A new report from Moody’s Investors Service puts bleak numbers on the future of mass transit agencies. The report states that changes in working patterns and lifestyle will trigger a permanent drop in mass transit systems’ ridership compared to pre-pandemic levels, creating an enduring loss of operating revenue for the largest public transit agencies in Europe and North America such as, Transport for London (TfL), Ile de France Mobilites (IdFM), Metropolitan Transportation Authority, NY (MTA) and South Coast British Columbia Transportation Authority (TransLink).
Now, some recovery is expected as vaccinations increase and the pandemic winds down demand will remain around 40 percent less than pre-pandemic levels in this fiscal year. Ridership is set to permanently fall by 20 percent from pre-pandemic levels. That could reduce revenue by 8 percent. “The sharp increase in remote working during the pandemic is likely to result in a permanent shift in the labor force to more flexible working patterns, with fewer days spent in offices”, the Moody’s analysis said. An expected shift for some residents away from large cities towards suburbs and smaller towns is factored into the analysis.
The MTA had $48.2 billion of outstanding debt as of the beginning of March. Debt-service payments and pension contributions account for 30 percent of operating expenditures. Clearly the massive amount of debt combined with permanently shifting trends means that the MTA needs a complete reimagination. The business model of transporting as many people as possible into the Manhattan business core is no longer sustainable. Yet, the same old poor thinking continues to dominate the MTA. So much so, that they are looking to push through their congestion pricing debt scheme. This scheme not only will add an absurd amount of debt on their already beleaguered books, but it will disproportionately hurt small businesses that have been devastated by the pandemic and helped keep the city running through it.