Monday, October 8, 2012

The ferry price paradox

I recently found myself near Manhattan in Jersey City and Hoboken. Besides enjoying the view of Manhattan, I noticed the great pieces of infrastructure known as the ferry terminals, which offered very quick (and wonderfully scenic) trips to Manhattan.

Everybody loves ferries. They're fun. They're not claustrophobic. They are quick and can be very direct (no trudging up and down stairs in large stations). The fresh air, the smell of the breeze....it's the most refined way to cross a body of water.

Problem is, they're not as popular as they should be, and the reason for that is price.

If you find yourself near Exchange Place, trying to get across the water, you have two choices, PATH or the ferry.
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Look how close you are (that blank wall on the left is the ticket sales area)
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Isn't the view great?
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Why would anyone want to commute underground in an uncomfortable and cramped train when the open skies beckon?

Frequency isn't the issue....
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Price is.

PATH costs you $2.25 to get across. The ferry is $6. $8 if you're going ever so slightly further to Wall Street.

For a one time trip, that's fine, but for a daily commute? Even I would find myself on PATH with these prices. 

The story is worse over at the Hoboken terminal, which is a short light rail trip north.

PATH is the same: $2.25
New Jersey Transit: $5
Ferry: $8

The paradox I refer to in my title is that ferries should be cheaper because they're so much cheaper to build. How much does it cost to build train tunnels under the Hudson? Something like.... $9 billion. How much does it cost to build a ferry terminals? Pennies in comparison. The docks in both Jersey City and Hoboken are elaborate, but even the fanciest ferry terminal is just competing with above-ground train stations in terms of cost. 

Hoboken Train Station isn't cheap
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The ferry terminal is similar in fanciness

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The tunnels are a whole other ball game. And if cost cutting is of the utmost importance, a few logs and planks can give you a working ferry dock for under $10k. Meanwhile, the entire ferry route is free as it's just water. Not free in the way buses get roads for "free"  but actually free. No start up costs, no maintenance costs, no worries.


So why is it that ferry customers must pay so much? The answer is that PATH and NJTransit riders aren't paying for the infrastructure. (Of course, they're not even fully paying for the operations.) That's not a bad thing, as the social benefits of working transit are so great that subsidies make absolute sense.

What doesn't make sense is penalizing ferries, because their operating costs are higher than trains. If the ferry agency got a $9 billion lump sum investment like the train agencies get, they could buy all the boats they need and run $2 trips for a very, very, very long time (using the $9b to pay gas and wages)....much longer than than the train agency could. In fact, with $9b, the train agency wouldn't be able to run a single train, as they'd have spent it all on tunnels.

And that bothers me. It doesn't make sense to handle operating costs and capital costs in such a different matter. Shouldn't the total expenditure be what is important?

Add up 100 years of train infrastructure and operating costs
Then add up 100 years of ferry infrastructure and operating costs.

Finally, set prices based off these costs. I would take a bet that the ferry would end up with a much lower fare. Add in the value the ferry gives the rider in terms of quality of life measures and you've got no competition.

So tell me again, why are ferries which are so cheap to build, so expensive to ride? 

7 comments:

  1. I'd argue it's precisely because of 1) the disconnect between capital cost and operation cost, and 2) because of their unusual nature.

    A great deal of federal and state money goes to capital programs building new rail lines, new freeways, etc., but that pot of money is separate and distinct from the operating money. Operating money is expressly excluded from most federal transit programs and grants and I imagine the same is true for state monies. A rail project isn't expected to pay off its $9 billion tunnel because it can't even pay for itself. A ferry is no different.

    Buses, too, are cheap, but they're more expensive to operate than rail lines. Often, they're cheap because they're sometimes sold or leveraged as social programs for the poor. If you charge $5 for a bus ride and $2 for a train trip, you're more accurately reflecting the modes' true costs, but you'd be seen as soaking the poor to pay for the rich. A ferry, as an unusual mode of transportation, doesn't win on the social equity front. Folks would say, they're on the water, where the rich people live; why should we subsidize rich peoples' transportation?

    At least, that's what I think. I'd love to see ferries competitively priced, but I'd also like to see driving competitively priced. Maybe another time.

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    1. That disconnect is the problem though. It shouldn't be coded that capital costs are ok and operating costs are the big question.

      While ferries are "unusual" they do help promote transit by being comfortable, and also take stress off PATH and NJTransit.

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    2. Definitely. Fixing that will be difficult, not just to formulate a new cost structure (target X% of 30-year per-rider cost?) but to get it implemented.

      In some places, the premium doesn't matter. Ferries are actually overcrowded in Marin County despite a cost and even a time premium because Marinites can afford it and want the nicer ride. As PATH and NJT get to be more crowded, I suspect people will take the ferry more.

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    3. You reminded me of another issue, the chicken and egg one. Ferries are "unusual" because we all know they will have high fares, higher than most areas would be able to sustain. If fares were competitive, you might see ferry service sprout up in many new places.

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    4. I presume they expect a certain level of performance from their $9-billion (inflated though that is), and it seems questionable whether ferries could deliver it...

      A single large ferry can carry about the same number of passengers as a single subway train, but suffers from a number of disadvantages:

      * They're very slow, and docking is time-consuming. In the case of a river ferry, the distance is small so the top-speed is less important, but that also magnifies the effect of the time spent docking, transfers, etc.

      * They necessarily require a transfer on both ends; subway/ferry interlining isn't possible quite yet! :] Given the river-side location, transfers are likely to be more involved than inter-subway-line transfers (because it's harder to get the subway close to the ferry).

      * The number of boats you can run to gain throughput is probably much more limited than a subway because it's a less controlled environment and there's competition with other water traffic. With good signaling, subways can run with 90-120sec headways, which seems very unlikely with large ferries on a busy river!

      * Weather's a bigger issue. Subways aren't effected very much except in weather so inclement that everything else shuts down anyway.

      I totally agree about the awesomeness of ferries in those cases where they do work, though .... I used to have a daily ferry commute (to Seattle) and lovvvved it....!

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    5. Transfers are actually quite convenient in this case. The terminal on the Manhattan side is directly linked underground with the WTC and multiple subway lines. Of course, that's the destination for most. On the jersey side, all the train terminals are giant ferry stations as well. Not quite cross-platform, but it's a very short walk, shorter than many subway station transfers.

      Ferries are also surprisingly good in all kinds of weather, they almost never shut down.

      Ferries also have huge size ranges, from 40 to over 1,000 passengers.

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  2. We might ask why PATH was built in the first place. (At the time there were lots and lots of ferries.) I believe the answer is that it was faster.

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