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Free Buses, Cheaper Subways -- and a Solution to New York's Traffic

Gotham Gazette

The Place for New York Policy and politics

Citizens Union
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Free Buses, Cheaper Subways -- and a Solution to New York's Traffic
Photo (cc) Pete Biggs

Last spring, when Mayor Michael Bloomberg proposed an $8 "congestion fee" to drive into parts of Manhattan, the plan fell victim to several intrinsic weaknesses. Geographical inequity, for one: Manhattan residents and New Jersey drivers would have ponied up a lot less than car commuters from Brooklyn, Queens and Long Island. Lack of ambition, for another: The promised 6 percent drop in midtown gridlock seemed a meager reward for ending free use of city streets and bridges.

But the basic idea is a good one, as experience in London, Stockholm and Milan has shown. Can "congestion pricing done right," as new State Sen. Daniel Squadron has called for, fix the Bloomberg plan's flaws? With a smarter plan, can we make a serious dent in traffic tie-ups that by some estimates cost the city $13 billion a year, while creating so many winners that the plan survives the legislative gauntlet?

What This Plan Would Do

Here's one possibility:

  • Replace the mayor's flat $8 toll to drive into Manhattan south of 60th Street with a sliding scale of charges. All cars and trucks trips driving across 60th Street from the north or entering midtown or lower Manhattan via a bridge or tunnel would pay a fee, but it would vary, from $10 during weekday peak hours down to $2 at night and much of the weekend. The charge would be at least twice as effective in unsnarling traffic as the mayor's $8 flat fee yet would average less -- around $6.
  • Since all vehicles contribute to congestion, all vehicles pay: no "offsets" for other tolls paid by drivers from New Jersey, no matter how much they paid to cross the Hudson, and no exemptions for "black cars" driven into Manhattan to pick up or drop off their largely well-off clientele. For medallion cabs, which circulate a great deal within the "cordon" without crossing it, a surcharge on fares gives an equivalent effect.
  • Dedicate the revenues from the congestion toll and taxi surcharge to eliminate bus fares (which will speed boarding), make trips within the city on Long Island Rail Road and Metro-North commuter trains free (which will help ease subway crowding), and cut subway fares.

This plan originated with Ted Kheel, the lawyer and civic activist who, for the past two years, has sponsored a research program to realize his hope of making car travel more efficient and mass transit more affordable by integrating the two systems. Kheel's foundation, Nurture New York's Nature, has funded development of a computer model -- the "Balanced Transportation Analyzer" -- that predicts how the new tolls and fare incentives will alter commuter behavior and calculates the resulting changes in travel speeds and agency revenues.

The analyzer is firmly grounded in empirical evidence. For example, to calculate how many auto commuters would shift their trip from the 6 a.m. to 9 a.m. morning peak, when the $10 toll would apply, to the 5a.m. to 6 a.m. hour, when the toll would drop to $4, the analyzer draws on data about drivers' actual time-shifting after the Port Authority instituted time-variable pricing in 2001. The same approach lets us estimate that a variable subway fare topped off at $1.50 during the 8 a.m. to 9 a.m. and 5 p.m. to 6 p.m. rush hours and tapering down before and after would cut subway ridership during those two rush hours while increasing it at less crowded times.

The analyzer is now making the rounds of the regional transportation agencies. No less an authority than "Gridlock" Sam Schwartz, the former chief traffic engineer for New York City and the dean of his profession, has pronounced the model "comprehensive, logical and the best I've seen."

Run this new congestion-pricing plan through the analyzer, and the numbers are striking. Charge a 24/7 congestion price varying from $2 to $10 and increase taxi fares by a third, and the resulting revenue could allow the Metropolitan Transportation Authority to halve the average subway fare and make all other transit inside the city, including buses and commuter trains, free. The combined carrot and stick will increase the number of people traveling into the heart of the city while reducing the number of cars. This would improve daytime traffic speeds by an average of 20 percent in Manhattan south of 60th Street and provide sizeable improvements on the approaches from the boroughs and New Jersey.

