The MTA runs New York City subways,
buses, and commuter trains that 6
million people rely on each weekday. And
on Monday, board members approved close
to a $2 billion contract to expand the
Second Avenue subway line into East
Harlem. Jay Patel is the CFO of the MTA.
She's charged with quite the task, which
I think is fair to say many would find
unenviable, charting a sustainable path
through one of the agency's most
financially trying periods in its six
decade history. She joins us here in the
Bloomberg Business Week studio. Jay,
welcome. How are you?
>> I'm good. How are you, Tim? Thank you
for having me.
>> Yeah, thanks so much for joining us. I
want to start with the numbers. Uh, and
and just ridership here. Weekday subway
ridership is still 25% below precoid
levels. In your modeling, does that ever
come back to where it was? Um I you know
we have a financial plan that's a
five-year period and originally we were
projecting that we would see our subway
ridership up to 90% but a couple years
ago we revised that because we weren't
seeing that but we're hopeful we see an
80% by 2029 ridership recovery for uh
subways. But on the railroads we're
seeing that recovery even higher today.
We see 85% ridership recovery on our
railroads which is amazing. something
that we thought was going to be slower,
our railroad customers, than our subway
customers originally coming out of pre-
pandemic.
>> So, is there a way to tap into that
growth financially perhaps with higher
prices for those commuters rather than
here in the city for subway and bus
riders?
>> So, I you know what we have is very
small predictable fair increases that
help balance the financial plan. And so
we don't want to burden one rider over
another. It's really about distancebased
and commuters. And so we keep that
equitable. You know that we do a 2% fair
increase every other, you know, every
other year. And that keeps our financial
plan in balance.
>> How do you plan to get that number? I
think you said 80% ridership. How do you
bring people back uh into the subways?
We
>> we bring uh riders back by providing
reliable ontime performance. Right. Our
service matters to customers and
delivering the service that we promise
and schedule is something that we strive
for. But also safety um our customers
need to feel safe and safe and our
customers feel that right. We've had the
lowest uh safety uh you know numbers or
crime numbers in July. And so our
customers are telling us that by uh
taking the subway, but also our customer
surveys, right, tell us that customers
are satisfied with the service that
we're providing.
>> The MTA faces a combined $1.1 billion
deficit over three years starting in
2027. It already owes close to $50
billion. It needs to spend $68 billion
more for vital improvements. There's
some federal aid that's up in the air.
The Trump administration is trying to
roll back congestion pricing. What's the
backup plan if the aid evaporates and
the president is successful in rolling
back congestion pricing?
>> You know, Tim, I would be remiss if I
didn't mention that back in 2023, we
were the first transit agency to solve
our fiscal cliff thanks to Governor
Hokll, Chair Liieber, and the
legislature. We were able to come out of
a deficit unlike any other transit
agency today. You've heard SEPTA is
facing deep cuts, Chicago, but we were
the first to say we need state, federal,
and local um aid. And we got our state,
federal funding for us. We also as the
MTA contributing to our solving our
deficit, right? The MTA contributes 500
million to its operating efficiencies.
And those deficits that we have in 27
and 28 and 29 are very small compared to
our operating budget. and we are
committed to doing our part in saving
money to help sure ensure that we can
balance our budget in the outy years.
>> We were talking a little bit about the
base fairs of subways increasing
regularly. I'm wondering if there is
there a set area within the MTA that
that revenue goes toward because the
base fair for a subway in New York City,
it's expected to increase to $3 uh in
January.
>> Correct. So our fairs um help our
operating budget, right? So they 70% of
MTA's cost are labor and fringe and so
that pays for 70,000 employees and then
the small fraction is for the non- labor
contracts. So every fair contributes to
operating cost on our side.
