Taking NYC workers for a ride

March 13, 2013

Petrino DiLeo explains what's behind the recent round of fare hikes imposed by New York City's Metropolitan Transportation Authority.

THE LATEST round of punishing fare increases hit New York City's Metropolitan Transportation Authority (MTA) system last weekend. Base fares for subway and bus riders jumped from $2.25 to $2.50. It's the fourth increase in just the last 10 years and 17th fare increase in the system's history. As recently as May 2003, fares were $1.50, 40 percent lower than they are today.

In addition, monthly unlimited MetroCards have risen to $112, an $8 increase; weekly cards cost a dollar more at $30. In addition, when it introduced MetroCards, the MTA began offering pay-per-ride bonuses when riders spent $10 or more at a time. But that bonus has been scaled back since its introduction. In the current adjustment, the bonus has been dropped from 7 percent to 5 percent. Most punitively, the latest hikes introduce a $1 fee every time you purchase a new MetroCard.

Aside from subways and buses, tickets on the Long Island Railroad system rose between 7.1 percent and 15.3 percent, depending on ticket type and distance traveled. And tolls on the seven bridges and two tunnels the MTA operates rose from $4.80 to $5.33 for those with E-ZPass cards and from $6.50 to $7.50 for cash customers.

Inside a New York subway station

"It's like, when is this going to end?" one rider told local CBS News. "There's no regulation. That's my question: They can just do whatever they want?"

"The MTA prices seem to be going up a lot faster than cost-of-living and salary increases," said another rider. "They seem to be raising fares automatically once every two years, and that's not a great policy. They should only increase fares when the economy is in good shape, when people aren't struggling so much to pay for food and rent."

The fare hikes are expected to raise $450 million yearly for the agency. And MTA is already telegraphing that another hike will come in 2015.

SUCH FARE hikes used to be a rarity. When the system began operation in 1904, fares cost five cents. The price stayed that way for 44 years--through the First World War, the Great Depression and the Second World War. Fare hikes were proposed throughout those years, but seen as unacceptable for a system whose purpose was to provide affordable mass transit options to all New Yorkers.

Finally, in 1948, the fare rose to a dime. That was the first of 17 increases in the last 65 years, with hikes becoming more frequent and more costly in recent decades. Fares stood at 35 cents up until mid-1975, before jumping to 50 cents. A little over 10 years later, fares hit a dollar, and the spikes have come fast and furious since then--far outpacing inflation in the same time frame.

A fare of a nickel in 1948 adjusted for inflation would come to 48 cents today. Even looking more recently, the $1 fare from 1989, adjusted for inflation, would work out to $1.76 today. Today's rates adjusted for inflation, then, are 42 percent higher than what riders were paying in 1989, and 500 percent higher than what they were paying in 1948.

Moreover, in today's system of MetroCards, the fares are regressive. Poorer New Yorkers can't afford to pay for monthly MetroCards, where the average ride-per-fare becomes more affordable. Most also don't have transit costs as benefits at work.

And these system-wide increases come at the same time that the MTA continues to scale back services and routes. In 2010--the last time fares were increased--several subway lines and more than 30 bus routes were eliminated. The MTA also eliminated agents from dozens of stations around the city. It also reduced service on buses, subways and metro rail lines, increasing wait times, especially during off-peak hours.

Worse, rather than trying to improve service, the MTA is spending resources to focus on cracking down on fare evasion. It has rolled out an "Eagle Team Bus Fare Evasion" initiative that beefed up security on bus routes to crack down on people not paying the increased fares. Accused evaders are hit with $100 summonses.

Then-MTA Chairman Joe Lhota pleaded poverty throughout the process of pushing for higher fares. (Lhota stepped down at the end of last year, and no replacement has been named.) In December, Lhota said, "We are not a fat, profligate, out-of-control agency that people have tried to make the MTA out to be." In 2013, Lhota claims the MTA will have achieved $809 million in recurring savings due to cost-cutting measures implemented in recent years. He's also talked about Albany chronically underfunding the agency.

BUT AT least some of the MTA's budget difficulties are clearly self-inflicted, with costs being passed down to working-class New Yorkers.

In 2011, the group United NY issued a 20-page study detailing how interest rate swaps ended up gouging the system. The report estimates that New York state, New York City and other New York public entities are today paying more than $236 million per year to the big banks on just a few of these swap deals. Since January 2000, MTA has already paid out a net $658 million to banks. To fund these payments, the MTA has demanded concessions from its unionized workforce, cut services and bus and subway lines, and repeatedly raised fares.

Overall, according to a 2005 analysis, the system has become overly reliant on debt to fund its capital programs. In the 1980s and early 1990s, about one-third of the MTA's funding came from debt. But in the 2000s, the percentage jumped to 61 percent, according to the report. Federal and state funding has dropped, leaving the MTA to take out loans--and then pass the costs of servicing the debt onto riders.

The MTA has also used its financial straits as a reason to extract concessions from its workforce. The fare hikes also come at a time when the MTA workers--members of Transport Workers Union (TWU) Local 100--have been without a contract for more than a year. As the New York Post reported in mid-February, the MTA and TWU hadn't had a negotiating session in more than three months. The section of the TWU's website devoted to contract negotiations hasn't been updated in more than a year.

In response, a grassroots group called No Fare Hikes is encouraging riders that have unlimited cards to swipe other riders in when they leave subway stations. Swiping in other riders is not illegal, as long as you're not selling the swipes. Unlimited cards can be used every 18 minutes. So after a typical subway ride, the card is usually eligible to be swiped again. The group has produced "Swipe Back" buttons so riders can let others know they're willing to swipe them in.

"It's about reducing the shame and letting people know that some of us can't afford this," one participant told the International Business Times. "Whether you need a swipe or you can give a swipe, the buttons are a way to let people know that you're a New Yorker who is willing to help out."

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