To be sure, our plan won't cure the inherited MTA deficit. Other proposals have been advanced to do that, such as the one proposed by the Ravitch Commission last fall. A "Kheel-Komanoff" plan, however, could be powerfully merged with a deficit-plugging plan, enhancing it in crucial ways. Indeed, the Ravitch plan, which may be adopted in some form this spring, is fully compatible with our model. The small -- and controversial -- portion of that plan that calls for geographically biased bridge tolls would be replaced by the Kheel-Komanoff universal toll and taxi fee. (Note to residents east of the East River: Under the Ravitch plan, which calls for bridge tolls, alone, you would account for 60 percent of all fees collected. That falls to 36 percent under Kheel-Komanoff, which spreads the burden among more drivers.)

The merged plan could keep the payroll tax Ravitch recommends as well as his calls for greater efficiency and transparency at the MTA. If additional monies are needed to fund the authority's capital budget, these could be drawn from the congestion-pricing pot by deferring some of the drop in subway fares. The provision for free buses should be inviolate, however, because many poorer New Yorkers rely on buses and they are a mainstay in communities underserved by subways.

Our plan benefits everyone, including drivers, who will pay more but get a faster and more reliable commute in return. The biggest beneficiaries may be bus riders. The free fare will not only stretch their paychecks but also speed their trips, since no one will have to stop and swipe a Metrocard to get on board. New Yorkers would see overall time savings running into billions of dollars, not to mention fewer car crashes, healthier air and an improved quality of life.

Mayor Bloomberg, Governor Paterson, MTA Chairman Sander, fellow New Yorkers: That traffic plan you've been waiting for? It's right here.

Charles Komanoff, an independent policy analyst, is president emeritus of Transportation Alternatives and a founding trustee of the Tri -State Transportation Campaign.

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The Place for New York Policy and politics

Gotham Gazette is published by Citizens Union Foundation and is made possible by support from the Robert Sterling Clark Foundation, the John S. and James L. Knight Foundation, the Altman Foundation,the Fund for the City of New York and donors to Citizens Union Foundation. Please consider supporting Citizens Union Foundation's public education programs. Critical early support to Gotham Gazette was provided by the Charles H. Revson Foundation, Rockefeller Brothers Fund and the Alfred P. Sloan Foundation.

Public Funds, Empty Ferries

By Matthew Schuerman

Even before September 11, regional planners were looking to ferry boats to provide a third type of mass transit, something as nimble as a bus and as quick as a subway. Local and federal governments were expecting to spend more than $100 million to build or renovate terminals along the Hudson River. Last February, the Metropolitan Waterfront Alliance, a nonprofit organization, called for a "ferry loop" that would make 25 stops around Upper New York Bay, likening the idea to the regional highway system.

When the terrorist attack crushed the downtown PATH terminal and disrupted tunnel traffic, ferries became even more important. Unable to go under the Hudson, many New Jersey commuters went across it. Weekday ferry ridership, measured in one-way trips, grew from an average of 36,000 to 65,000.

But it is easy to exaggerate the potential of running boats across the harbor. The Port Authority of New York and New Jersey, prompted by Deputy Mayor Daniel Doctoroff, has since put into place an agreement that is a case study in how governments should not subsidize private companies.

TAXPAYERS PAY, BUT FEW PEOPLE RIDE

The Port Authority offered a money-back guarantee for increasing ferry service from Hoboken to Lower Manhattan, and from the East Side to the West Side, to a company called NY Waterway. Unlike the Staten Island Ferry, which is owned and run by the city, NY Waterway is a private company, the dominant ferry company in the metropolitan area. The Port Authority said it would pay NY Waterway for any additional expenses not covered by the fare box with money from the Federal Emergency Management Agency. It also agreed to pay the company a management fee, recently disclosed as about $300,000 a month. In announcing the agreement, Mayor Michael Bloomberg called the new services, "a fast, convenient and economical option for getting to and around downtown." Governor George Pataki said it would be "much easier for tens of thousands of commuters and visitors to get into, and to stay in, Lower Manhattan." Arthur Imperatore Jr., president of NY Waterway, said his company would "carry thousands of new commuters to work."

