extreme planned work shutdowns in the city’s history will occur in the next decade if Andy Byford gets his money. Ridership will almost certainly suffer.
That’s not an argument against doing the work, but merely a consideration therein, especially when projecting budgets. But, as of now, the MTA is predicting flat ridership for 2020-2022. Of course, the MTA cannot budget for a plan that has yet to be funded, but they don’t even flag this as a potential risk. This is emblematic of the agency’s tendency to get caught flat-footed by predictable ridership trends.
In other words, the plan to repair the system will, by necessity, lead to temporarily lower ridership, and the MTA isn’t accounting for it now. Their budgets for outyears aren’t conservative enough, and we’ll have to go through this process sooner than the MTA currently anticipates. You see where this is going? That’s also part of that death spiral.
Meanwhile, the MTA itself is struggling to figure out why service is declining. This came up first over the summer during the presentation of the July financial plan when the MTA failed to distinguish between the cause and the effect of the ridership decline. Ridership is declining because off-peak and weekend service isn’t reliable, and with easy and cheap alternatives such as for-hire vehicle apps, those who take discretionary subway trips are opting for more reliable means of travel. Last week, the MTA bigwigs tried to blame fare evasion as the leading cause of ridership declines without offering any evidence whatsoever, and it seems like the gatekeepers don’t know what ails the transit network. Between the lack of foresight in budget planing and the lack of understanding of the ridership decline, it’s hard to say if the current MTA Board and management can work its way out of this mess before the spiral leads to death or at least temporary paralysis cured only by a steep infusion of cash.
I am ultimately not particularly optimistic as we sit here a few days after Joe Lhota’s departure and a few months before fare hikes and the L train shutdown start to tax the system. It’s not clear what the future holds for Fast Forward, and it’s not clear where these downward trends lead. Enough people are watching that I hope we can escape the spiral before it gets worse, but like I said, that canary just won’t stop chirping.
I reject the premise of the choice between the two options. It’s a narrow choice that doesn’t really address questions of reducing transaction costs or implementing best practices from cities that don’t speak English. Even under the slightly less bad option 2, the monthly-to-pay-per-ride cost ratio is 46.25. For reference, in Berlin it’s 36. The monthly fare should be frozen and fare hikes concentrated in the single-ride and pay-per-ride sectors until the breakeven point on a monthly falls to a more reasonable level.
Interesting. I have just calculated that ratio in Stockholm based on the different pay-per-ride prices that exist. The ratio is either 27.7, 19.5, or 13.9, depending on which pay-per-ride option you pick.
A 30-day pass costs SEK 860.
If you keep money on your card and pay for each ride, the price per ride is SEK 31.
If you buy a single-ride ticket from a machine, from a seller (like a store that sells them), or in the app, the price is SEK 44.
If you buy a single-ride ticket from a conductor, the price is SEK 62.
They really, really, really don’t want people to buy from conductors.
When I lived there, a pay-per-ride fare was 25 kronor (in the inner zone, consisting of the city and inner suburbs on the metro), and then 860 would get you a county-wide monthly. Outermost zone was 50 kronor for a single ride, subsidizing suburbanites who commute into the city regularly but not people who take occasional trips.
The zone system has been abolished. Fares are flat over the entire county (as the time-based passes always were), although a single-ride fare is only valid for 75 minutes and many journeys within the county cannot be completed in 75 minutes. (When I lived here years ago and was trained as a conductor on Lidingöbanan, a single-ride fare was valid for two hours.)
If you calculate the ratio on the basis of the single ride ticket, as opposed to the discounted effective fare, the ratio becomes 38.84. That’s fairly close to Berlin.
If you calculate the same ratio for Berlin, its ratio shrinks to 32. The point is to incentivize people fiddling with TVMs once a month and not every time their $20 MetroCard runs out.
Hey, MTA prisoners (ie, the riding public), guess what? Since you are already abandoning the system, we the MTA will make it even easier to stop trying to use the MTA subway and buses! How about this: We’ll both reduce the mediocre-to-poor service you already ‘enjoy’ and, to top it off, we’ll make it more expensive! Thank you for riding MTA Transit!
