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NYC Ferry is ‘swimming in subsidies’ with $10.73 per passenger: report

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Per ride subsidies could rise to a staggering $24.75 with the system’s expansion

Max Touhey

Those scenic ferry rides come at a steep cost.

The six-route NYC Ferry system transports fewer people annually than the subway shuttles in one day, but the nautical network is coasting on the second-highest subsidies among all mass transit options in the city, according to a new report by the Citizens Budget Committee titled “Swimming in Subsidies.”

Launched in 2017 to much fanfare by the de Blasio administration, the ferry system sails with a $10.73 per passenger subsidy—second only to the MTA’s express bus service with an $11.79 per rider subsidy. In fiscal year 2018, operating costs reached $56.7 million to shuttle 4.1 million riders per year—that translates to roughly two days worth of local bus trips. With plans for an expansion in place, capital need is expected to soar to $638.5 million by 2022.

Part of the problem stems from Mayor Bill de Blasio’s push to keep the cost per a ride on par with the MTA’s $2.75 subway and bus fare. Meanwhile, the vessels serve long routes with low riders and most New Yorkers only use the ferries on weekends and during the warmer months. The Citizens Budget Committee urged the city to reevaluate how it runs the service before embarking on a a multimillion-dollar expansion of the program.

“Before an expansion of service is implemented, City officials should reconsider the policy choices that contribute to the high subsidies, evaluate options that would reduce the level of subsidy, and consider whether alternative uses would meet the city’s transportation needs more efficiently and more effectively,” the report states.

The low-ridership service, which the New York City Economic Development Corporation operates through private contractor Hornblower, uses a $10.73 per ride subsidy. Comparatively, the subsidy for a subway fare is a mere $1.05, a bus fare is $4.92, and the Long Island Rail Road is $6.07. Only the MTA’s express bus service, which is pricier than ferry fares at $6.50 a ride, costs more is subsidies than NYC Ferry per a trip.

At the moment, ferry service serves points along the East River spanning from the Sound View section of the Bronx to Bay Ridge, Brooklyn. It also includes a route to Far Rockaway—this line especially has a highly seasonal ridership pattern. The New York City Economic Development Cooperation often charters additional boats to meet peak demand, which inflates operating costs.

The city is in the midst of planning for another expansion of ferry service with stops in Staten Island and Coney Island and the Citizens Budget Committee warns that with those new routes per passenger subsidies could rise to a whopping $24.75. A thorough review of the system’s finances and operations are needed now more than ever, the study stressed.

“Reviewing the system’s costs and subsidies through its first full year of operations should prompt consideration of whether maintaining the same operating strategy, pricing model, and expansion plans will be the most efficient and most effective use of City transportation funding,” the report continues.

Alternatively, the commission suggests that the city slow its expansion and increase its fees, especially on weekends and during the warmer months of the year. NYCEDC challenged the report, dismissing its hefty price tag over the last few years as “startup costs.”

“NYC Ferry’s ridership has grown dramatically in just two years because we’re providing affordable, efficient transit to New Yorkers that lack other good options,” said Stephanie Baez, a spokesperson with NYCEDC. “Any new dependable transit service comes with startup costs, but these will decrease over time as ridership grows. We’ve taken the resoundingly positive feedback from over 8 million riders from the Rockaways to Soundview as an encouragement to bring NYC Ferry to even more New Yorkers in the years ahead.”