GSI Briefing: Transit and Transportation Priorities Post-COVID

The restructuring of traditional office arrangements and the widespread adoption of home offices are together challenging our region’s transportation authorities like at no time in our past. With this sudden reality expected to dominate the next 2 to 3 years, on January 26th GSI convened an expert panel to discuss the priorities and policy changes our transportation leaders need to consider and then begin to undertake to serve New Jersey residents and businesses. Our panel included:

• Jon Carnegie, Executive Director of Rutgers’ Voorhees Transportation Center

• Nicole Gelinas, Manhattan Institute & NY Post Columnist

• Robert S. Gordon, NJ Transit Board Member, fmr. State Senator and current Commissioner of the Board of Public Utilities

• James S. Simpson, fmr. NJ DOT Commissioner, Federal Transit Administrator and MTA Board Member

In a wide-ranging conversation which you can view below, our panelists agreed on many of the challenges facing leadership but that there was uncertainty surrounding how the next 5 years will unfold.  There was however widespread agreement on the shorter term (2-3 years) assumptions:

• A meaningful subset of today’s workforce will not return to their pre-COVID work arrangements…a mix of traditional and virtual workplaces will endure throughout the next business cycle.

• Aggressive recurring cost management by transportation and transit leadership is necessary to survive post- federal support to enable infrastructure to adapt to the evolution of patterns of commuters and still-developing centers of economic activity.

• Revenue streams have been disrupted so the use of public transportation in day-to-day activities as well as regular commutation must guide longer term planning in order to meet new market demands and price pressures.

The panel also debated the relative merits of various strategic and sometimes controversial options including:

New Revenue Streams: tolling in-state portions of federal highways such as I-287 and I-78; introduction of congestion pricing in dense urban areas where public transportation is available; expansion of “Impact Fees” on developers to reflect the longer-term cost burden on communities for local transportation and transit.

Structural Cost Reductions:  re-negotiation of contractual agreements to relieve accelerating cost burdens, such as adopting Obamacare coverage for retirees; updating work rules to reflect diminishment of 3-hour peak rush and more even stream of travelers;

GSI’s transit and transportation policy recommendations are outlined below.

GSI Transit & Transportation Policy Recommendations

Reflecting on, and taking all perspectives under consideration, GSI strongly recommends the following fiscally responsible policies to state leaders as they consider funding priorities.

1)  TRANSIT SERVICE EVOLUTION FROM “EVERYDAY ESSENTIAL SERVICE” TO “AMENITY BASED EXPERIENCE” IS ESSENTIAL FOR SURVIVAL

The pre-pandemic commuter experience is unacceptable and employers will agree with their workforce on this. As employees have shown to be productive working from home (WFH), lost work time due to commute and the negative impact on employees’ quality of life, will all contribute to an unwillingness to accept their prior experience.  The days of packed train cars throughout a commute, hours-long waits at the Port Authority and Penn Station due to delayed service, can not recur.

Transit-oriented development in suburbs will continue.  There will be more demands on smaller cities and towns for day-to-day amenities since workers will be spending more time in those localities.  They will still want proximity to urban centers like NYC and Philadelphia, but for fewer days a week leading to demand for more walkable neighborhoods, 24/7 entertainment and cultural offerings, etc. The urban studies theorist Richard Florida, cited by several panelists, provides advanced ideas on how agencies need to evolve.

Dense urban areas need 24-hour transit service to support late hour jobs such as restaurant/bartenders and early morning starting hours like bakers, delis, etc.

 2)   ACKNOWLEDGE NEW BALANCE OF URBAN VERSUS SUBURBAN RIDERS IN ALL DECISIONS

While the transition will be multi-year, a majority, but not all, commuters will likely work from home 2-3 days a week.  The days of transit being supported by those paying $400 for monthly commuter pass are gone as is the structured 3-hour “peak commute period.” 

“Fare Policy” must be remade to reflect the full scope of utilization of public transportation.  Consideration for the most economically challenged markets needs to be prioritized reflecting those who use public transportation for basic services like doctors’ appointments, shopping etc.  Off Peak/Peak service no longer reflects market demand.

New technologies, such as alerting waiting passengers to less crowded buses, give more power to consumer to make choices rather than agency dictating when and how customer will utilize service. 

3) PRIORITIZE EXPENSES TO INVEST IN IMPROVED CUSTOMER EXPERIENCE

Bold steps are required in order to increase flexibility/agility in cost structure management so agencies can respond to changing market conditions over the next 3-5 years.

Large and long-term liabilities need to change.  Overly burdensome retiree healthcare particularly for pre-Medicare retirees are being shifted by other cities’ transit agencies by moving younger employees into Obamacare options.  These federal options should be leveraged to align liability with programs designed to care for these groups.

Look to private industry models for cost re-structuring. In the last 12 months, the airlines accepted federal subsidies but have restructured operating, labor and capital costs at the same time.

There are substantial safety concerns along with returning commuter volume demands that require the aggressive pursuit of financial commitments for the Gateway Program (cross-Hudson tunnel project) at both the federal and state level. This assumes the resurgence of larger cities, particularly Manhattan with its related jobs, will continue, albeit not to full pre-pandemic levels, in the short term. As currently designed, Gateway will serve the broader Northeast market over the next 100 years as these current tunnels were constructed at the beginning of the 20th century.  Infrastructure planners of course need to continually evaluate new technologies and alternative trans-Hudson modes as this project unfolds.

Adopt approaches from other markets including Asia and Europe, to modernize ticketing to enable contactless transactions and reduce human cost of operations, implement spot-checking onboard trains which will relieve the problem of jam-packed cars as today train cars remain closed or empty because of a lack of conductors and look at P3s for expansion and improvements.