Transportation Deployment Casebook/New York Subway

The New York City subway system has an illustrious history since its inception in the early 1900s. From its modest beginnings in 1904 with one line opening, the New York City subway has become the largest subway system in the world completing 1.6 Billion trips a year. It is hard to imagine for all of those who have taken the subway in New York City, but the 1.6 Billion trips that we see today is only 80% of the total rides seen in the years 1929 and again in 1945, despite being a significantly smaller system. This case study will focus on the birth of the New York City subway system, including what policies were instituted to get it off the ground, then onto the growth phase seen between 1910 till 1919, and finally mark its peak in 1929 and what caused the system to level off at 2 Billion trips served in that year.

The Subway from 1904 till 1945
When analyzing the total rides made within the New York City subway system, the argument can be made that from 1904, when the first subway line became operation, till 1929 encompasses the entire life cycle of the mode of transportation: the birth, growth and mature phases are all encompassed. While a peak is seen at 1929 with roughly 2 billion rides made that year, there is a decline in the 1930's (due to the Great Depression, with a resurgence during the 1940's, eventually hitting to peak of 2 billion rides made.  Below is a table of total rides made on the New York City Subway:

From this data, we can use a three parameter logistic model as follows:

$$R(t) = K/[1+e^{(-b(t-t_0)}]$$

Where R(t) are the total rides with respect to the year, t, K is the carrying capacity of the system (in our case, the maximum number of rides), t0 is the inflection point, and b is the exponential coefficient. To find each of the three parameters, the natural log of both sides is taken and a linear regression is run to best fit for the b and t0 parameters. To estimate for K, the New York City subway reached a maximum of roughly 2 billion rides, to which the value was rounded up to 2.1 billion rides. The following was the equation to which a linear regression was run on Microsoft Excel:

$$Y = \ln\left(\cfrac{R(t)}{(K-R(t))}\right)= bt-bt_0$$

Two regression were run: first on the data between 1904 and 1929, the second on the data between 1904 and 1945. After running both regressions, the data ending in 1929 had an R2 value of 0.95 compared to the data ending in 1945 had an R2 of 0.82. The logic for limiting the regression to 1929 was that for the exceptional circumstances the Great Depression appeared to have on the system; the birth and growth phases are accurately predicted by the logit model using the 1929 model and the mature phase could be seen as starting in 1929 when the peak rides were first made. While the R2 value would be higher for the 1929 model if the data between 1929 and 1945 was considered, ultimately it seems as though the Great Depression was the primary factor as to decreasing ridership (as seen by the return to 2 billion rides made in 1945) and therefore will be treated as "outlier" data points.



Using the 1929 data set, b is found to be 0.215, and t0 was found to be 1916, which is indicated by the purple line in figure 1. When considering the history of the subway line, as explored in this article, 1916 does historically line up as being an inflection point for the New York City subway. Considering the fit of the model for the first two phases and how the model lines up with the data in 1945, it can be said that the New York City subway system has experienced an S-shaped curve so often seen for transportation modes.

The three phases have been broken down by color code in figure 1: green representing the birth phase, yellow the growth phase, and orange the mature phase. While the dates set for each of these phases were subjective, each were decided because of historical context. The birth phase started in 1904 with the first subway line in operation and lasted until 1910 when the Dual Contracts was signed between the two major rail lines and the municipal government. The Growth Phase was from the signing of the Dual Contracts till the point when subway hit its peak in 1929. The mature phase spanned from 1929 till 1945, when it went through a decline and rebirth up to 1945. The purple line represents 1916, which was the calculated inflection point: when the rate of growth went from increasing to decreasing. This article pertains specifically for this period - for further reading, please refer to Transportation Deployment Casebook's chapter Ridership On New York City Subways.

The Beginnings of Subway Transit
While the first subway rail line opened in October of 1904, above ground rail in New York City began in 1868 with the IRT Ninth Avenue Line. Operated by steam locomotives, there were several companies owning a few lines apiece both in Manhattan and Brooklyn. However, after the turn of the century, the rail lines would be consolidated into two companies: the Interborough Transit Company (IRT) and the Brooklyn Rapid Transit Company (BRT), with the IRT dominating the Manhattan market and the BRT dominating the Brooklyn market. The above ground lines weren't the only forms of commuter transportation. For long distance commuting, i.e. from Connecticut and Long Island, there were well established rail lines such as the Long Island Railroad (LIRR) and the New York Central Railroad (NYC). Both allowed people access into New York City through Grand Central Station - at the northern extent of the CBD. Yet, both lacked the ability to move people from Grand Central further south, which left service open for the IRT, or for people to come in from southern Brooklyn, which left service open for the BRT.