It is time to decouple subway pricing and local bus pricing. The buses are less reliable and offer inferior service, why should they cost the same? The buses tend to serve lower income areas, why should they cost the same? It doesn’t cost the bus network a billion or two to add a new stop, why should it cost the same?
The riders clearly agree, as shown by the collapsing bus numbers.
This isnt a new concept. MBTA charges $1.70 for bus, $2.25 for rail. A short trip in downtown DC costs $2 or $2.25 on metro (off peak or peak), while the Circulator is $1 in the same area.
How would this impact the current free transfer between bus and subway on the pay per ride option?
In the MBTA case, if you transfer from bus to rail, you get charged the difference. If you transfer the other way, it is free. In DC, if you transfer from the Circulator to Metrorail, you get a 50 cent discount off the rail fare (the rail fare is distance based). From rail to bus, the transfer is free.
It should be noted that the Circulator is not part of the WMATA system. WMATA (I think) operates the buses, but the Circulator service is the responsibility of the DC DOT, which specifies routes and service levels and contracts out the service. (I know WMATA had the contract at one point; don’t know whether they still do or not.)
But operational costs for the bus are significantly higher than the subway. I doubt you’re going to get people to mode shift from subway to bus to save minimal money, and reducing the bus fare just increases the operational subsidy for the bus network.
On the other hand, you can’t really raise local bus fares, because as mentioned, they serve an often lower income area, in the numerous transit deserts throughout Queens.
I am not saying to necessarily lower bus fares, but if they raise the train fare, the bus should stay at the current price. That being said, if DC can sell Circulator bus rides for $1, and Los Angeles for $1.75, why is NYC looking to charge $3?
I dont think its as much about getting people to switch from the train to the bus (which would only happen on routes where SBS replicates the subway, like 2nd Avenue) but getting people to stay on the bus and not flee to other competing modes.
You’re mentioning two cities with bad practices. Forget literally anything that exists in the US when it comes to transit pricing; you guys are bad at it, as evinced by lines like “if poor people ride it, it should cost less.” No. If poor people ride it you still need to insist on absolute fare integration, so that poor people have free choice between the bus and the train.
Forget Washington. Washington’s mode-dependent fares ensure that WMATA has to run buses from Anacostia to the CBD parallel to the Metrorail because poor people don’t spend extra money on a train ticket. There are best industry practices out there, and they’re not in cities in the US and barely in cities that speak English. In cities that speak German, every train or bus in your fare zone (often the entire city) costs the same except maybe some high-speed trains and even that depends – in Switzerland you can ride high-speed trains from the city to the airport for the same fare as a tram or regional train, you’re just not guaranteed a seat. Transfers are free, too, because the network intends to work together and not as a bunch of separate fiefs for separate market segments.
I think you have it exactly reversed. Why on earth would you compare Anacostia or the Bronx to Geneva or Zurich? A quick Google search suggests that the average median individual income in Zurich is $86,000 a year. In the Bronx, the median income for a household is $35,302.
If you want to look at best practices for these income levels, then you should look south, not east. The fare to ride the Mexico City subway at today’s exchange rate is 25 cents USD.
“No. If poor people ride it you still need to insist on absolute fare integration, so that poor people have free choice between the bus and the train.”
No, at $3 a swipe, the only choice is to find another way to get to work, or to skip a meal.
You fail to explain how charging a different price for a different service is a bad thing. Thats literally how ever private business works.
Not only that, taking the bus between Silver Spring, Medical Center & or Rockville is not only cheaper, you save upwards of 20-minutes each way depending on the route chosen. This is do to the fact that the Red Line is shaped like a V & you more or less need to go south through the district to go north & reenter Montgomery County while the busses don’t need to do so.
“Forget literally anything that exists in the US when it comes to transit pricing”
I thought San Diego set a good example, with its pricing practically requiring everyone to get day passes at a minimum, but honestly it’s the only one I can say good things about.
Also San Diego is a proof of payment system. So you buy a day pass or a weekly pass or a monthly pass, covering either the smaller “urban” area or the larger “regional” area, and you flash your pass if an inspector or transit cop comes by.
