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Metropolitan Transportation Authority (MTA) Chair and CEO Janno Lieber today delivered remarks at the Crain’s New York Business Power Breakfast, discussing topics including the New York City metropolitan region’s economic recovery, the future of mass transit and work patterns and other related issues.
A transcript of Chair Lieber’s remarks and responses to Question-and-Answer appears below.
MTA Chair and CEO Janno Lieber: Okay, good morning, everybody. How was mass transit this morning? Okay? Got you here? On time? On time, that’s our motto. Hard to compete with the weather though, for those of you who got to walk, that's pretty appealing too. Listen, thank you, thank you to Crain’s for having me. Claudia Wagner is here, a dear old friend from the Koch administration. I started my career in economic development in the Koch administration, and actually worked for Alair Townsend who went on to a storied career as the publisher of Crain’s. And in those days, Crain’s was the only outlet that really covered New York City economic development, and we treated it as our Bible. Although, like the real Bible, the word of God often judged us harshly.
Okay, quick snapshot: unemployment remains high, there's a ton of empty office space – 22% in Midtown alone – leaving the future of the city's office market very much in doubt. Crime, both perception and reality, is a huge public concern, huge, and weekday subway ridership hovers at roughly three and a half million people. Where are we? New York City, 1993. Back then, real estate sage Sam Zell told everybody in the business that the only objective was “stay alive ‘til ‘95.” But you know what actually happened in the rest of the decade? We came back. By 2000, unemployment had dropped to 3.9%, subway ridership increased by more than a third and office vacancy was cut in half.
As we struggle to chart a course for New York, it was clearly a challenging moment. We ought to remember that we've been here before, and we've overcome. New York persevered after 9/11, we made it through the financial crisis and the recession that decimated our number one industry. Then a couple years later, we got through Superstorm Sandy. We bounced back.
And now we’ve turned the corner on COVID. Just look how far we've already come. In 2020, the unemployment rate was pushing 7% at the height of the pandemic. The subways were serving just 10% of our normal, 5 million-plus daily riders, and we were losing $200 million a week.
Today, unemployment is down to 3.6% and the MTA’s subways, buses, commuter railroads were roughly 60% of pre-COVID ridership, double where we were less than a year ago. Just last Thursday, we carried more than 5 million riders on subways and buses combined, which is the highest total since March 13, 2020. Starting to resemble something like progress.
I am relentlessly optimistic about New York, partly because of the amazing changes have taken place since I grew up here in the 1970’s. And that optimism got much worse when I spent a decade rebuilding the World Trade Center. We overcame the naysayers and turned Lower Manhattan into a much better version of New York, transforming old time Wall Street into what is a one-of-a-kind live/work community. Jessica Lappin who leads the Downtown Alliance is here, and it's just a different place, so we can do this. But more relevant today, I'm optimistic because I fundamentally don't buy the argument that hybrid work is a threat to New York City. Don't buy it. If you're a young, ambitious hybrid worker tapping away at home a couple days a week, you want New York more than ever. Whether you're focused on culture, nightlife, parks, restaurants, or social opportunities, Tinder assisted or not, you want the city right outside your door. And as long as the talent wants to be here, the employers will follow.
The New York City Partnership in the last couple of days released a new study. Anybody noticed that amidst all the data about hybrid work and the pace of return to office, the Partnership found that 40% of New York City employers project expanding their New York City workforce in the next couple of years, and only 8% expect to contract. Good sign. Further to the point, nobody likes that rents are going up, although I do see some of my friends from real estate cooing in the back. But doesn't the amazing comeback of our white-hot residential real estate market tell us that people want to live in New York? Recall, there was mass panic during the pandemic, when those stories appeared showing large numbers of people sending the post office return of address cards. Well, they're coming back, and others are following.
And when it comes to the business world, the most important indicators are strong. In 1993, we were really worried, all of us, about whether the city could diversify away from financial services. Remember that debate? Went on for a generation. Today the fastest growing, most dynamic part of our national economy, technology, is burgeoning in New York. The city's tech ecosystem has more than 9,000 startups valued at $150 billion, not to mention surging hiring and office leasing by industry giants like Google, Apple and Facebook. The economy is more resilient and more diversified than ever before.
The other thing that can’t help but make me optimistic about our future is the incredible alignment between Albany and City Hall. Governor Hochul and Mayor Adams are committed to working together, you see it every day, on the solutions to the big problems: economy, public safety, homelessness, and so on. Collaboration is going to be key to our recovery, and they're setting a great example.
But let's talk about where we are at the MTA. I mentioned that subway ridership is back to roughly 60% of the pre-COVID levels, buses remaining approximately 65% and commuter rails, interestingly—we thought people weren’t going to come back from the suburbs—commuter rails have actually caught up to the subways, they're also pushing 60% of pre-COVID ridership. The peak travel pattern has returned, though volumes are lower. I had standing room only on the train this morning. An interesting sign, I'll have to look whether service was interrupted, but that's to be followed. But what we're missing is not just commuters into the Central Business District, but especially three categories: intra-Manhattan trips, to a large extent people moving around to go to business meetings, sales calls, and so on. Tourists, especially inside Manhattan, and riders from affluent neighborhoods, white collar workforce, who has the highest remote work percentages.
