Blowing Up the MTA

New York governor Andrew Cuomo says he wants to “blow up the MTA.” He is angry because MTA had decided to shut down the L subway line, one of the most heavily used lines in Brooklyn, for 15 months for repairs without telling him that it could have done the repairs while still running the trains, albeit with some delays.

Cuomo claims he went along with the proposed shutdown, which some called “L-mageddon,” until an angry constituent asked him why he hadn’t considered the alternative of keeping the train going on a limited basis. He had replied that he was relying on the experts to tell him what could be done, but the constituent pointed out that the experts said the state couldn’t replace the Tappan Zee Bridge, but he found a way to do so.

So Cuomo went back to the MTA which said yes, it was possible to keep the trains going while doing the repairs. After adopting that plan, Cuomo told the New York Daily News that he wants to “blow up” the MTA for not being accountable to anyone.

The 17 members of MTA’s board are appointed by the state, the city, and various suburbs, leaving the board as a whole accountable to no one. This has led to fights between Cuomo and New York mayor de Blasio over who is really responsible for the MTA’s problems. Cuomo’s plan to blow up the agency would consolidate power in the hands of the governor.

The New York Times cheerfully supported the governor, calling the L line situation a “fiasco” that revealed just how “incompetent” the MTA is. Yet it isn’t clear how Cuomo’s reforms are going to solve the real problems of the MTA, which Cuomo blames on a “passive conspiracy of the transportation industrial complex” in which consultants and contractors get contracts with limited bidding and charge an “MTA premium” of 25 percent because of supposed problems working with the bureaucracy.

Even that doesn’t explain why the MTA would willingly shut down one of its major lines when it didn’t have to, thereby giving up millions in potential revenues. The answer to that can be found in the curious economics of New York’s transit system.

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The nominal fare to ride the New York subway is $2.75, but with monthly cards and other discounts the average fare revenue per trip was only $1.30 in 2017. Meanwhile, MTA collects far more revenue from auto drivers who cross one of seven bridges and two tunnels in the city.

Plus, starting on January 1 of this year, anyone who hires a taxi has to pay a $2.50 surcharge, while Uber/Lyft riders pay $2.75, all of which goes to support the MTA subway. Basically, MTA makes more money from many New York City travelers who don’t take the subway than from those who do.

The bottom line is that the MTA is far better off, earning more revenues and incurring fewer costs, when people take a taxi or ride-hailing service than when they ride the subway. It’s also better off when people drive their own cars if they happen to use one of MTA’s seven bridges or two tunnels. So why wouldn’t it want to shut down the L line?

Cuomo’s plans for the MTA would actually make this situation worse. He wants to impose what everyone calls congestion pricing, but which is actually cordon pricing, on vehicles that travel south of 60th Street in Manhattan. Under one proposal, the fee would be about $12 for cars and twice that for trucks. This will do little about congestion but it will give the MTA one more incentive to encourage driving and discourage people from riding the subway.

Cuomo is going to have to dig deeper into the MTA’s bureaucracy and incentives if he wants to truly reform the system. Unfortunately, he doesn’t understand that bureaucracies are ultimately ruled by their incentives, not by the elected officials who appoint their leaders.