Should public transit be expected to make a profit?
It seems about every month or so a discussion revives online with a group of people calling for public transit to be made free. There’s a lot of disagreement to this assertion.
There’s never a bad time to talk about transit, but I’m writing this one in anticipation of New York state budget talks, where the MTA needs to make up a roughly $500m budget gap. The MTA could raise fares by a small amount. Meanwhile, a group of legislators are suggesting to make the bus system entirely free.
I see a free transit plan as a terrible idea that would further hurt the MTA’s large transit network, hurting commuters and growing carbon emissions.
Should public transit have to generate a profit? No. But I worry too many people see that as an opportunity to inundate it with harmful policy proposals.
Pay for value
Ridership peaked before the pandemic, and has since not recovered. What happened to all the people? Many have left for the suburbs, driven by the ability to work remotely. Offices are emptier than ever and there’s just less reason for someone to come into the city every day.
Yet even at 61%, millions of people are being shuttled around. The data is quite fascinating, as you can see Wall Street at half capacity while neighborhoods like Dutch Kills have grown substantially. People who live in the city still need to use it to get to their jobs, many of which cannot be remote. For just the cost of a swipe, you can get to much of the city.
Still, it doesn’t go everywhere. Projects like the Second Avenue Subway are egrigiously expensive and take decades to complete. All MTA capital projects are overbudget and overschedule. A lot of people seem to detest any development in their backyard.
And yet, it’s a critical piece of urban infrastructure. Being able to get to work, or anywhere else, without needing a car is a great benefit to everyone who lives here. How valuable is that?
A car is an expensive product, with fifteen percent of consumers now paying over $1000/month. Then you need to consider the costs of fuel, insurance, maitenance, and parking. That can get close to the amount of rent you pay.
The MTA meanwhile is $2.75 per ride, bus or subway, with a cap of twelve per week. That’s roughly $132 per month. That’s more than a 10x reduction in cost (my math is very rough). People should acknowledge that public transit is very cheap today when the alternatives are considered.
If the state doesn’t come through, the MTA will have to raise their fare by a few cents. People won’t like it, but it will still be a good choice. Even if a single ride cost $6, it will be cheaper than driving.
Paris’s subway is roughly $2. Berlin is roughly $3.
It’s true that general taxes often go towards roads, but expanding roads is a generally popular policy even though it causes induced demand. A number of urbanists will complain about many benefits we give to cars for free such as free parking.
However, drivers are used to paying for traveling. We should remove free parking lots in many places, though many parking garages even in cities are not free. Cars may go along a lot of roads for free, but many are toll roads that are often much more expensive than a subway ride.
Drivers get little gadgets for their car to automatically pay tolls, not too dissimilar but more costly than OMNY.
Why pay more then? If we assume people are rational actors, why are they paying quite a bit more?
Speed matters. Reliability matters. Frequency matters. EZPass has a dedicated ‘Express’ lane that will charge even more money to drivers for the privilege of getting somewhere a few minutes faster. People will pay more money to get somewhere quicker, and that’s why public transit needs to prioritize quality over price.
As such, we are getting a great benefit by having the MTA minimize their prices compared to the competition. However, that does leave the organization in a serious predicament.
Helping the poor
A developed country is not a place where the poor have cars. It’s where the rich use public transportation. -Gustavo Petro, Mayor of Bogotá
Free bus service is often portrayed as a way to help the poor, falsely assuming that only poor people use busses. The people who use the bus every day do not care much about price as much as frequency and reliability, because they understand the value of public transit is high.
Busses could benefit from electrification, dedicated bus lanes, and a number of public amenities which could take better advantage of the money that would be used for free fare.
I am happy to pay even an increased fee per-ride to fund better service. I also recognize that I’m able to afford that and not everyone can. That itself is not a good reason. The MTA already has reduced fare programs and could create any number of programs as needed to provide targeted benefits while allowing the wealthiest to pay. Philly has introduced similar programs for their transit system.
Policy trusts
The effects of fare free transit have been muddled, not greatly reducing the number of car trips nor actually reaching the on-time metrics that are promised.
People get really heated about asking someone to pay less than $3 to fund a public service. I don’t get why it’s so heated. The MTA loses an estimated $500 million each year in fare evasion, and that’s quite bad! Similar to tax evasion, people are choosing the anti-social behavior of not paying for public goods. I can’t understand their rationale, as most people pay some kind of fee on many public goods.