Some of this missing ridership is going to come back with tourism. Some of it's going to come back with a continuing return of office workers and in-person meetings, especially if we effectively manage and address people's concerns about safety. That is a huge, major, major issue right now, we all know it. But we got to be realistic. Some of the changing travel patterns and shifts in economic activity are going to be permanent. So, we at the MTA are rethinking, beginning to rethink, how the system and our service needs to evolve in response. But remember, we did it before.
In the 1990’s, the MTA recognized as the economy diversified, and as jobs sprung out in new areas of the city, we needed to make it easy to transfer bus to subway, bus to bus and so on, and we needed to be able to offer a range of volume discounts and so the MetroCard was born and quickly accelerated the growth of ridership. It's clear that we're going to have to adjust the service model again now to meet new travel patterns, especially on nights and weekends, which have been pretty strong. We want those discretionary periods to be really appealing so that New Yorkers—that mass transit is New Yorkers first choice for getting around, even when the cost of an Uber to go from Midtown to the Village drops below 50 bucks…has that happened yet?
With fewer of today's commuters coming to the office five days a week, we're going to have to bring in new customers and encourage more transit use among existing customers. To be honest, pre-pandemic, it sometimes felt like the entire city was crowded onto the Lexington Avenue Line at eight in the morning and then again at six in the evening. So, attracting new riders, I think was not always the MTA’s top priority, that has changed.
Fortunately, our $52 billion 2020 to 2024 Capital Program, which was enacted just before the beginning of the pandemic, is in good shape financially, and it is positioned to help in growing ridership. It includes a range of major projects that bring new customers by connecting people in transit deserts and underserved communities and cutting their travel times in half. For example, the long-awaited East Harlem extension of the Second Avenue Subway, 100,000 riders projected, bring the whole Second Avenue Subway north of 300,000 riders. As many riders on that one line as the entire Philadelphia subway system.
Second, the Metro North Penn Access project. This is that project, in the Bronx, which uses the Amtrak line and turns it into a commuter railroad and provides stations and rail service for people in Co-op City, Parkchester and two other stations – areas that have been totally isolated from real mass transit.
And also, Governor Hochul’s Interborough Express project, which will connect Brooklyn and Queens directly, dealing with the new paths of travel and the growth of jobs in those two boroughs, and also connecting to 17 subway lines along the way and dealing with major transit deserts in the heart of Brooklyn and the heart of Queens.
Also important, our long overdue push to have systemwide ADA accessibility. That's going to allow not only disabled folks but also seniors, people with scooters, parents with strollers, and customers toting e-scooters and bikes, to make last mile connections – whether they're at the at the origin end and or in the city.
But perhaps the best available tool to grow mass transit usage is to increase and improve bus service so that riding is actually faster than walking – what a thought. Buses obviously require less construction upfront, they are nimbler, and the bus network is already fully accessible. And we can dramatically increase speeds with bus lanes and bus camera enforcement, if we're willing to bite the bullet and actually implement those things. We can do it fast.
Right now, we're modernizing the route maps with borough-by-borough bus network redesigns. Staten Island is done, implemented. Our Bronx plan is approved by all the political authorities and it's going live in June. And in Queens, which is the most bus dependent borough because of history, it's got 2.2 million people, but relatively limited subway service. We've got a new plan on the table and a really comprehensive outreach and community dialogue process is already underway. We're changing the route structure. That is going to make – and it's the one of the core principles of those changes in route structure – is to connect people to the subways and to much faster transit than they have right now, growing ridership.
Also keep in mind that all of these steps, encouraging New Yorkers to use mass transit, will be happening with help from congestion pricing, which is coming to Gotham in 2023. We're on it. Wind at our backs, congestion pricing will be, for growing ridership. While congestion pricing is often talked about as a way to provide capital dollars to the MTA – and that's the financial side – remember it's fundamentally about getting people out of their cars and onto mass transit. So we're going to be ready for that increased ridership as well.
You may or may not trust my crystal ball. But the MTA – I’m telling you – we’re going to be bold and we're going to take the initiative to address the new realities that we and the region are facing. But I have to be clear, the biggest adjustment that needs to happen isn't in the control of the MTA. While we focus on executing our own plans, some of which I've talked about, we also need Albany budgeteers and decisionmakers to reconsider how we fund mass transit. For a long time, we were dependent on riders to make up half or more of our budget. The MTA actually is an outlier in this respect.
With among the highest farebox recovery ratios nationwide, our peers tend to be lower, and the national average is something like 30%. Self-financing through the farebox was once considered a good thing. Business-like. But COVID has shown us that mass transit isn't a luxury that needs to be user funded. It's actually an essential service, like police, fire and sanitation. When we were in the middle of the pandemic, we ran full service, no matter how few people there were, because that is essential and we needed those people to get to work, to get to groceries, to get to pharmacies, to be able to move New York. It's essential. And public transportation is the one thing New York can't live without, because of our density, double Chicago and Boston’s, and eight or nine times the Sunbelt cities like Houston or Phoenix. New York simply doesn't work without great mass transit. Doesn’t work.