Which ever gaps that were left by rail were filled in by pedestrian traffic, cars, buses, and earlier on horse-drawn rail. For the CBD of New York, described as any part of the Manhattan south of 59th Street, all the different modes of transportation were crowding the narrow streets of New York City. Even when the first above ground rail opened up in 1868, people were planning for an underground subway line to alleviate commuter congestion. For example, one engineer by the name of A. P. Robinson predicted, with consideration to population trends and the increasing density, that there would be 200 million trips made in 1880 - the actual number would eventually be 288 million. It was through his predictions that he thought that subway system should be constructed in order to alleviate future congestion problems that were bound to plague the city. As you can tell, the subway system had been a point of discussion since before the Civil War, yet it wasn't able to get the green light from the City of New York until 1898. At that point, the IRT and BRT were begging to expand their operations. The next chapter discusses what changed over the 35 years when the first elevated lines were created to push the city to making the rail run under the city.

The Advent of Subway in New York city
The first subway line took 6 years to complete, beginning in 1898 when the city finally approved to franchise seven new subway stations to the IRT, continuing to groundbreaking in 1900, till the first train ran the tracks in 1904. While the project itself took 6 years, in reality the battle to construct a subway system in New York City start much earlier and took many factors. This article will highlight the three of them: the success of the elevated rail, the new technological advances, and the increasing population.

Elevated Rail
For all intents and purposes, the elevated lines in both Manhattan and Brooklyn were a success. With the eventual formation of the BRT in 1896 and the IRT in 1900,both were able to standardize their lines for their particular train. Both companies would also hold relative monopolies over the other: while the IRT would control trips within Manhattan, the BRT line controlled all of the commuter elevated rail in Brooklyn and had a few access points into Manhattan. Furthermore, by being distinct lines, they did not have to offer their customers transfers from one line to another, maximizing their profits for those force to take the rail.

Ridership was expanding and the rail operation companies were able to supplement the governments in order to franchise new station construction. Throughout the late 1800's, elevated rail companies vied for access into downtown/midtown Manhattan, extending their lines to areas with relatively low population density. Through the success of these companies and with the experience in handling the City of New York, they felt confident in lobbying the government for a more ambitious project. They knew that they could leverage the municipal government into franchising new stations for them and derive profits from the growing populations moving into areas that they were building out to, including Harlem and The Bronx.

New Technologies
There were major technological advances that were revolutionizing cities across the world. While J.P. Robinson drew up schematics for what a subway in New York could look like, many new advances allowed for both easier construction of the subway and operations. First and foremost, the electric locomotive was invented and began to be deployed worldwide by 1902. Unlike the London Underground, which required significant ventilation due to the steam engine usage, the electric train could be fed energy from their power station (the IRT would build its own power station to supply it energy - IRT Powerhouse(http://www.nycsubway.org/articles/powerplant.html)). Since there wasn't the necessity to keep the tunnels well ventilated, these tunnels could be built deeper underground (when cut-and-cover couldn't be done). While the technology was available for the engineers to construct tunnels deep underground, it was only done when cut-and-cover could not be done: either when they had to tunnel through rock or go under the East River. Steel and concrete were relatively new materials that enabled engineers to not only support their structure more soundly with less space, but it enabled them to build the tunnel out to support four lanes of track. Ultimately, the four lanes of track not only increased the potential capacity, but allowed for express line services, increasing the utility of the subway lines. Lastly, tunneling became much more sophisticated allowing for the engineers to build a tunnel under the East River to The Bronx and for in circumstances when cut-and-cover couldn't work.