The only problem is crooked transit cops, some of which have been prosecuted recently.
We should get rid of all volume discounts: no more weekly or monthly passes, which are a huge drain on revenue. Every ride should cost the same basic fare.
And now that we have reduced fares for the poorest riders, we needn’t fear more substantial fare hikes. My suggestion is that the fare be $5. Let us remember that something is cheap or expensive only in comparison to other things. If a deli sandwich can cost $5, then so can a ride on the subway or bus.
A $5 fare, accompanied by a frank education campaign laying out the need for it, would probably not cause a drastic reduction in ridership amongst a population that would surely grasp the urgency.
Great business plan. You should call up Sears and let them know the best way to save the company is to double prices. As long as the ads are clear that the higher prices are urgently needed, I’m sure the people will understand and increase their shopping there.
Let us remember that something is cheap or expensive only in comparison to other things. If a video game can cost $60, then so can a new pair of socks.
I trust that you understand that the subway and buses are not a retail store; they are an essential public service. Of course this means that they rightfully should be funded almost entirely by taxes, with only a small fare or even no fare. However, due to Americans’ self-destructive ideological aversion to paying an appropriate level of tax, we can’t have that. So we have no choice but to charge a fare that actually brings in significant revenue.
The only argument against that approach had been the adverse effect that such a fare would have on the most vulnerable New Yorkers. But the reduced-fare MetroCard has taken care of that. So we shouldn’t lose this opportunity to correct the fare to a level where it should have been all along.
Finally, comparing the price of a subway ride to another everyday purchase is a valid longstanding practice. An analogy to a comparison involving the price of an expensive video game fails, because a video game is not an item purchased every day, unlike a cup of coffee, a slice of pizza, or a deli sandwich.
Transit is a service, but it follows the same rules of supply and demand. You cannot set prices in a vacuum.
No, fair fares does not solve everything. It is only for folks making less than $12,140 a year. If you make $12,200 a year, congrats, you have to pay $1560 a year for the bus, or 13% of your income.
If you think that people making $12,200 a year are buying a deli sandwich every day, youre sorely mistaken. But youre right, a video game isnt a daily purchase – neither is a pair of socks. I have socks that must be at least 5 years old, so I guess $60 would have been an exceptional value for them.
People would stop riding the MTA, period. No one is going to pay $10 round trip to go to and return from work, on a substandard (at best!) transit system. Frank education plan, you say? How about frankly educating the public why the likes of Amazon gets something on the order of one and one half billion dollars (if not more!) – ultimately from the taxpayers’ pockets, I point out – whereas public transit – as usual – goes begging. This suggestion of yours is outrageous.
You’re sure not going to find me defending the outrageous giveaway to Amazon! But that borderline criminal act has been done; and the problem of arresting the decline of our transit system remains. A tax hike would much better than a fare hike; but, unfortunately, that is impossible in this country.
Even at $10 for a round-trip, the subway would be the most cost-effective way to commute for the vast majority of New Yorkers. No one is going to trade that for sitting in a car in a traffic jam, and paying a lot more than $10 a day in gas, tolls (except for the Queensboro Bridge freeloaders), and parking for the privilege.
A hike that steep will tank ridership, mostly outside of rush hours and for trips that don’t begin/end in Manhattan.
Commuter vans routinely raise their fares to $5 during periods of mass transit difficulties, such as snowstorms. A peak hour fare of $5 can be sustained for most buses and subways. The problem is that such a fare would be used to move revenue AWAY from the MTA through theft of its real estate tax revenue.
You have optimism, but that’s far from enough to make that fare work at any time. Those without significant amounts of money will be forced to find employment within their neighborhoods, students will have to find some other way to get to school, discretionary trips will be made via other modes (assuming they actually happen, which is less commonplace these days, seeing how we have more robust home entertainment than we did even a decade ago), revenues will fall, hikes will be more steep, and the protein that is transit service will only continue to diminish until it becomes so ineffective that it’s effectively abandoned.
Now I’m curious what the largest European transit network without passes is. I doubt it cracks the region’s top 20, but maybe I’m wrong, I only checked the 5 biggest.