Not to mention that mass transit is the great equalizer, the engine of social and economic equity. It gives low income and working-class New Yorkers access to jobs and education and everything New York has to offer, and at a price, much more affordable than the $10,000 a year plus it costs to own an automobile. But we're going to need solutions from Albany to keep the MTA afloat once the federal COVID relief money that Cory mentioned, once it runs out in a couple of years.
The MTA is facing a projected $2 billion plus annual operating budget deficit, brought on by the drop in fare revenue. It makes no sense to force our MTA board to utilize the few last resort tools that it has available, and those are fare hikes, service cuts or layoffs, to close that magnitude of funding gap. It is just not accomplishable. We cannot get there. And moreover, those strategies actually limit access to transit at the moment when we're all trying to expand access.
This year's legislative session isn't over and there remains a ton of important issues still to be dealt with and to be resolved. But now is the time to start serious thinking and discussion about how to begin, about how to stave off the MTA’s looming deficit. We at the MTA are ready to step up and work with anybody and everybody to make sure that our indispensable mass transit system survives this crisis and that we are there to power the region's economy, our revival, and to help bring about a more inclusive New York and a more climate friendly New York, for decades to come.
Governor Hochul and Mayor Adams have demonstrated strong commitment to robust and expanding mass transit. But under their leadership, we now need to build a really strong, across the board consensus, in favor of recurring revenues, new recurring revenues to pay for it. So, no question, we're facing challenges right now. But I am really confident that the MTA and New York are going to bounce back yet again. And I look forward to working with all of you, this civic community, to make sure that's what happens. Thank you.
Cory Schouten, Editor-in-Chief Crain's New York Business: Fantastic summary. Thank you. Sets the stage perfectly for our conversation today. You all are working on new riders and we’re working on new readers. We have a lot of notes to compare on that. Looking forward to that. I did want to ask you one quick follow up to your remarks.
I thought it was interesting that you said that hybrid work is not a threat. We have heard a different message from a lot of folks in the business community, particularly the real estate space that it is a threat to the city. Talk about how you’re handling your own workforce in terms of hybrid work and how you imagine the city’s other industries can evolve.
MTA Chair and CEO Janno Lieber: Well, thank you for the question. 90% of the MTA workforce is the definition of essential workers, right? They have to be there in person to run the system, to maintain the system. It’s a very, in-person job and we celebrate them for what they are doing but also what they did in the tough times of Covid when we didn’t really understand transmittal and the science of transmittal, they showed up every day and it was heroic, so we always celebrate that. We have a much smaller white-collar workforce and office space workforce, and we went through all the normal cycles with folks. But in the end, like the city of New York, we elected to bring them back. I believe actually, my own personal experience is, in-person does matter, and we had such great attrition and change in our staff that we wanted to reestablish the connections, but we are also looking at implementing a limited telework system that will be very closely connected to the management. I’ve tried to push more regular evaluations and goal setting and so on just basic managerial stuff. We want to connect it to that but then we’ll start looking at a slow adoption of a limited hybrid work model.
Schouten: Do you expect that that will work for others as well? Do you recommend it?
Lieber: Every company is struggling with this. This is all a work in progress. We’ve got a lot of business people here and worrying about managing it and think about it every day. The one thing I would say that made an impression on me is, I have a lot of friends in the tech community and it’s interesting to me that the technology world, which is where we’d all think there would be the deepest, widest acceptance of remote work, is actually, a lot of those companies are very committed to in-person. I know that Google said you can work at any office in the United States, but you have to be in-person a fair amount of time. So, I believe that in-person matters. I think we’re all recognizing that there’s going to be some version of hybrid and we’re trying to plan our mass transit to adapt to that.
Schouten: You mention that you’ve been riding for years. Do you remember your first time on the train and what was your home station?
Lieber: I grew up on the West Side, not far from here. So I was a kid, my brother and I starting when we were seven and six, rode the bus to school, and that was a big part of our lives. We’d transfer and have all kinds of opinions about bus service that landed me where I am. So it was the 79th and Broadway stop. My parents never lived more than a block or so from a subway stop. So, we were always a mass transit family.
Schouten: And what was it like riding then?
Lieber: One of the things that I always think about is that we really looked up to bus drivers. They were figures of authority. They were people who kind of kept us in line as kids. There’s a little bit of a spate of our workforce getting attacked. It’s one of things we’re trying to do in Albany is to frankly make sure you can’t attack an MTA worker and then get a ticket like you smoked in the system and had far evasion, that it’s actually treated as an assault. So that troubles me. Whenever bus drivers are attacked, unfortunately it happens regularly, I actually call them and talk to them, just because I think those are folks that we have to protect and value. They’re really important figures because they’re so many folks and they’re part of the community. They’re really face to face with people.
Schouten: What kinds of things are they hearing? What are the reports?