Increasing Population
Over the 35 years since the first rapid transit bill was vetoed by the New York governor, the population of New York increased at an astronomical pace: from 1870 till 1900, the population grew from 1,478,000 to 3,437,000. Denser living brought about by the invention of the elevator and building skyscrapers required more rail transit for those living within the cities. With the elevated lines at full capacity and the roads clogged with traffic coming from a myriad of sources, people were demanding transportation solutions; one which subways could provide. Furthermore, places that elevated rail lines had supplied service to without significant populations were now bustling with people. The best example of this is The Bronx, which in 1870 had a population of 37,000: at this point was still considered the hinterlands to lower Manhattan and downtown Brooklyn. By 1900, the population had grown to 200,000 and were bustling to do business within lower Manhattan. Harlem is another example of this, where in the years leading up to the elevated lines coming in were farm land. The elevated rail lines had allowed people to live further away from the city center, but new transportation strategy was needed to address these issues.

Policies in the Beginning: 1898 till 1910
By 1898, when the municipal government of New York City decided to finance a subway rail line, the government had two major things to consider: one, its prior relationship with the various rail companies, and two, how it will distribute the subway project. Up to this point, rail projects were done as follows: either the city would build the rail and lease it out to private operating companies or private operating companies would lobby the government to build a rail and allow them to operate them by paying for a portion of the capital costs. In 1898, the city had decided to finance the former and allow the elevated rail lines to bid for the contract. In 1900, the Manhattan lines had consolidated to what became the IRT and won the contract to operate the first line which was to run from City hall to 145st in The Bronx. The terms of the contract stated that IRT leased the track for 99 years, and for that time would pay a portion of the operating costs directly to the city - much like they constructed past contracts with elevated rail companies. There are two major things to consider: one, they did not include a clause on how much the rail could charge to use the subway, and two, they did not include within their contract a way for the government to funnel any profits the company made off of the subway. Funding was especially problematic because of stat law which required the debt of a city to be no higher than 10 percent of their budget, which was set by the state government. That meant that the initial subway project would have to remain under $30 million, and that funding would have to stream in on a year to year basis. This caused some friction not only between the municipal government and the state, but also within the newly formed municipal government. Up until 1898, Manhattan and Brooklyn were two separate cities vying for the same economic pie. With the consolidation of the five boroughs, they now had to work together within the same municipal government to get money for their borough.

Overnight the subway became a huge success. As seen in figure 1, the total trips made by the single line increased from 73,000,000 to 138,000,000 within a full year of operation. While the line had opened up in 1904, plans to extend the original stations continued until 1906 which opened up more areas that had seen this population boom. By 1908, before which the IRT and BRT companies had been "legalizing" routes that could be constructed in the future, ridership had skyrocketed to 550,000,000 rides. The newly formed Public Service Commission (the successor of the Rapid Transit Commission, which had been dissolved due to not approving of more projects sooner) began approving numerous projects: extensions to the existing line, creating a subway line in Brooklyn, etc. By 1909, engineers had looked over all the plans the new Public Service Commission had approved, to which the new lines would add 47 miles of track and cost $147 million. Clearly they were not to make the same mistakes as their predecessors! As noted earlier, the city was bound to stay under a certain debt threshold, and these new ambitious projects would be above and beyond what they could pay for themselves, so they began to negotiate with the two major lines how they were going to divide up the responsibilities towards this monumental project.

The Growth of the Line: The Dual Contracts
In December of 1910, negotiations began between the major rail companies, and the city for how the system was going to expand going forward. The negotiations proved to be very difficult since all three parties (the IRT, the BRT and the City) had their own agenda. Gaining access into Manhattan was the primary goal for the BRT heads since this was more and more becoming the destination for commuters. While the IRT tried to block this, the city government was more interested in unifying the two systems and allowing for greater access between the two systems. The city government knew that this was the time they had the greatest leverage over the rail companies, which they saw as getting a great deal up to this point. There were four major points that the city looked to get during these negotiations:


 * 1) Set fares across the entire system
 * 2) Take a portion of the profits the companies were taking in
 * 3) Split up Queens between the two rail lines
 * 4) Have full control over the track within 10 years time

Each of these points were a significant change in policy up until this point. In dictating the fare price, the city government was ensuring that these companies couldn't take full advantage of the newcomers to the city who had no choice but to live on and work along the rail lines. In the final deal, the fare would be set on 5 cents (one note for some perspective, when A.P. Robinson designed his system in 1864, he set the fare prices to 7 cents) and was not to change with inflation. One caveat the companies were able to exploit was that transfers were not honored from one train to another. The second point was also crucial: this marked the beginning of the government getting into the rail business: they saw these companies getting rich seemingly overnight and wanted a piece of the action. The third point was a negotiation currency that the city used to appease one company or the other. Ultimately, the next frontier in lines would be in Queens and both companies wanted some portion of the lines that fed those areas. Finally, and most importantly, the deal was to include a provision where the city would be allowed to own the lines within 10 years time if they so chose.

