Mass Transit

UPDATED: Here's Why $19 Billion $43 BILLION Won't Fix New York's Subway—or Your Local Transit System

Until riders pay most of the cost of public transit and operators are directly answerable to their customers, nothing will get better.


New York Post cover

Updated, May 24, 7:45 A.M.: Late yesterday, The Wall Street Journal reported on the MTA's plan to fix the New York City subway system and provided a fuller accounting of costs that had been deleted from the version discussed below. It turns out that the MTA estimates a total cost of $43 billion to upgrade the subway and bus system over 15 years. The agency says it will also require an additional $50 billion in capital improvements. "The plan publicly presented by [MTA chief Andy] Byford on Wednesday didn't include [full] cost estimates," notes the Journal. Spokespeople for Gov. Andrew Cuomo and the MTA are claiming the other is responsible for deleting the full cost estimates.

When New York City's subway opened in 1904, a ride cost a nickel. Today the system is breaking down in virtually every possible way and boasts the worst on-time performance of any major transit system in the world.

Last summer, the system was declared "in crisis" and got an $800 million infusion in emergency cash and repairs. A year later, the head of the MTA, which operates the system, is now pushing a plan to fix the subway that carries a jaw-dropping price tag of $19 billion—about the same amount as nearby Connecticut's total state budget. The fixes will take decades, promises MTA head Andy Byford, but the first few years will focus on the signal system, which breaks down all the time, causing backups, jams, and delays. The New York Times reports:

There have been serious delays in installing a new signal system, which is known as communications-based train control, or C.B.T.C.

Of New York's 22 subway lines, only the L train has the advanced signal system. An effort to install the technology on the No. 7 line is years overdue.

Mr. Byford has said he hoped the No. 7 line signal upgrades would finally be completed this year.

That promise—and a nickel—gets you nothing but delays on today's subway. The L train is a major line that goes between Manhattan and Brooklyn and the East River tunnel it uses was damaged by "Superstorm Sandy" in 2012. As a result, the tunnel will be be shut down for at least 15 months starting next year, massively disrupting service for hundreds of thousands of people and leading to fears of what is colloquially dubbed the "L-pocalypse." So it's especially dank that the L is the city's only subway line with advanced technology.

Don't expect this new fix to work, even with those $19 billion. (If passed, the plan will almost certainly cost much more.) The MTA has an almost perfectly uninterrupted history of failing to get any job done well, on time, or effectively. Importantly, the plan doesn't address the core issue with the NYC subway and many other transit systems around the country: The people who operate it are not responsible to the riders who use it. The riders who use it also pay a smaller and smaller share of the operating costs, thanks to subsidies from tolls levied on drivers using bridges and tunnels. Last year alone, those tolls kicked more than $1 billion to MTA buses and subways. And then there are the endlessly proliferating taxes and fees on people who purposefully avoid the subway.

As Jim Epstein and I explain in the Reason video "How to Fix New York's Totally F*cked Subway System,"

These include a special sales, corporate, and payroll tax, plus fees on real estate transfers, car rentals, drivers license renewals, and vehicle registrations. And the state just imposed a brand new surcharge on taxis and ride shares coming into Manhattan, with the money going to the MTA.

The predictable result of such subsidies is rotten service, periodic bailouts, and out-of-control costs ("subway workers on average make $155,000 in total annual compensation, or more than twice the passengers they serve").

The rambling wreck that is the New York subway isn't just the MTA's fault. It's the result of a dysfunctional management system, borne of earlier crises in cash flow and operating failures, that centralizes a huge amount of power over the system in the governor's office in Albany.

Any reform plan that doesn't fundamentally alter how the subway generates and uses its revenue is doomed to failure. The single best practice for any transit system, says Reason Foundation policy analyst Baruch Feigenbaum, is to have its riders pay as close to the full cost of the system as possible. Low-income riders, students, and other special cases, he notes, can get special fares or rebates. "That is the most efficient system," he explains, and it's "also the best system for the rider, because if the rider is the one paying the cost, then the transit agency is serving the rider. If Albany is bailing out the transit system, then it's going to be whatever Albany wants."

It took decades for New York's subway to upgrade its turnstiles and to modernize its payment systems away from tokens to electronic cards. Such laggard behavior was always justified in the name of New York exceptionalism. (When I lived and worked in New York in the 1980s, people would seriously claim that subway tokens were somehow as integral a part of the greatest city in the world as bagels, street crime, and public urination.) To this day, the service doesn't charge riders based on the length of their trip or whether it's rush hour, as most other systems do. When riders, who currently pay around $2.75 a trip, are bearing the actual costs of the system, they will be motivated to demand top-flight service; if there's something New Yorkers are exceptional at, it's bitching and moaning about bad service. The difference under Reason's plan is that the MTA will also be in a position to use its revenue wisely and directly, rather than answering to an overlord who lives 150 miles north of the city.

Watch "How to Fix New York's Totally F*cked Subway System":

Links and details here.