Lieber: Well, I think people are worried about, there’s no question we’re all experiencing in the public space that Covid has led to kind of a lot of troubling behavior in the public space. There are clearly more folks struggling with mental health issues in the public space. I always say we need to care for those people. But it also because of New York’s density the public space has to be comfortable and safe and welcoming. So, we owe it to everybody to make sure we’re caring for those people but we’re establishing that the public space has to be protected because we depend on it because of our density so much. When you’re in a small space like a subway or a bus, somebody breaking the rules, acting out, smoking, drug use, all that stuff that doesn’t feel as threatening in an open area where you can move away from it feels threatening so we’re trying to represent the rider’s point of view which is they want to feel safe and not at risk in the public space.
Schouten: I think it’s interesting that you mention from the MTA employee’s point of view there was a respect level when you first started riding public transit. From a rider’s perspective you rode then, you ride now. How is that experience different? How is it better and how is it worse?
Lieber: My staff will attest to the fact that I have some old New York 1970’s habits that die hard. Which is, don’t get off a train that is moving generally in the right direction to hope another is going to come. MTA service is a hell of a lot better than when we were kids, and we all know the environment is very much improved. But listen, service is great. Everybody who rode during the pandemic saw it was like clockwork. We had three-minute headways that you really could count on. Obviously, as we come back, we had some problems with crew shortages which meant that sometimes we had to cancel some runs because we had so much attrition in all those years that we didn’t hire anybody because we didn’t know if we have the money. We had crew shortages. That impacted on service. We’re starting to get service back. Service is better than it was pre-pandemic right now, and we’re attacking some of the physical issues in the capital program that actually hurt service so signaling and many other issues. Those are going to make a difference in the quality of service as well.
Schouten: One thing that’s been very consistent thorough all of those years is funding has always come up short. We had a pre-call where we talked about what are the solutions? It’s pretty clear that reduced service, laying off workers. Those solutions are really non-starters. So, what else is there?
Lieber: The MTA, we have to be agnostic about the political authorities. Elected officials in Albany have to decide how they want to do this. May I just say, as a precedent, to get where we are with this amazing $52 billion capital program the legislature came up with a couple of new revenue sources: the internet sales tax, the mansion tax, and congestion pricing. That’s a huge piece of our existing capital program. All of those were good policy. They weren’t just additional taxes that made New York less attractive so I believe it’s not our job to say do this one, don’t do that one, but I do believe that when folks put their heads together, just like they did with the capital program which was a product of a lot of thoughtful study, that there are ways to fund the MTA and solve the financial crisis that don’t necessarily become a negative burden and a drag on the economy.
Schouten: How much is spoken for of that $52 billion?
Lieber: In what sense?
Schouten: How much is allocated already and what’s next?
Lieber: Every damn dollar. There will be projects that for whatever reason because it’s dependent on some other agency doing some work. There’ll be other projects which for whatever reason conditions change and you say I don’t want to do that project in this capital program, I’m going to do it in the next one. There are adjustments at the margins. The categories of work are really set. The overwhelming majority of our capital program is state of good repair just keeping this hundred year plus system from falling apart and making sure that we get closer to that mythical goal of having a transit system that’s in a state of good repair by standards that it doesn’t fall apart. But then there are these expansion projects and I mentioned some of them. There’s this huge push to have new, modern signals so we can run more trains on the Queens Boulevard line. Run more trains on the 6th Avenue line and so on and so on. There’s ADA accessibility. We’ve got $5 billion to finally get elevators going in many, many more subway stations because that is a huge constraint on people’s ability to use the system. We’re one of the few places that doesn’t have true accessibility. So, the dollars are spoken for, and we are getting it all done.
Schouten: And if you add another $50 billion how would you spend it?
Lieber: I need 15 minutes to think about that. We have, you know listen, the Governor’s Interborough Express project is not funded in the current capital program. We're doing the environmental review now and be funded in the future. Hey, anybody noticed that we're trying to, Governor Hochul has said, “I want to be the one who finally fixes existing Penn Station." Moynihan is great, especially for Amtrak. State of New York paid for it. But can we please fix Penn Station? There are a lot of important projects that are waiting to be funded in the next program.
Schouten: I think I'm just going to throw my cards out here because we're just going to jump around. I have to ask about Penn Station. Do you think that the approach for New York to fund it on the back of private development is wise? New Jersey's not doing that.
Lieber: Yeah, well listen, I'm in, my first priority, the MTA, is existing Penn Station because that's where half a million New Yorkers, subway and Long Island Rail Road customers suffer every day. Right? The expansion which is part of Gateway. Gateway, is a huge and important project, needs to happen. It will mostly strengthen the connections across the Hudson River, right. It's about new tunnels and the expanded track and platform capacity, so more New Jersey Transit trains, more Amtrak trains can come across the Hudson River, and it's great and it is a priority. But as the MTA I have to focus on how do we fix existing Penn Station to make it more humane. We have, Penn Station is especially tough right now because we're in the middle of a project that is going to really double the width of that Seventh Avenue to Eighth Avenue corridor that is so much a big piece of Long Island Rail Road and subway experience. When that opens at the end of this year that's going to be a real change. We have a new entrance on Seventh Avenue. But now we need to blow out the rest of that existing facility and make it more like Moynihan or Grand Central. A place where you can see where all the entries are, places intuitively navigable, where there's light coming in, which is understandable to a business and to a traveler arriving there for the first time, which existing Penn is not. I mean, as I always say everybody scrunches in that one spot looking up at the board like they're waiting for Moses to come down from Mount Saini with the tablets. It's, it's a terrible place. And the governor to her credit said I want to do Gateway. I want to do many, many projects, but her first mega project priority was fix existing Penn Station now. We have a vision where if you just cut out half of the upper level of Amtrak, of the Amtrak level, you can make it a much more open space. That's what they did in Moynihan. That great hall with the skylight. That was because they took out a floor. We want to do the same thing and existing Penn, make it like Moynihan, make it like Grand Central.
