FTA 2007 Operating Cost Data: The Subway is Cost Effective But Will Have to Be More So, or Die With the Rest of the MTA

The attached spreadsheets compress National Transit Database data for 2007 operating costs into two three-page tables. The first shows operating costs per each hour a revenue vehicle (bus or rail car) is operated in revenue service, per unlinked trip, per passenger mile and per employee work hour. The second shows fare revenue per trip, and the percentage of operating costs covered by the fare. Data is provided for all automated guide way (AG), commuter rail (CR), heavy rail (subway or elevated) HR, light rail (LR), and ferry boat (FB) systems. My chief contribution to the tables is to limit the number of demand response (DR) handicapped paratransit systems, and bus (MB) systems, that are included, to the largest and a few others in New York State, as there are many such systems throughout the country, most quite small.

The data shows that the total cost New York City Transit pays to operate a subway car for an hour is lower than any comparable system other than Chicago, which apparently wasn’t paying enough of its pension, retiree health care, and track maintenance cost in recent years, resulting in a massive fiscal collapse and a near meltdown in service. Long Island Railroad and MetroNorth costs to operate each rail car for an hour were much higher than the subway -- and other similar commuter rail systems. NYCT buses do not have a similar advantage per revenue vehicle hour, and are in fact relatively expensive due to relatively high costs per employee work hour. NYCT bus costs are among the lowest per trip, however, as its buses are fuller. The subway covered 67% of its operating costs in 2007, down from prior years but better than virtually any other public system, MetroNorth (59.3%), the LIRR (46.3%), or PATH (41.4%). NYCT buses covered 36.9% of their operating costs, better than most but about the same as Westchester’s Bee Line (36.2%) and Long Island Bus (34.9%), something I hadn’t expected.

Let’s focus on the subway for a moment. There are those who would be pleased that the subway was covering less of its costs in 2007. There are some who agree with me on other things who would like the subway to be free, even if it meant less money for maintenance and service. As I’ve argued on other forums, however, the subway’s reliance on operating subsidies, and New York City’s reliance on the subway, allows the city’s transit riders to be blackmailed and treated as welfare queens by people and places whose transit systems -- and roads -- are far more subsidized than the subway.

Rather than beg for a bailout to be blamed on those residents and subway riders, a bailout that will prove to be inadequate, New York City and its transit riders would have been better off under the MTA’s so-called “doomsday” scenario, or worse. Because with some adjustments the subway could cover its cost and keep operating, when other parts of the transit system would have to shut down. Most people don’t read my posts, don’t read the newspaper, unless they are reading about celebrities, and will not stop sneering at those they are in fact draining until reality hits them in the fact. As it is, thanks to 15 years of irresponsibility, the MTA will be going down collectively, with the potentially profitable and absolutely necessary subway system going down with it. Generation Greed would have it no other way.

What if someone who actually cared about the future of New York City and State were in charge? They would do all they could to get the subway, exclusive of debt service and unfunded pension and retiree costs from the past, to break even as fast as possible -- even if that meant higher fares and higher productivity. Break even with adequate maintenance, that is. In so doing, they would ensure that the subway could continue to run, and the economy could continue to function, even if the MTA went bankrupt.

The federal, state and local governments are being drained as fast as possible by those who put less in, and take more out, with enormous debts and unfunded “entitlements” for the most entitled generation of senior citizens in the history of the planet being passed to the future. That future includes ongoing tax increases on the non-retired, benefit cuts for younger generations when they get old (and thus fall into ill health and poverty), and declining public services. Only services that do not compete for tax revenues will continue to function, and only those who do not rely on tax-funded services will continue to live well -- unless they are among the connected draining those taxes and getting privileged access to those services.

One shouldn’t be surprised that the LIRR is a sinkhole. After all, public schools in the portion of New York State outside New York City are massively overfunded as well, and local government employment in the rest of the state rises relentlessly. The LIRR’s fare operating cost recovery is lower than any other directly operated commuter rail system except Chicago, which has average fares that are one-third lower. Looking at the cost per revenue vehicle hour, the LIRR and MetroNorth appear to be equivalent, with MetroNorth recovering more of its costs in fares because its fares per trip are higher. Is that because it’s trips are longer? No, MetroNorth beats the LIRR (but not other commuter rail systems) on a passenger mile system as well.

In a better world, the LIRR and MetroNorth would also be shooting for cost sufficiency and fiscal sustainability, or at least cost sufficiency excluding the cost of maintaining stations, which perhaps ought to be borne by local communities. This would probably require some kind of automatic, barrier based fare collection via something like a Smart Card, with cameras, sensors and police ready to impose severe penalties on those who don’t swipe the cards before boarding and exiting, by hopping up on the platform rather than going up the stairs. That would allow fewer conductors, perhaps only one per train, as on the subway.

Perhaps the most horrific individual data item in the tables is the $70.20 per ride cost for para-transit in New York City, vastly higher than any other major demand response system -- and far more expensive than any individual taxi ride. The fare is $2.40 per ride -- the cost is $270 million per year and rising. Is this legitimate? It seems that in New York, everything that can be scammed will be scammed, and some of the largest scams have concerned private companies operating transportation for selected groups, whether the NYC school bus companies with their automatically renewed non-bid contracts, or Medicaid funded transportation services. When I compiled Medicaid data for 2006, New York State accounted for 8.7% of the resident income of the 44 states that had reported, but 19.8% of the Medicaid spending on transportation.