For example, here is Prague. The ratio of a monthly to a single ticket is 28. It’s a city the size of Indianapolis with 500-something million annual transit riders, on the order of 3 times as high as Metro New York per capita. Can’t learn from them, they probably don’t know how to run transit, must learn from Washington and emulate its colossal failures.
“It’s a city the size of Indianapolis with 500-something million annual transit riders…”
1,200 million-ish if official estimates are to be believed. Considering the fact that they revised the estimate for the Metro ~130 million downwards few years ago, multiple grains of salt are necessary.
Long ago there used to be a concept in Economics 101 called “peak revenue”. Raising prices until the product of unit price times number of units sold reached its max.
Applied to the MTA, peak revenue would mitigate two problems with one stone: the deficit and overcrowding.
It would also force the Mayor off the sidelines, as he (and not the MTA) would be the one on the hook for fare subsidies for special categories, e. g. low income riders, students and tourists.
I’m glad you have begun to sort of come around from the idea that the whole disaster is a myth, and the problem is the workers riding the subway and using other public services have it too good relative to the TWU and those producing other public services. In the fact of the past trend.
But I don’t think a “a frank education campaign” will work. Not in the fact of decades of “two sets of books,” pension increases that “cost nothing,” and fare and toll cuts that everyone now forgets (including the volume discounts you mention). They’ll just tune it out.
So, are your prepared to embrace my solution? I thought of this is the mid-2000s, with NYCT in mind, and instead the solution has been to keep postponing pain to the extent possible and digging the hole deeper.
This is a booming economy — that may be about to end. And as a result, among other things, pension costs will soar again.
In the face of past trends, and in the face of two decades. One of those things I just never type correctly.
I’m sure Uber would support your suggestion.
I don’t have to get a flat white from café or a sausage egg cheese on a roll (and I really should make my own coffee and breakfast) from a bodega every day but I do need to use the MTA to get around.
Music in NYC subway stations is a terrible idea. Only people who seldom or never ride the subway, such as the MTA transit agency’s officials, could think it’s a good idea. Many riders dislike certain types of music. While a musician or a band may entertain some passengers, he is also bothering others and people shouldn’t have to listen to music that annoys them. Also, the music often disturbs people who want to read or talk to their companions as well as those who just want peace and quiet.
Bands in some stations play extremely loud amplified music that sounds like the noise in a factory and really annoys passengers. If someone wanted to discourage people from riding the subway, he couldn’t do a better job than some subway musicians.
Musicians not only annoy people, they also create two dangerous situations.
1. Many station platforms are dangerously overcrowded during peak hours as well as some non-peak hours. Musicians increase the danger simply by occupying platform space.
2. Even a low sound level hinders hearing loudspeaker station announcements. It’s essential riders hear these announcements, particularly emergency announcements. Subway musicians make it difficult or impossible to hear these announcements.
The MTA actually encourages musicians and this shows the agency is completely out of touch with subway riders. Playing music in subway stations should be prohibited.
I don’t know where you’ve been going to get the idea that these acts are taking up platform space, but at Union Square, the acts are above the BMT Broadway Line (in other words, not on the platforms).
Try Lex Av – 59 St on the BMT platform (though the “MTA sanctioned artists” tend to perform on the uptown IRT Lex platform) or Times Square on the IRT West Side platforms.
A NYC MTA policy designed to help passengers is extremely annoying and helps no one. Passenger standing on subway platforms and riding on subways and buses are usually subject to incessant loudspeaker announcements, literally one every two minutes. Almost all these announcements are insignificant and completely unnecessary; one example is: “Thank you for riding the MTA”.
These announcements disturb people who want to read, listen to music with headphones or talk to their companions, as well as those who just want peace and quiet during their trip. If someone wanted to discourage people from riding public transit, he couldn’t do a better job than the MTA does with its incessant announcements. Only absolutely essential announcements should be made.
The abuse of the PA system tend to be quite rampant especially during East River crossings.
Not sure what I find more irritating – back-to-back recordings of condescending Charlie Pellett and now Velina Mitchell (or) conductors trying to read a lengthy speech on the PA microphone that’s picking up background noise more than the voice.