Schouten: And in terms of the funding scheme though, there's a report this week that says that taxpayers would be on the hook, similar to Hudson Yards. What's your view on that?
Lieber: I think what the Governor is doing is responsible, which is saying we need to fix the transportation facility, but we also need to plan for the future, and think about how to have a modern, post congestion pricing, climate change friendly land use pattern. And in that environment sticking office buildings, modern office buildings next to the best mass transit connection. This is the biggest mass transit connection in New York. That does make sense. It's not a kooky idea. It's been proved out with Midtown, that the Midtown, the East Midtown rezoning, that was the concept. We're going improve the transit and we're going to try to encourage modern development around our best mass transit hub, Grand Central, just like Penn Station. We did the same thing at the World Trade Center. So, I don't think that is a radical or disruptive idea. It's just good planning. Penn Station, there's a billion dollars that the state has already allocated for fixing existing Penn. If we had some revenues, we don't need it, we don't need it all tomorrow from new development, which will take time to unfold, plus some of this new federal money for the Northeast Corridor, which is huge, billions of dollars in the Biden bill for infrastructure on the Northeast Corridor. We could get Penn Station going. The reason I'm pushing this is when we open East Side Access another big drama, but by the end of this year, East Side Access that long awaited much maligned project is actually going to open. There will be a Long Island Rail Road station in the basement of Grand Central. Nobody's seen it, but it's there. It is there.
Schouten: You've seen it?
Lieber: I've seen it a lot. But once we open that, half of the Long Island Rail Road customers move out of Penn. That is an opportunity to do real construction in that demoralizing, antiquated facility. When you have, when you can all of a sudden stage construction and fix Penn. So that's why Governor Hochul and I supported a lot, is pushing let's get existing Penn under construction as soon as possible, because that window of opportunity starts to close when we successfully bring Metro-North service into Penn in about five years.
Schouten: It's a beautiful day, so I don't want to linger on Penn too long. So last question. Madison Square Garden. It's got to go. What's your view?
Lieber: The city is deciding the special permit. Our role in thinking about Penn is how do we come up with a plan that is, that doesn't depend on the Garden moving. So, the work that I'm talking about fixing existing Penn, making it a humane place with intuitive navigation, light and sight lines and all that space for human beings to move around, does not depend on the Garden moving. If the City through the special permit process or otherwise does get the Garden to move, process that will take 10 years if we are realistic. This plan can definitely accommodate it and dovetail into that, but there's no reason to wait when we have that window for construction right after East Side Access opening.
Schouten: Great. Transitioning a bit here. So, we've reported pretty extensively about how New York is becoming more of a car city. You referenced it in your opening remarks. What is the strategy for winning those folks back?
Lieber: I think congestion pricing might help. From $9 to you know, somewhere between $9 and $20 bucks a day. That's the number depending on a lot of issues that are going to be resolved by the Traffic Mobility Board yet to be impaneled. So cost is going to be part of it. Listen, we're having a terrible problem in New York of competing for curb space, right. So, what do we need to prioritize? Emergency vehicles, police vehicles, paratransit. People who can't use mass transit but need Access-A-Ride or For Hire Vehicles. Buses. Buses. So, in my view, and I think it's part of the idea of congestion pricing is we need to deprioritize single occupancy automobiles for the use of the curb and the use of our roadways. That's a good thing. So, I think if that policy is implemented systematically, and we really have bus lanes, and are discouraging people from blocking the bus lanes, and otherwise limiting the curb use by single, private parking and automobiles, I think it's going to move people back to mass transit and provide better mass transit service as part of the equation. That's what we got to do.
Schouten: So, digging into the numbers a little bit, I've seen a broad range of what is, what does it cost, what is the toll on a single occupancy vehicle? $9 to $23. Where is that likely to land?
Lieber: The issue is I mean, I think you get it, is that when that Traffic Mobility Review Board is impaneled, they have to take up all of the arguments for discounts and exemptions, and there are a lot of groups and people who have you know, who say I should have a discount. I shouldn't have to pay this. Totally respect all those views. That is what they're going to have to sort through. You give more discounts and exemptions, the base fee ends up being much higher. That's really the issue
Schouten: And on the other side of it in terms of what it generates for MTA. It's roughly a billion a year and then you can bond?
Lieber: That's the statute. The statute the Legislature enacted was you need to set up a plan that has the outcome of generating a billion dollars of revenue for the MTA year, which allows you then to bond it to fill the 15 billion in our capital program it’s meant to cover.