This tweet was full of people defending smoking on the subway. That’s such a bizarre defense and another example of people defending anti-social behavior in public places. How much second-hand crack smoke is enough to test positive? You’d probably have to be in the same car for several hours.
Like the shopping cart analogy, we shouldn’t accept people denigrating public spaces and making others feel unsafe and unwelcome. Perceptions of the subway being unsafe are not going to bring back riders.
How do we solve this? Should we flood the subway with police who monitor every little thing we do and escalate force dramatically? Is that my answer?
People get really heated about it. I don’t know. Do I want cops bludgeoning a teenager just for hopping the turnstyle? No. But that’s no reason to just throw up our hands and accept the state of things. We can have better discussions on reducing fare evasion if we didn’t consider $3 to be asking too much, and for people with drug addictions to be living good lives.
Do I really feel unsafe? Why not just switch cars, or wait for the next train? The bill promises not just free fares for busses but six-minute subway headways.
That would be great if achievable, as too often I’ve seen long gaps in trains that make me wonder if an Uber is just easier. Yet I don’t think we should put too much reliance on the MTA to make vast improvements here if the new funding does not prioritize quality.
Do I trust lawmakers in Albany to do the right thing for the MTA? I think they view busses as a nice thing for poor city residents and the whole MTA as some kind of quirky NYC thing.
Keep in mind that NYC is the only region in the country where most people take public transit to work. Lawmakers in Albany use cars. Everyone in their neighborhood uses cars. When a crisis occurs, can we actually trust them to focus on public transit over cars?
Last year, as oil prices spiked, the governor instituted a gas tax holiday at the cost of $600 million that was not spent on improving public transit across the state. Right there was the funding gap. States regularly put ample amounts of money into roads and vehicle infrastructure rather than actually getting subways to run every six minutes.
Can I blame them? In a democractic state, the representatives will represent the current needs of the public. If the public are mostly drivers, laws will prioritize driving.
In the wake of the Great Recession, financially struggling states cut a lot of public university funding from their budgets. This in turn forced colleges to raise tuition to make up the costs. Even New York hadn’t returned to full funding, as most constitutents don’t want to pay more in taxes. And if a law affecting public transit results in a negative experience, how much care will be put into fixing it?
MTA Shutdown
Climate change is a pressing matter that of course requires more focus. We need to engineer rapid improvements in our society, affecting energy, development, and even transit. Gas-powered vehicles are a major source of pollution while trains and electric busses are highly efficient.
We need to do more of the latter but in a way that actually works. Busses shouldn’t just get you to the library on a rainy Saturday. They should get you all the way across town to your date quickly and reliably. It’s rude to be late, and public policy should make it irrational to grab your car keys or order an Uber.
Environmentalist policy is a system, one where each action or inaction leads to a cascading series of trade-offs. There are no panaceas, but ways we could reduce emissions or grow them.
Fare free busses sound nice. If people use them more often, that reduces emissons, right?
But research shows the emission reduction is low. Instead, we hand the funding of critical infrastructure to lawmakers upstate who may not prioritize it. Free but unreliable services reduce usage, creating larger and larger budget gaps that can lead to a death spiral.
What does that future look like? In an effort to reduce costs, busses run less frequently. Many lines get cut. People who are poor, who cannot afford another option, are hurt. Meanwhile I guess I could take an Uber downtown every day. Of course, the surge of cars on the road will raise emissions, cause traffic, and a lot of other problems. That’s the trade-off.
In 2008, as the economy fell apart, the MTA proposed to shut down multiple train lines and cut back late-night bus service. They finally made a lot of changes in 2010, including the shutdown of some lines. While that didn’t come to pass, it’s not good to continually put critical infrastructure to the test. Like the national debt ceiling, potential crises should be resolved early and not put off until the last minute.
At the end of the day, I do not think public transit should have to make a profit. But it needs to survive.
The money that we put into public transit from any source should be used to create the greatest benefit to the public. I think we can all agree on that.
What is best for the public benefit? Is it the status quo, but a bit cheaper? Or is it a transit system that grows to meet demand in more places, providing ever-improving service that causes people to leave their cars?
