Why the New York City Subway System Should Privatize

A recent surge in breakdowns, delays and overcrowding at New York’s subway system – in conjunction with a steady stream of rate hikes – has left many New Yorkers fuming and seeking answers.
By citing proximate causes like record-high ridership, the New York Times attempted to provide those answers in last month’s column (Why is Subway Service in New York Getting Worse? May 27, 2017).
But these problems have been plaguing the systems for decades – indicating that their continuance stems from the system’s underlying, structural flaws, not a one-time spike in ridership.
For public transit systems like New York’s Metropolitan Transportation Authority (MTA), those flaws manifest as a ‘recurrent theme of mispricing, misallocated funds, suboptimal service and investment and inflated production costs,’ according to the Brookings Institution’s Clifford Winston.
The most glaring example of misallocated funds at the MTA is their outdated signal system – which directs subway cars and governs how many can safely be in use at the same.
Despite having spent more than $100 billion since the early 1980s on infrastructure upgrades, the MTA’s signal system still uses technology from the 1930s!
Obviously such antiquated infrastructure is going to malfunction, but that’s merely a symptom of a much larger and more fundamental problem: That there is no incentive for the MTA to get better.

This post was published at Ludwig von Mises Institute on June 18, 2017.

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