The press could hardly find anyone to speak against the idea. Gene Russianoff, a staff lawyer for the New York Public Interest Research Group, sums up the prevailing sentiment this way: "It's hard to be anti- ferry. It's like being anti-Bambi." Russianoff, however, does have reservations. "I have questions about how much it is going to cost, what the demographics of the riders getting the subsidies are. The Bloomberg administration says [they're] a hard-nosed, green eye shade group that is closing a $5 billion budget gap. I'm concerned that in the excitement of getting a new ferry service they're not asking all the right questions."

The answers to those questions are becoming clear. Ferry ridership did double in the first six months after September 11th, when there were no government subsidies. But ironically it has grown very little since the subsidies kicked in, in April. NY Waterway counted 21,884 one-way rides on the new cross-Hudson lines on May 1, compared to the 21,103 counted on March 20 before the new service went into effect, according to spokesman Pat Smith. That is about 780 new rides per weekday. (That comes to just 390 new ferry commuters who go across the Hudson in the morning and back in the evening). Port Authority officials recently estimated the total cost of the additional services to be as much as about $120,000 per weekday. Since the ferry riders who are benefiting from these new services pay three dollars per ride, doing some arithmetic reveals that taxpayers are subsidizing the new passengers to the tune of about $149 for each ride.

Another subsidized line, a free shuttle boat connecting a pier on the east end of Wall Street with the World Financial Center, is downright embarrassing. It carries only 50 passengers a day, according to NY Waterway. Since it makes more than 100 trips a day, at least half of them must be empty.

"It's too soon to evaluate the additional riders," replied George Cancro, the supervisor of ferry services for the Port Authority. Both the Port Authority and the Bloomberg administration say it struck the agreement with NY Waterway in response to an emergency situation. "We were ensuring that employers remained in lower Manhattan and employees did not leave their employment because of access issues," said Cancro,. "We were also ensuring equal access in anticipation of employers returning as repairs to their building were completed and the red zone shrunk. We need to be pro-active, not re-active." Cancro expects ridership to increase in the coming months.

But will passengers ever materialize in large numbers? After all, the ferries are best for people who live on the edge of one bank of the Hudson and work exactly on the other bank. Otherwise, commuters need to take a bus to the pier, transfer to the ferry, and transfer again on the other side. The pier where the subsidized routes originate is by the Hoboken train terminal, which has no parking lot nearby.

Had there been a real demand for a Hoboken-to-Battery Park City service, NY Waterway would probably have tried to meet it on its own. Arthur Imperatore, and his father, Arthur Imperatore Sr., who founded the company 15 years ago, are smart businessmen. They have turned the company into the nation's largest private ferry service. If NY Waterway had sensed a demand, it would not have waited until April to sail more boats out of Hoboken to Lower Manhattan. (The company had already added seven routes from other parts of New Jersey since September 11 on its own dime.) But when the government came by and guaranteed a profit, the Imperatores had nothing to lose.

NY WATERWAY'S CONNECTIONS

As it happens, NY Waterway has ties to the politicians and officials involved in forging the subsidy. The Imperatores have helped Governor Pataki's run for re-election. The company confirmed that family members were the hosts of a recent fundraiser, and campaign finance records show a $1,000 cash contribution from the younger Imperatore. Some time ago, NY Waterway hired as a vice president Donald Liloia, the former supervisor of ferry services at the Port Authority. Last summer, the company helped out NYC 2012, the committee, at the time headed by now-Deputy Mayor Doctoroff, trying to bring the Olympics to town. Smith, the company spokesman, confirmed that NY Waterway charged only for labor when it lent a boat to chauffeur Olympic officials on a site evaluation trip.

As it also happens, the expanded ferry service was never put out to bid. Smaller companies were not even asked. "There was an emergency need," Jennifer Falk, a spokeswoman for the mayor's office, said in March. "NY Waterway was the only private entity that could accommodate our needs."

