The New York City Economic Development Corporation (EDC) is a nonprofit corporation charged with leveraging New York’s assets to spur job creation, stimulate investment and improve the city’s quality of life.
One or all of these objectives, evidently, were in mind when the EDC entered into a public-private partnership in 2017 with San Francisco-based ferry company Hornblower to create a citywide ferry service. NYC Ferry, as the new ferry service was named, merged with the East River Ferry with the aim of growing into a network of routes serving all five boroughs.
At the time, then-Mayor Bill de Blasio heralded the ferry system expansion as a much-needed transit option for communities underserved by existing public transportation, as well as a way of connecting waterfront communities to emerging job centers. Despite its high operating costs, the mayor insisted on keeping the ferry fare at $2.75 per ride, equal to the cost of a single MTA bus or subway ride.
New York is a multi-modal city, and ferries are an important component of a vibrant transit system serving the needs of different riders. However, all transit systems are not equal. In the case of NYC Ferry, the City had essentially cut a deal to underwrite a leisure-oriented transit service for affluent New Yorkers and tourists who could certainly afford to pay more. In truth, the ferry is a premium transit service on par with express bus service, another heavily subsidized system, which charges $6.75 per for most riders.
When NYC Ferry began operations, I was one of Mayor de Blasio’s appointees to the MTA Board [Note: The MTA has no authority over NYC Ferry]. Not surprisingly, my criticism of the ferry pricing structure did not make me very popular at City Hall. But when I accepted the mayor’s nomination to the MTA Board, it was with an understanding that he was getting someone who would use the position to advocate on behalf of low-income transit riders to make the city’s public transit system more affordable and accessible to the city’s working poor.
Considering some of the pressing public transit needs in New York City that deserved attention and more resources, I could not stay silent about a grossly inefficient use of precious public dollars, especially by a mayor who came into office pledging to level the economic playing field for low-income New Yorkers.
Then, in 2019, the Citizens Budget Commission (CBC) released a report titled, “Swimming in Subsidies, The High Cost of NYC Ferry,” which showed that fare revenue in 2018 covered only 22 percent of NYC Ferry’s operating costs.
A recent audit by the City Comptroller’s Office unearthed layers of problems in management, procurement and operations with NYC Ferry underscoring a staggering lack of oversight by the de Blasio administration’s EDC. Most glaring is the finding that the EDC failed to disclose $224 million in expenditures and understated the extent to which the City was subsidizing ferry riders. For example, in 2016 the EDC estimated taxpayers would subsidize the service at $6.60 per ride. However, according to the audit, taxpayers paid $12.88 per ride during fiscal year 2021. That is substantially higher than subsidies for the subway ($1.05), bus ($4.92) and rail service ($5.62 Metro-North; $6.07 LIRR) in the region.
When the audit was made public, Mayor Eric Adams wasted little time imposing new rules for NYC Ferry’s fare structure that would lower fares for low-income city residents while charging more for those who could afford it.
Under the mayor’s plan, New York City residents who are eligible for half-priced Fair Fares MetroCards, seniors and people with disabilities will be able to ride on the ferry for $1.35, down from the current $2.75 price. Ten-trip ticket packages on the ferry will be available to regular commuters for $27.50. However, tourists and non-low income riders who use the ferry occasionally will be charged $4.00 per ride. The new pricing system goes into effect in September.
Mayor Adams also indicated that, under his administration, the EDC will be more transparent in its reporting of NYC Ferry budget and maintenance data to avoid the kind of accounting irregularities and weak oversight found in the Comptroller’s audit.
Based on ridership projections, operating costs and the current pricing structure, the CBC report cautioned that subsidies for the ferry could eventually rise, from the current $13 to $14 per ride reported in the Comptroller’s report, to nearly $25 per ride on some ferry routes. For this reason, the mayor should remain open to increasing ferry fares for “day trippers” and tourists.
But for now, it is good to see some positive news come out of the Comptroller’s audit.
David R. Jones, Esq., is President and CEO of the Community Service Society of New York (CSS), the leading voice on behalf of low-income New Yorkers for more than 175 years, and a Member of the MTA Board. The views expressed in this column are solely those of the writer. The Urban Agenda is available on CSS’s website: www.cssny.org.