Schouten: Okay, so it's for capital not your structural deficit?
Lieber: This was enacted in order to pay for all that good stuff we're talking about. ADA accessibility, re-signaling and all the big projects, the capital program. It's not to fill the operating budget deficit that I talked about.
Schouten: OK. A question about safety. What do you think the line is between perception and reality of safety on the subway?
Lieber: I don't know if I'm going to enter the matrix with you on that one. Listen, the bottom line is, all I know is right now people have a reason to be uncomfortable. There have been these high-profile incidents which are heartbreaking, and sort of violate the whole sense of this is a shared space that you can move through feeling comfortably. I mean, what happened in Sunset Park. What happened on that Time Square platform to Michelle Alyssa Go, that was, you know, nobody can forget that. So right now, it also, in part speaks to fear that has been brought on by a lot of people who are in the public space and who are having these you know, mental health issues and so on. So, my job is to deal with the reality and I really do believe perception. New Yorkers are smart, they accept that this is public space and there’s stuff that goes on. They put up with a lot in the public space, especially in the subway. If we start to move the numbers, they will react, the perception will move, I believe.
Let me tell you what's going on now though, there is change going on. I just want to talk about two things that happened, Cory, in the last couple of days. Saturday nights, I wouldn't say mayhem, but those are the nights when those things that you see in the NYPD list of what happened in the subway, we get those daily, the numbers go up, right, Saturday night.
Saturday night, there were seven things that came to me. Five of them were cops in the subway interdicting crime. One case, somebody, they recognized from one of our camera shots, that's one of those things those cameras do is, I have photos for the cops to see perpetrators, who they then look for. They got somebody who they had seen who was a prior violator. They interdicted somebody had assaulted someone on the train. The cops were on the platform. They got the guy. There were literally five of those. One of them was an intervention of somebody who was obviously on drugs and had to have [Narcan] and their life was saved.
And then it happened again last night, same pattern, all over the city. Hoyt-Schermerhorn in Brooklyn. Downtown. 42nd St Bus Terminal. Having cops on trains and platforms is starting to make a difference. I can see it in what we're hearing about every day that goes on in the system. That's what we were asking for. Honestly, in the prior administration, Mayor Adams a transit cop, is passionate about subway safety and just last night, I gotta tell you there was a shooting of a cop last night and you know the guy who did it? The guy who did it was out for, he had warrants for recidivist fare evasion. They picked him up for fare evasion, this is a while ago, he had a gun, he was waiting to be sentenced for the gun. And then this episode happened last night, where he shot a cop. So the connection between having presence and enforcement of the rules of conduct, we're not interested in criminalizing anything, but the rules of conduct are what makes people feel safe in the system and it also allows cops to pick up a lot of people who would do bad stuff, who are coming into the system with loaded weapons and so on. And what happened in this one episode, guy with a gun waiting to be sentenced, now he shoots a cop, proves it out.
Schouten: Are there other resources that you're not getting from the city, the business community or riders that would help with safety?
Lieber: Listen, I don't think so. I think that it's going take a while. I don't want to mislead folks that we're going to change this, you know, a little bit of sense of disorder that's crept into our public space and, and some of the behaviors that are making people uncomfortable overnight. But, you know, I got to say, we all have our personal opinions about what rules do and don't matter, right. Oh, he was just smoking down the end of the platform. Oh, he wasn't bothering anybody, he just went there to use drugs. Whatever it is. The fact that the cops are now in the system, on trains, on platforms, not just how many collars they're making, but their visible presence is the one thing that our riders tell us, makes them feel safe. To see a uniform NYPD officer makes them feel safe and I really appreciate the mayor and the police commissioner and the entire force for what they're doing to turn this around.
Schouten: I have a reader question here that's probably going to, this is obviously a New Yorker, do you genuinely plan on fixing the subway? Many previous CEOs of the MTA have said such things?
Lieber: No, I secretly plan to let it go to hell and I admit it. I'm sorry, unless you’d asked, I wouldn't have admitted it.
Listen, you know, how do we fix the subway? What do we, we’re talking about the investment in the physical plan in the capital program.
How do we run better service? We deal with the antiquated portions of our system that break down more quickly. We do a better job in maintenance. We schedule better and that's what the bus redesign is all about. We expand access to the system. That's what many of these new projects that I'm talking about. So that people in transit deserts and underserved communities, especially which tend to be low income in New York, have more service. We plan to improve it but the one thing that I wrestle with, with the question is, you know, I don't buy the idea that the system is, you know, is completely broken. The premise that when you're providing the kind of service that we are for three and a half million people a day on the subways and 5 million, if you include buses, I think the system is functioning, but it needs to be much better and it needs to be much broader, and it needs to be much safer.
Schouten: I want to want to come back around to a reference to what you mentioned earlier. So, you led the rebuilding efforts at the World Trade Center site. So I have a couple of questions around the return to office and hybrid work. I know that you're working on a couple of things. I'm curious about the new version of a weekly pass the 13th ride free how is that going? Is the is the adoption rate strong?