Let’s say that you are a NYC senior citizen who doesn’t want to drive anymore but also doesn’t want to take the bus or subway. All you have to do is go to one of the handful of corrupt physicians who certify people as handicapped, and you get to have the near equivalent of a car service ride on the public tab. Given this is New York, you might even already have that handicapped certification (on your car registered out of state for insurance purposes) to get the required parking sticker, or to get a disability pension from your government job. Any attempt to examine these certifications more closely is unlikely, given that virtually all members of the state legislature are of the same generation as those seeking such certifications. Collapsing service in the rest of the transit system, or collapsing para-transit quality for the legitimately handicapped, are more likely. After all, actually handicapped people tend to be poor, and care for the poor is not where New York’s tax dollars go.

I’m disappointed the Staten Island ferry, given the size and occupancy of the boats, costs $5.30 per ride, more than many -- and more than the private ferries operated by the Port Imperial Ferry Company. With no fare, the net cost of the ferry is $100 million, but that may be considered a subsidy for the MTA, which does collect fares on other portions of the transit trips Staten Islanders take.

Light rail proponents may be disappointed that most light rail systems have higher costs per revenue vehicle hour than New York City Transit buses. San Diego’s light rail costs are lower per revenue vehicle, hour, and lower per trip as well, since light rail vehicles can generally carry more passengers. NYCT’s attempt to improve the productivity of its one-driver-per-bus system is fewer, larger articulated buses, but these tend to be slowed by the larger number of people having to wait to pay fares. On some corridors having people pay fares off the bus before boarding could offset this by allowing boarding at all doors, but at the possible cost of increased fare evasion. Another solution is at the end of this post. In general, it is more difficult to come up with ways to increase productivity for buses than it is for for trains.

Note that the cost per ride for the MTA Bus Company ($4.10) is higher than for MTA New York City Transit ($2.40) even though the cost per revenue vehicle hour is about the same. That is because the MTA Bus company serves outlying areas of the city, mostly in Queens, with fewer riders per bus. As I’ve mentioned elsewhere, the MTA has avoided tabulation cost per ride data for individual lines, which would show who is subsidized more or less. As this implies, residents of lower density areas almost certainly cover less of their transit service from the farebox than residents of higher density areas. You can make transit less frequent in places with fewer riders, but at some point it becomes so infrequent as to be virtually worthless. Then again residents of lower density areas pay similar dedicated MTA taxes, despite being less likely to use mass transit. Rather than closely examine how all this plays out, the MTA just avoids the question, and allows those with the largest sense of entitlement to simply assert that they are getting the raw deal.

One of the cost-inflating factors for NYC buses is the fact that they run empty all night, particularly in Queens, I’ve been told from the inside. At 3 am the cost per ride might be as high for transit buses as for para-transit. It might be cheaper to have the para-transit operators run the routes, with smaller vehicles. Then again when NYC wanted to do something similar overnight on the Staten Island ferry, but a little political opposition from those in search of overtime managed to stop it. So perhaps it might make more sense to give up on overnight service altogether, rather than continuing to cut maintenance during the day.

As mentioned above, I’m surprised that costs on Westchester’s Bee Line system and Long Island Bus are about the same per vehicle revenue hour as for New York City, although New York City’s cost per ride is lower because there are more riders per bus. Among those complaining most bitterly about the 1/3 cent MTA payroll tax recently imposed are residents of outlying counties in the MTA service area. There are many tiny bus systems serving those areas that are not part of the MTA. Their costs per revenue vehicle hour are lower, primarily because of lower costs per employee work hour, but their fare cost recovery is pretty close to zero (19.5% for Suffolk County buses, 10.9% for Duchess County buses). And while they don’t get MTA revenues, these systems do get state aid, funded in part by state taxes paid by MTA customers.

To the “save the fare” and “free subway” crowd I make this offer. Let’s raise the fares, improve productivity, take a massive LIRR strike if necessary, and free from the costs of the past (unfunded pensions, debts), the subway, LIRR and MetroNorth. The MTA (or perhaps these organizations freed from the MTA) would be shooting for and achieving 100%-plus cost recovery, at which point neither wages for subway and railroad workers nor service quality for riders would depend on the feckless fraudsters saints, heroes and geniuses in Albany. If not covering 100% of their costs, the rail systems could cover most with net MTA toll revenues covering the rest.

And in exchange, whatever operating subsidies are left would be shifted to the buses, which would be made free. Overall service quality and wage levels on the bus systems would then depend on the availability of tax-based subsidies, in competition with the Greater New York Hospital Association and retired teachers. Relative service quality among bus riders would depend on political pull and grandstanding politicians, who would be “fighting for our share or perhaps a little more” while driving and parking for free and actually not giving a damn. For the bus operators, service quality would no longer be a real concern, because one gets what one pays for. Jammed in nose to butt on the bus you waited half an hour for? Well you didn’t pay for it did you? Who knows, a fare increase for paratransit and free buses might shift those who aren’t quite as handicapped from the former to the latter.

After all, for those transferring to the subway bus rides are now free anyway, as they are for school children, and for senior citizens and the handicapped they are half price. What share of total bus ridership does that added up to? How much would we have to lose?

The fare revenues, according to FTA data, of NYCT buses, the MTA Bus Company, Long Island Bus, the Westchester Bee Line, and the host of smaller transit systems within the MTA region, added to $1 billion, with the vast majority of this ($912 million) collected in New York City. The net operating subsidy for the subway is just under $1 billion, with the net operating subsidy for the commuter rail systems almost as much. All one would have to do is work to get rail costs down and revenues up, particularly on the commuter railroads, and shift around the subsidies.

As you might have guessed from this proposal, I occasionally ride the rails, but have substituted a bicycle for the bus. Let the bus riders go begging to the political class. I want to be free of them, and if rail riders as well as bicycle riders were free, the New York area might have a future. Not a good future -- if that were possible, Generation Greed would borrow against it and eliminate it. But something.

FTA 2007 Operating Cost Ratios2.xls66.5 KB
FTA 2007 Operating Cost Recovery.xls68.5 KB