Also, those crossings are the best times to play those announcements, seeing how there’s a gap of several minutes between stations.
OMG YES. The noise pollution is out of control. When I’m travelling with friends on a weekend, trying to converse on the platform during a 10-15 minute wait, I can barely get in 2-3 words between announcements. At rush hour, the constant blaring of robotic next train announcements combined with platform conductors yelling and blowing whistles at us is enough to drive anyone insane.
MTA Bus is planning major cuts to express bus service. They’re looking to cut 41 positions in express bus service in 2019 and cut 40 positions in express bus service in 2020. They’re planning to make $10 million worth of express bus cuts in 2019 followed by another $11 million worth of express bus cuts in 2020. Here’s the real kicker, since the City of New York fully pays for MTA Bus service, these cuts don’t save the MTA any money and won’t solve the MTA budget issues, these cuts save the City of New York money without any benefit to the MTA. These cuts are planned to happen regardless of the MTA’s financial situation. Please take a look at the 2019-2022 November Financial Plan and pay close attention to where MTA Bus is mentioned.
“MTA Bus is planning major cuts to express bus service. They’re looking to cut 41 positions in express bus service in 2019 and cut 40 positions in express bus service in 2020. They’re planning to make $10 million worth of express bus cuts in 2019 followed by another $11 million worth of express bus cuts in 2020.”
The fare is too high for most of the populations served, so they are breaking the back of their ridership base. All of the BMs carry like trash outside of rush hours and many carry poorly even during rush hours. The QMs also have too much service for their ridership base. 81 positions means that the MTA Bus express network is about to lose 20% of its service…and that would be appropriate.
I imagine that pooled Uber and Lyft would hit express buses hard. A better option for those too good for the subway and willing to pay more.
The express bus system only nominally caters to that group.
The BxM buses get busy and are still popular. Do you have any idea of what express routes may get cut?
In addition to the exorbitantly high fares, there’s also the issue of reliability and travel times.
More recently, I’ve been reading online and hearing from colleagues about very late arriving buses and no-shows often resulting in overcrowded buses. (I’m sure people would be thrilled to pay a premium fare for a standing room only bus!)
Road congestion has worsened to the point where you’re starting to experience major time penalties on taking the express bus to/from Manhattan at certain times of the day. I noticed that travel times have crept upwards after the NYCDOT went overboard with Zero Vision.
The BxM buses get busy and are still popular. Does anyone have any idea of what express routes may get cut?
No coins on buses. Only metrocards
So, looking back, these are what led the MTA to these screwups:
(1) the road lobby made it impossible to get bus lanes. Without bus lanes, buses are simply unreliable, and everyone who can avoid them will avoid them, and that’s exactly what’s happening.
(2) the ossified, backwards, lawless culture of the MTA refused to do the necessary ADA upgrades to the subway stations. This led to the entirety of the paratransit budget. Paratransit was supposed to be largely a temporary thing until cities made their regular bus & subway networks accessible. But if you don’t comply with the ADA requirements at the subway stations, you end up paying for paratransit forever, and it bloats out.
(3) the ossified, backwards, lawless culture at City Hall meant that even the taxis (and fake taxis like Uber and Lyft) weren’t wheelchair-accessible, driving even more people to paratransit.
(4) Again, the ossified, backwards culture at the MTA meant that the unions fought against obvious technological improvements which should have been done a decade ago; there is no reason not to have modern signalling systems, and no reason to have conductors hiding in a booth on subway trains. London got rid of lots of unnecessary make-work jobs *without laying off anyone*, by putting them in customer-facing positions. But the worthless NYC transit union was unwilling to consider such win-win options.
Fare evasion is a major cause of the problem, I am talking of experience, in the Bronx, on some bus lines, seventy percent of the people, doesn’t pay their fare and they are the ones getting the seat in the buses, cause they goes through the back doors, just imagine one whole family of four going through the system like that for the whole day, not paying. I guess this all goes down to politic, the mayor doesn’t want to upset one of his home base. It is bad in the bronx.