Lieber: Great, hundreds of thousands of people have hit the Lucky 13. That’s when you tap OMNY 12 times, after that, every ride the rest of the week is free. What that does is, just like EZ Pass and MetroCard kind of broke down the complexity of fare payment and just made it much smoother and in so doing encouraged people to use the system. By not forcing people to struggle to figure out which fare product to choose, you’re giving them the assurance they can just tap and they will get the best deal. It also deals with an equity issue which is some people walk up to the MetroCard vending machine at the beginning of the week and say, I don't know if I have 35 bucks, you know, what is it $33 to buy a weekly so you just tap and go with confidence that you're going to get the best deal. The algorithm is going to give you the best deal, that’s an encouragement and it was part of the success of the growing ridership in the 90s and 2000s. It’s already starting to take hold. People like it.
Schouten: Can you give the quick backstory for how that came together? Was that someone’s idea?
Lieber: What happened is, first of all, OMNY is interesting because we put it into effect before we really finished the whole software so there are some additional discounts and benefits, functionalities that are coming into being as we finish this and start to make the transition. But the point was, we said, we need to get riders back, we need discounts, we need promotions. We’re in the “hey, there’s a sale” business. And then we started focusing on how do we do that, right? OMNY, the automatic weekly was one thing, but we also did discounts on monthlies for the commuter riders. We did a new 20 ride discount for the new hybrid worker who might be, you know, coming into the office one to three days a week instead of five.
And we, importantly, and this is an equity issue I feel strongly about, we dramatically discounted the rides on the commuter railroads inside the city because we have some space on the commuter railroads and we want people who live in Southeast Queens who might have a much longer trip on a subway to take the train from Jamaica to Penn and to have a much faster ride, or Woodlawn in the Bronx to Grand Central. So, trying to give people, you know, faster commutes at a cheaper price, taking advantage of the room on the commuter rail system.
Andrew Albert, who is a member of our Board who is sitting in the back there, really pushed this. This is the idea that some people call City Ticket, in trying to get New York City people to get more benefits from the commuter rail system. Thank you, Andrew. Thank you, Jerry Bringmann, who also pushes for that.
Schouten: In the same vein of questioning, I'm curious about the timing of commutes and the day parts, I mean, hybrid work, it tends to be Mondays and Fridays or less maybe …
Leiber: No kidding
Schouten: Are you adding, are you adjusting schedules?
Lieber: No, no, we're starting to look at that. The ridership. The peak is back. As I said let's lower volumes but the peaking that was our pattern of travel is back so people are coming to work in time of day, the more regular pattern. The shoulders are a little longer. Part of it is a mix of riders or office workers means that a large proportion of students may go earlier, and essential workers and so on. But the peak is back. But there's no question that Tuesday through Thursday have become the very strong days in ridership, and Monday and Friday less so. So what we're going to look at is, does that mean adjustment service?
I don't know that we would adjust peak service, but I'm especially interested in strengthening the appeal of discretionary travel periods like weekends and night times and we’re spending some time looking at that. Rich Davey, great new head of New York City Transit. Great guy, ran the Boston MBTA system, was the Secretary of Transportation for Deval Patrick in Massachusetts. He is really starting to dig in on how we might adjust nights and weekends to make it a little more appealing.
Schouten: You worked for Mayor Koch as you mentioned and have interacted with every mayor since. Curious how Mayor Adams stands up and if he has any surprising ideas for transit you've talked about?
Lieber: You know, I feel very, right now I said the MTA, all of us, feel fortunate to have a mayor who's an ex-transit cop, who is passionate about the role of transit, the importance of safety in transit and who's willing to put his money where his mouth is. It's starting to pay off, he's been a great partner. We work with them every day, you know, it's a really, really strong collaboration that has developed since the new mayor came in.
Schouten: You come from the capital side, so curious what will it take to bring down MTA’s cost per mile for new construction.
Lieber: Okay, so this is an important point, and we're going to start to do this a little more detail publicly, but Jamie Torres-Springer, who used to be the Commissioner of the City’s DDC, and who came over to take over from me at MTA Construction & Development has done a really, a fantastic deep dive on what drives costs. Number one, cost per mile. Frequently people are citing projects that are totally different. A light rail project that adds 50,000 riders a day is being compared to 300,000 riders on totally different technology: rubber wheel, light rail project, three cars, right? So, we have to use metrics that really allow you to evaluate. We are expensive on a cost per mile basis, there are a lot of reasons for that. We are cheap on a per-rider basis. Let’s not totally lose perspective. There are some specific issues that drive our costs. Union labor in New York is very expensive compared to even other, you know, modern American cities. I love our unionized workers, but cost structure on a lot of things in New York is higher. But the principal thing that makes us expensive, it's a little technical, is because we run trains with 1,000 people on them, we have to build stations at a size that allows you to egress them very quickly in these emergency scenarios. This is code, it's a little technical, but you need a lot bigger stations, a lot more vertical circulation, a lot more ventilation, and all that. Stations is where we get expensive in these new lines, it's not the tunneling, which we're pretty on par with other standards. So, we'll make some more detail on this public in the future, but as we dug in, there is more explanation now. Can we bring the prices down? Absolutely. That is what I started to do when I was at MTA C&D, change the contract, so there aren't these ridiculous risks allocated to the contractor that they charge you a premium for, run the projects differently. Use design-build so the contract, you don't have 50 contracts running into each other, which is what happened on East Side Access. There are many things that we've already done. Bids are coming in 15% below estimate in the new capital program so far. We're not out of the woods, but it's a positive sign.