>> Let's talk about fairs and and fair
evasion. Usually when we talk fair
evasion, I think of people jumping over
subway turn styles and I know there have
been some mitigation efforts in place,
but I took the bus to Lagoria on
Thursday. It was a great experience, but
when I got on the SPS in Queens, I got
on, it was like an articulated bus, so
you know, it was a long one. I got off
on in the back and out of like more than
half a dozen people, I think I was the
only one who paid. And I was thinking to
myself, I didn't know it was optional
>> to pay to get on the bus. What are the
numbers there? So it's not optional,
right? To pay the fair. We are
encouraging every customer to pay our
pay their fair share to
>> But there's no enforcement on the bus.
>> So there's a couple things that we're
doing for fair evasion and our chair has
been tackling this first when he became
chair. So on the subways, you've heard
of us talking about we're doing fins,
sleeves, gate guards, enforcing the exit
gate, which is the the fair, you know,
evasion highway. And so we've made great
strides on the subways. We've reduced
fair evasion in over a year by 30%.
We've dropped that rate from a high of
14% to 9.8%. So, we know those efforts
are working. On the buses, it's a little
bit more difficult, but we're also
working there. We've in uh decreased
fair evasion on our buses as well in the
last year from 50% to 44% because all
the tactics the president um of New York
City Transit is employing. We have eagle
teams that are look, you know, on
different bus routes to make sure that
they enforcing the the pay your fair,
right? Our bus um operators do their due
diligence, but really our eagle teams
are enforcement out there riding
different routes and making sure
customers fair uh pay their fair or
they're getting a summon or they're
getting off the bus. And that's how
we're working toward that.
>> How does that work? because I heard of a
friend who was on a bus and someone had
come around and like scanned their phone
to see if they had paid the fair. Is Is
that how it works? Explain to us.
>> Um so right now um what we are doing is
if you're boarding the bus you have to
pay because there's two different ways
you can pay. Right. Today is the Metro
card and the Omni. And when we go to
full Omni next year, there's going to be
proof of payment. And so what you can do
is European style proof of payment for
customers is you can tap their phones or
credit cards, the method of payment to
see if they paid their fair. And if they
didn't pay their fair, that's something
that we'll work with on a summons or you
know, you need to pay your fair for our
customer. And so that's something that's
coming. We're really excited about that
for omni and proof of payment, but right
now there's two different methods and so
we're working on different ways to uh
combat fair evasion. I want to talk a
little bit about proposals from mayoral
candidates Zoran Mandani, for example,
his proposal to make all New York City
buses free. What do you think of that?
And and does it create a sort of a
two-tiered mass transit system where
people who ride buses don't pay for it,
but then people who ride the subway do
and it kind of offset like people not
necessarily taking the right mode of
transit for their destination?
>> So, we've heard the Mariel candidates um
proposal for fair free buses. What I'd
like to emphasize again is fairbox
revenue is important to the operations
of the MTA. It's 26% our re of our
revenue and buses is about a billion
dollars in the outy years of revenue for
for the MTA bus uh for the MTA excuse me
and that's important to us and so we
want to make sure revenues equal service
and that is something that's a
hypothetical right now but we we rely on
fairbox revenue. So you you said a
billion dollars in revenue is what it
brings in. Mom Donni estimates that's
about $750 million annually to make
buses free. Is that an accurate
assessment on his part?
>> Um I think there's pieces that he's he's
looking at just the New York City
transit bus fair. We have MTA bus that
we also run that the city contributes to
and that is also fairbox revenue for
buses.
>> So what would taking away that revenue
from the MTA due to the authorities's
finances or would it just be I mean look
again it's a proposal. You said it's
something that, you know, is not a plan
yet, but to be fair, he is by far the
favored candidate and there are a lot of
questions about what power he has to
actually follow through with a a
campaign promise such as this, but this
is certainly a central part of his
campaign. So, you got to be looking at
it closely.
>> We are looking at it, but one thing that
I would like to emphasize right right
now in New York City, uh, fairs are
affordable. We make transit and buses
the most affordable at $2.90.
and it's affordable with fairs um
reduced fair for our customers. But you
know it is something that we will look
into as the mayoral candidate um has
proposed.