In 1913 the deal was signed and the most ambitious transportation project within New York City began. The total cost of the project would be $347 million, where the city would contribute $150 million, $56 million from IRT in construction, another $21 million from IRT in equipment, $34 million from BRT in construction, and another $26 million from BRT in equipment. When completed, the line would triple in capacity to supply roughly 1 billion trips to 3 billion trips, adding 334 miles of track to the already existing 303 miles of track. Obviously, the ramifications of the Dual Contracts was enormous. The city had been able to unite the two lines, allowing for greater integration in the system as a whole. Ridership was steadily increasing and only started showing signs of slowing by 1916, breaking the 1 billion rides per year in 1917, 1.5 billion in 1922 and capping off at 2 billion in 1929. Furthermore, the city was able to recoup more of its losses through deriving some of the profits from the companies and began drawing up plans for its own subway line, the Independent Subway System (IND).

Unfortunately, not all parties benefited from this equally. In terms of splitting up Queens, while the city had made it so both IRT and BRT had to share the two lines built, both of the lines were built to IRT specifications. This meant that in order for a BRT customer to get to Queens, they must switch trains at Queens Borough Plaza - the new hub for Queens travel. For both companies, problems arose with the fixed fare price. Since the fare did not change with respect to inflation, both companies lost huge amounts of revenue at the end of World War I due to the extreme inflation seen post war, even with the increasing ridership both during and afterwards. This would actually push the BRT into bankruptcy in 1923, but got reincorporated as the Brooklyn-Manhattan Transit Corporation (BMT). The Dual Contracts had both brought about the greatest expansion in history, which could not have been achieved by either of the major rail companies at the time, but also set the stage for eventual decline.

Market Saturation: The Unrealized 2nd Ave Line
By 1929, the market for rapid transit had reached saturation within New York City. At that point all of the lines agreed upon in the Dual Contract had been completed and the city was looking for future projects to start construction on. When the city began proposed its list of future construction projects, most of the construction was to extend lines out into Queens and to interconnect the IRT and BMT lines. Most projects never came to realization, though, due to the Great Depression. While some of the smaller projects were completed over the period of a decade, the only major project to come to completion was the IND Eighth Avenue Line: the first publicly owned subway line in New York City. Up to this point, the city was still only obtaining a fraction of the profits that IRT and BRT/BMT lines had been getting for decades and decided that it would build its own, rather extravagant, line. In 1925, construction had begun and wouldn't be complete until 1933 due to its complicated design which included flying junctions and a highly integrated system. These costs would triple the amount of debt held by the government: the project cost $191 million and was entirely financed by the city. Almost on cue, the Great Depression eliminates any chance the IND line had on making profits, to which by 1940 the IRT and BMT were bought out by the municipal government. Neither the IRT or the BMT could cope with both the loss in ridership and the inability to change the fare price. Within 30 years, the subway industry that began from a $30 million project, garnered over $347 million in investments

While the IND was able to come to fruition, a subway running on what was the 2nd Avenue elevated rail line never came to fruition. Yet, because of its continued stay in the limelight, 70 years after it had been proposed, the Second Avenue Subway has begun construction in 2010. In many ways, the line came to symbolize how people viewed the subway system in New York City: a project that was never finished. Even so, people are skeptical about whether it is absolutely necessary in what is already the largest subway network in the world; in a lot of ways the system won't be adding something as monumental as the IND line or the lines made during the Dual Contract phase. Yet after all the cuts the system had to make in the post War period, in the dog days of the 70's and 80's for the New York City subways were crime and graffiti were rampant, people are looking for hope that once again the New York City subway system is going through a regrowth phase, starting with the Second Avenue subway.

Additional Links
Some additional maps to visualize the changes along the New York City Subway
 * http://composure1.com/subway.html
 * http://diametunim.com/shashi/nyc_subways/