Schouten: So, what is, where do things stand in terms of the next phase of Second Avenue? You're in property acquisition stage? Where are we?
Lieber: Definitely property. Property acquisition has to be done because it is the one thing – Zoe Davidson who used to work at MTA Construction & Development but has now gone on to the dark side working for a contractor, who is in the back. Property acquisitions delay projects in New York especially because the condemnation process, the property acquisition process, ends up delaying projects. You’ve got to do it fast before you're ready to start the project. So we are doing that. But the thing that we're doing is we're waiting for USDOT after the project sitting, the application sitting for four years during the Trump administration, we’re waiting for USDOT to give the thumbs up to the 50% grant that will make this project go. That is the linchpin. We have all the designs ready. We're going through it with all the USDOT staff to make sure that they will say yes, and that's where we are. We hope it's by the end of the year, but still a work in progress.
Schouten: So, I have a reader question here. When will we see the R211 cars in service? Now these look really cool. I had to look them up: retractable seats, LED lights, Wi-Fi.
Lieber: Yes, they're fantastic, and they're new. So, we need new subway cars are, you know, what happens is that, you know, subway cars eventually stop performing as well. They start to break down more frequently, even with regular overalls is better for the customers and for the system we have new cars. Right now, we're in the middle of that procurement. Frankly Kawasaki’s got the usual COVID-related supply chain issues, you know, delays blah, blah, blah, blah. We're trying to work through with the customers, but we have piloted some of those cars already in the system, and they're going to start to come in the next couple of years. It's not going to solve the whole, you know, if you're like me, you are on the train where you still have the old [R]46s with the orange and yellow seats, you may see those a little bit longer. But we do need to buy a lot more rolling stock. It is a challenge because we have fewer companies than there used to be. Some of them are in New York, and they're good companies, but a lot of the world was buying rail cars from China, and we have, the United States, has made a decision not to do that for lots of reasons coming from Washington. And so, we don't have that many manufacturers to choose from, it is one of the challenges that the industry faces.
Schouten: Cool. I wanted to, we have time for just a couple of more questions here, so we'll wrap it up pretty quickly here, but I wanted to talk about the labor market as well. You mentioned it's been harder to find crews. Can you talk about some of the things that you've done to staff some of these routes?
Lieber: Okay, well, you know, that term, the great resignation and so on, that wasn't really what happened to the MTA. What happened to the MTA was, we were, you know, because of the financial crisis that brought on by COVID, we didn't hire anybody – actually started a little before COVID – we didn't hire anybody for a couple of years. And rates of attrition of people because of pensions and otherwise are pretty constant, they're relentless, and we ended up with a real shortage of workers. That is where we ended up at the end of COVID and especially in these what we call service sensitive positions: bus drivers, train operators, train conductors. So, we had a crash program to hire them, and the complexities of course, the training. It takes, you know, eight or nine months to train a train operator, so we had to get a lot more trainers, we had to get more training facilities, we compressed the training. And then we did things to create incentives for people, existing operators, to not take vacation. We brought back retirees, and we attacked the problem. The fellows who were running transit, at that time, did a great job, Demetrius Crichlow who runs subways and Craig Cipriano, who was acting head of New York City Transit, did a great job in attacking that, and now we're not quite there, but we're within probably a quarter of being fully staffed to make sure we can provide all the service that’s scheduled.
Schouten: And I’ll ask a quick final question here. So, part of this is, is you know, there's lots of fundamental work that has to be done, but also, it's a little bit of a connecting with riders again, right? I saw that there was a train that was stalled recently, and you navigated your way to join them and wait with them. Talk about that part of the job and that part of the challenge, creating that, that sort of emotional connection and, you know, sense of safety and reliability with riders.
Lieber: Look, I don't think the riders are looking to emotionally connect with me.
(Laughter)
Honestly Cory, you're very thoughtful to ask that. They're looking to emotionally connect with the people at home that they're going to, or unemotionally connect with their employer in many cases. Look, I mean listen, the subway system is in New York's heart. The mass transit system is in New York’s heart. People are passionate about it even when they're kvetching about it, that is also representative of how much we care about this. And, you know, the emotional connection for me, it's a practical issue, but the emotional connection for me with the subway system is I believe in it in part, because I think of it as the way that New York proves out the principles of tolerance and diversity. The fact that we cram all these people into a small space of all different kinds of backgrounds and expectations and behavior standards, and they all get along basically is, is kind of proof of New York. Now mind you, they don't want to listen to each other's religious sermons, they mostly want to be on their phones, some of us still read hard newspapers. But it is kind of the New Yorkiest thing. We share the public space intensely and that is a kind of community and proof of who we are and how we get along that I think is, you know, a little bit bigger than just the practicality of mass transit. So, it's part of what I think of as the civic or emotional side of what we're all doing at the MTA.