Congestion pricing has brought new urgency on the challenges facing New York public transportation. Expanding the NYC Ferry would deliver a reliable, cost-effective boost to the public transit offerings.
NYC’s long and illustrious history is intrinsically linked with the water surrounding it. Due to its unique waterway access, New York quickly became the port to the New World. Ferries played an important role in the city’s rise. Vanderbilt built his first fortune as a ferry master from the remote countryside of Staten Island. Brooklyn was accessible solely by ferry until the Brooklyn Bridge was completed in 1869, and the Hudson River was similarly only traversable by ferry until the Pennsylvania Railroad tunnel was finished in 1914. Since then, our travel has revolved around the car and subways, and the ferries have lost their place. Once again the city’s travel habits and needs are changing. Ferries are a cost-effective, flexible, and easy-to-scale component of the larger NYC transportation network.
In 2017, NYC reintroduced a basic ferry system and returned to its waterways. The iteration of the ferry system is privately operated under charter from the city. The system has been a surprising success. During its first six years of operations, ridership has exceeded initial rider projections by over 60 percent. Due to increased demand two additional routes were added in 2023.
While the recent success of New York City’s ferries is evident, there are significant criticisms about their operational model. Detractors argue that the ferries are slow, limited in routing, and heavily subsidized by the city. For instance, routes like the UES to Wall Street ferry take nearly an hour compared to 35 minutes via the 6-train. Additionally, the ferry system requires a 170 percent subsidy from the city to operate, raising concerns about its financial sustainability.
However, it’s essential to note that all of NYC’s public transportation systems are subsidized. The 2022 MTA Operating Budget was over $19 billion, with only 23 percent of that amount generated by fares. Comparatively, the ferry fare covers 35 percent of the operating budget, while subway fares cover just 23 percent. A recent audit revealed that each ferry ride costs $12.88, with tickets sold at $4.50 and the city subsidizing the difference. Therefore, the concern over the ferry subsidy is somewhat misplaced.
Financial sustainability is another strong point in favor of the ferry system. The MTA’s budget largely goes to salaries, pensions, and growing maintenance demands, whereas the ferry system has negligible maintenance costs. Rivers do not require the same type of upkeep as subway tracks. Moreover, the cost of expanding the ferry system is relatively low. The Second Avenue Subway cost nearly $1 billion per mile, whereas new ferry stops would only cost tens of millions, making the ferry system scalable to profitability, unlike conventional subways.
New York City should continue to use the private operator model and encourage ferry system expansion across the city. Removing obstacles and issuing permits for construction on city-owned waterfronts would be a significant step forward. The private operators are incentivized to expand ridership, find new routes, and build new stops. Public-private partnerships have a long history of success in NYC, as evidenced by the early 20th-century subway expansion. As ridership increases, so does the economy of scale, eventually balancing the cost of operation with the fare price.
Expanding ferry routes is vital for increasing ridership and reducing operational costs. One potential addition is the Midtown Loop, aimed at serving daily commuters between Long Island City, Williamsburg, and Midtown Manhattan. Further expansion could include routes north into the Long Island Sound, towards the Bronx and Westchester, and up the Hudson River. Ferries can also connect inter-borough communities, filling gaps in the current transportation network. Collaborating with NY Waterway and the NYC Department of Transportation could result in expanded routing, and integrating ferry stops with bus routes and bike lanes will create a seamless transportation network.
While the MTA, NYC, and the State continue to conduct perfunctory reviews of light rail in Brooklyn, spend tens of billions on new airport transformations, and more billions on political preference projects, improving and expanding ferry service is immediately available and within reach without an eye-watering price tag. NYC should leverage the Private-Public partnerships already in place, allow for ferry stop expansion on city-owned waterfront and reduce the obstacles to expanding the system. The ferry system has proven to be a viable and reliable supplemental transportation service. There is no reason why the city couldn’t once again lead the way in an innovative, multi-pronged approach to public transportation.
Written by Aaron Shavel, Policy Fellow
The Alliance for Innovation and Infrastructure (Aii) is an independent, national research and educational organization working to advance innovation across industry and public policy. The only nationwide public policy think tank dedicated to infrastructure, Aii explores the intersection of economics, law, and public policy in the areas of climate, damage prevention, eminent domain, energy, infrastructure, innovation, technology, and transportation.