Sunday, October 18, 2009

Killing the cash cow

Last week WNYC's Brian Lehrer had a segment on tolls and transportation that made me squirm a little. There were several bizarre moments, including when Senator Savino embarrassed herself by giving a bike route from Boro Park to Flushing along the BQE service road and McGuinness and Northern Boulevards, and Stacey from Basking Ridge repeating the lie that "mass transit is not an option" for the disabled.



The most sensible people on the segment were callers Andres from Jersey City and TJ from Boro Park, and Lehrer himself. Despite her obvious windshield perspective and her partisan shilling for the car-oriented Bill Thompson, Savino was clearly pro-transit - although I'm disappointed that Lehrer didn't ask her to explain how she let bridge tolls fail in the Senate.

The biggest disappointment was Kate Slevin of the Tri-State Transportation Campaign and her resolutely sunny we're-all-winners-with-transit schtick - which might explain Tri-State's bizarre stance on the Tappan Zee Bridge widening. I was particularly frustrated at how Slevin completely missed TJ's question, responding with a stock speech about how people are turning back to transit, which wound up reinforcing his point. I think TJ's question is a great one, so let me quote it for you:
How much is policy set indirectly by retaining the car - and the driver in the car - as a cash cow, as opposed to developing public transportation more, which perhaps is a lower revenue earner?

TJ's question echoes one asked in June by commenter P on a Streetsblog post announcing the pro-XBL Streetfilm:
My guess is that the Port Authority doesn't want to forego the tolls from the cars currently using those lanes. Pressure needs to be put on the PA from elected officials and advocacy groups that see a larger vision than just the PA's bottom line.

I've been thinking about P's question ever since, and I've done a little number-crunching. According to the Port Authority's 2008 financial statement (PDF), 20,937,000 vehicles traveled eastbound through the tunnel in that year, and the total operating revenues were $153,536,000. The XBL study found that 1700 buses use the lane every day. I will assume that half the average daily traffic, or 28,681 vehicles, passes through during the XBL hours, or 8,994 per non-XBL lane. I will further assume that trucks are 7% of these vehicles, as they are on an annual basis, and that these trucks have four axles on average. The Port Authority website tells us that these trucks would pay about $32 each, while cars pay $8 and buses $4.

This leads me to conclude that each non-XBL lane brings in $87,058 per day, and replacing it with a second XBL would cut all but $6,800 of that out, leading to a annual drop of $30 million - 19% of the revenue from the Tunnel. We may all agree on this blog that it's worth it, but it's still a big hit to ask the Port Authority to take.

If the Port Authority currently loses thousands a day on the buses, it makes most of it back in gate fees at the bus terminal. Buses pay $40 per departure (PDF), including any bus that goes into the terminal and doesn't immediately deadhead back to Jersey. If we estimate that that's 1500 of the 1700 buses, it comes out to $60,000 a day. The problem is that the terminal is pretty much at capacity, so any additional buses going through the lane would probably drop off on the street somewhere - my recommendation is to send them through the planned 34th Street busway, but in any case they won't be paying any gate fees.

Also, none of this affects westbound traffic. Since the tolls are one-way eastbound, the Port Authority could keep that XBL round the clock and just reverse direction without losing any toll money. Sure, they'd cause the mother of all Manhattan traffic jams at first, but then people would get used to it, and more of them would take the bus.

All told, it makes sense that the Port Authority would drag its feet on setting up a second XBL. It also explains that they want it to be high-occupancy or toll, not a bus-only lane, even though that would significantly limit its effectiveness. P recommends pressuring the Port Authority to take a larger vision beyond their bottom line - which would be nice if it works. The only other solutions I can think of are to raise tolls on both cars and buses, or to build a new terminal somewhere else and charge for it.

Getting back to TJ's question, here's a pretty clear case where relying on car use to subsidize transit is unsustainable if we really want people to shift away from cars to transit. The good news is that if you build your transit right, as ridership goes up, so does profitability, so eventually either the passengers would pay for all the operating costs, but even if you don't, if enough people use the system, a consensus in favor of collecting taxes to fund "our transit" will probably form.

7 comments:

BruceMcF said...

Is it possible to charge buses from off-island for the use of an exclusive busway in Manhatten? That would give a revenue stream to offset lost tolls.

nathan_h said...

When congestion pricing (or tolling) holdouts ask about a carpool reduction, we respond that the carpool is its own discount. Perhaps we should have a taste of our own medicine when it comes to busses? I'm guessing that paying the full car or even truck toll would be a drop in the bucket when it comes to bus operating costs.

In principle I fully believe in rewarding socially beneficial behavior with subsidy, as the $4 toll for busses represents. But if it's a fact that it's negatively influencing PA politics, then it's not worth the slight boost to bus companies. Given the chance, a bus-full of folks can price personal cars right out of their dedicated bus lane.

arcady said...

Supply and demand! If you're cutting a general-use lane, you've now cut the supply of roadway capacity into Manhattan. If I'm not mistaken, a very significant cut, from 3 lanes to two. This means that, to keep the level of congestion constant, you can raise tolls, thus reducing the number of cars trying to fit through those lanes to the number that actually can, and getting some extra revenue. And where will those former drivers go? To the buses, most likely, increasing the bus companies' revenue, and probably allowing the Port Authority to help itself to a bigger cut of their profits.

And I totally agree with nathan h, the carpool is its own discount, especially if the costs per car are high enough.

Adirondacker12800 said...

8,994 per non-XBL lane

Impossible. Design capacity for a highway lane is usually quoted at 2000 per hour. If people follow each other too closely etc it can get over that. Rarely if ever gets over 3000 per hour. By then traffic breaks down and less cars can use the lane. Someplace somewhere there has to be a report on the PA's website that can tell you how many cars they handle at peak.

The Port Authority participated in the studies for ARC. They are throwing in 3 billion dollars, the cheapest way for them to get more people into Manhattan is to help build the ARC project. . . you have to keep in mind that the Port Authority ( and the TBTA ) aren't in this to make a profit. They are in it to move the most people the fastest. And in the Port Authority's case they will be helping to fund the freight tunnel between Jersey City and Brooklyn.

Cap'n Transit said...

Sorry, Adirondacker, I wasn't clear. The figure of 8,994 vehicles per lane was an estimate for the entire rush-hour duration of the XBL, which comes out to 2,398 per hour.

You're right that that's kind of high; if we assume 1900 per hour instead, it comes out to $68,970
per day. The annual revenue sacrificed in converting a general lane to a rush-hour XBL would be estimated at $23 million, or 15 percent of the total tunnel revenue.

You're right, of course, that the Port Authority isn't in this to make a profit, but they need to justify this reduction in revenue, and if they don't think it has enough political support they won't do it.

Alon Levy said...

the cheapest way for them to get more people into Manhattan is to help build the ARC project.

Yes, the cheapest way to get more people to Manhattan is to build a new deep-level station under 34th Street. Because 21 tracks, as we all know, are just not enough for Penn Station, with its stub-end service and long dwells.

Woody said...

No problem with me to raise the tolls on buses (and private cars, too). Like the Bolt Bus and others that load and discharge on streets near Penn Station, or the buses bringing tour groups to see the Rockettes or pay respects at the World Trade Center site. Due to their weight they put more stress on the streets and roadways. A toll of $16 per bus would greatly reduce the damage to the Port Authority's cash flow that supports all those bonds.