But it is easy to dispute that there was much of an emergency need, since the new lines have gotten riders, but mainly by pulling them away from NY Waterway's other, older routes, according to the city Department of Transportation figures. And the other ferry companies dispute that NY Waterway was the only alternative. One of those companies, SeaStreak, said it would have liked at least a chance to bid on the extra service. "We would have been interested if we had known about it," said David Stafford, SeaStreak's general manager. "We bid on most things that come through." It doesn't matter that NY Waterway is bigger, Stafford says. The Imperatores did not have the equipment on hand either. They had to go out and lease boats and crews to take on the new routes. And that has caused problems for another operator. John Koenig, president of New York Fast Ferry, says he wanted to expand his own service from Monmouth County along the New Jersey Shore to Wall Street but couldn't find more boats. NY Waterway, backed by government funds, has locked down all available ferries on the East Coast, he said.

"There was not any recognition or awareness of what effect this would have on other operators," Koenig said. "We carry a lot of people who now ride ferries who previously may have been taking the PATH. We would like to add ferries [from Monmouth County] but it's damn near impossible to get the equipment." In other words, instead of allowing market forces to determine where the limited supply of ferry boats would meet the demand for ferry service, instead the Port Authority steered those boats to the Hoboken routes. So the commuters from Monmouth County lose out while a NY Waterway boat shuttles from Wall Street to World Financial with no one on board.

MONOPOLIES THEN AND NOW

Monopolies are nothing new to the New York ferry industry. Robert Fulton, whose business partner was developing Brooklyn real estate at the time, was given a state charter in the early 19th century for the exclusive right to sail steamers into the city. (Interestingly, the senior Imperatore also owns real estate on the New Jersey side of the Hudson. His tenants are many of the same people who take his son's ferries.) Fulton would then sell the right to operate certain lines to other companies. Cornelius Vanderbilt was one of those who defied those franchises and steamed into New York without permission. After the U.S. Supreme Court struck down the monopoly, the ferry industry really took off and Vanderbilt became one of the wealthiest men in the city.

NY Waterway's near monopoly -- it controls 90 percent of private ferry traffic -- is not officially sanctioned by the state, but the state subsidy since September 11th has solidified the company's dominant position.

NY Waterway has its defenders, among them Carter Craft, program director of the Metropolitan Waterfront Alliance. The only problem he sees with a monopoly is if the Imperatores sell the company to someone less civic minded. "They have created a public service over the last 15 years that is unsurpassed by any contribution to water transit that all of our public agencies put together have been able to create," he said. Craft aptly draws a parallel with the way New York City subsidizes private bus companies to operate lines so the transit authority does not need to.

Fair enough. But those bus lines are required to keep regular fares to $1.50 and to accept MetroCards. The bus lines are also required to meet certain performance standards. (A recent Independent Budget Office Report, available in pdf format, found that those standards are not always met.) NY Waterway now charges three dollars or more for its routes, and its monthly passes, for $80, do not work on New York subways. If NY Waterway wants to receive public funds, it should also submit to regulation of its fares and service quality. Right now it is unclear what sort of regulation they are being held to. There is as of last week no written agreement, though the city says it is preparing one.

It is undeniable that ferries can connect places that are close geographically but far apart logistically. It is also undeniable that alternatives to bridge and tunnel traffic should be welcome. But if some government agency -- the city or the state or some economic development corporation -- is going to step in and support ferry operations, it's got to do a better job than the Port Authority has done this spring. First, it must figure out a way to increase competition, not lessen it. Then, it will have to write clear contracts that actually do make ferry transport convenient and economical. In the meantime, hold the hype about tens of thousands of commuters. Let's just say the Port Authority found a way to get a few hundred more people to work, at a cost of a few million more dollars.

Matthew Schuerman is a freelance journalist in Brooklyn.

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Gotham Gazette is published by Citizens Union Foundation and is made possible by support from the Robert Sterling Clark Foundation, the John S. and James L. Knight Foundation, the Altman Foundation,the Fund for the City of New York and donors to Citizens Union Foundation. Please consider supporting Citizens Union Foundation's public education programs. Critical early support to Gotham Gazette was provided by the Charles H. Revson Foundation, Rockefeller Brothers Fund and the Alfred P. Sloan Foundation.

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