Felix Salmon

Traffic is flowing in New York again this morning, for four reasons. First is the ban on private cars entering the island if they’re carrying fewer than three people. Second is the subways, which have started working again, in a limited manner. Third is a noticeable increase in bicyclists, even between yesterday and today: I have real hope that Sandy might persuade a whole swath of new people that bike commuting is incredibly fast and easy. And then there’s a much more mundane fourth reason: people are running out of gas.

With much critical infrastructure still out, many gas stations don’t have electricity to pump gas, and most of the rest — at least in New York and New Jersey — have sold out, as people filled up not only their cars but any other vessels they could find. Gasoline is precious right now: it powers generators which pump out flooded buildings, as well as powering the one form of transportation which is capable of getting stuff from Brooklyn or New Jersey into Manhattan. As for when new supplies might arrive, that’s extremely vague, but the consensus seems to be Saturday.

There’s something self-fulfilling about gas shortages: they’re the crisis equivalent of a bank run. So long as everybody just goes about their day in a normal manner, refilling their tank only when they get low, everything goes smoothly. But when people start thinking that there might not be enough to go around, everybody panics and rushes to the stations: while shortages in New Jersey have real Sandy-related causes, shortages in places like Westchester are essentially the product of self-fulfilling fears.

The standard econowonk response to such things (see e.g. Yglesias, or for that matter Uber, which has reverted to “surge pricing”) is that if the market were just left to its own devices, none of this would happen. Prices fluctuate in response to changes in supply and demand, so when supply goes down and demand goes up, it’s only natural that they should rise to the point at which demand starts falling off and the two finally meet again. At that point, the gas stations will still sell most of their gas, but there won’t be massive lines at the pump, and there will always be gas — at a price — for those who really need it.

It doesn’t help matters that such arguments tend to come from the kind of people who can afford to pay extra for their essentials. Crises always hit the poor worse than the rich, even when prices don’t rise: in my own NYC neighborhood, for instance, there is tragic human suffering right now, even as I have a warm and comfy office to go to, a group of rich friends with spare rooms, and enough money to pay for a hotel or Airbnb room should I need it. If the Lower East Side’s handful of open bodegas started price-gouging just because they had a captive audience, that would only exacerbate the situation — quite aside from the fact that it would also open them up to the very real risk of grievous bodily harm.

At times like this, the charitable impulse, of helping out where and when you can, is very strong: hence the articles with headlines like “Donate to Hurricane Sandy Victims with a Simple Text Message”. Even as gas stations are running dry, individuals across the northeast are siphoning out gas from their cars’ tanks to provide fuel for people who need it more than they do. They’re not charging a market-clearing price for doing so: in fact, they’re not charging any money at all. Multiplied thousands of times, such small individual acts of charity make a huge difference.

Meanwhile, during a crisis, the opportunity costs involved in sitting in a long line for gas actually fall substantially. Yglesias is right that price-gouging would reduce those costs, but they are the least of the damage that a storm like this causes. Much more important is the feeling that your neighbors are rallying together at a very hard time. If we all run out of gas, we’ll all run out of gas. But we won’t try to profiteer from that, and we’ll try to use it in as effective a way as possible, rather than just letting it get acquired by whomever happens to be most price-insensitive.

That’s why there’s something a bit distasteful about Uber’s insistence that the only way they can provide a good service these days is by charging more money. The cost of gas has not gone up: either their drivers can find the gas to drive people around or they can’t. The drivers, for their part, already make good money from Uber, whose prices are high; doubling those prices seems excessive, especially when there’s a strong impulse at times like these to help people out without charging any money at all.

I’m not taking a position here on price-gouging laws: while I don’t like the practice, I’m also not convinced that it should be made illegal. But the fact is that the benefits of price-gouging tend to accrue to a handful of merchants and the price-insensitive rich, while the costs are borne by those who can least afford it. ‘Twas always thus, or course, but during a crisis, especially, it’s a good idea to try to minimize such mechanisms, rather than trying to encourage them.

What a difference a day makes: yesterday, the streets of hurricane-devastated New York were largely empty; today, the electrified parts of the city are in a massive state of gridlock. It’s just as well the threatened Obama visit isn’t happening: traffic in Manhattan and most of Brooklyn is bad enough without it.

New York began as a small town based at the Battery, and slowly expanded northwards towards Wall Street (where the city wall was originally built) and beyond up to City Hall. It then expanded from there to the megalopolis it is today — but the heart of the city has always been, and will always be, downtown, where the East River and the Hudson River meet New York Harbor.

And right now, that heart — downtown New York — is a black hole. No electricity, no cell service, no heat in most buildings, no subway service, not even after it is restarted on a limited basis tomorrow. The temporary subway map is stark: everything just comes to a sudden halt at 34th Street, and at Borough Hall/MetroTech in Brooklyn. No electricity means no subways, and also no traffic lights.

In many ways, one of the most heartening lessons of Sandy was the utter lack of chaos in downtown Manhattan after the power went out. When the sun rose on Tuesday morning, cars, bikes, pedestrians, and emergency vehicles navigated the grid of streets efficiently and without rancor, and the amount of time it took to drive across town was if anything lower, with all the businesses shut, than it would normally be with all the traffic lights working. Public-spirited acts were everywhere: volunteers taking it upon themselves to direct traffic at major intersections; people bringing down power strips to the few outlets with generator-powered electricity; restaurants serving up their food for free to the local population; coffee shops jerry-rigging propane-based systems to give the people what they really need.

It turns out, as students of the Dutch woonerf system could tell you, that when drivers are forced to self-govern, rather than simply following the orders of speed limits and traffic lights, the system generally works extremely well, at least until traffic reaches a certain density. Similarly, the speed-limits-and-traffic-lights system also tends to work pretty well, until it doesn’t.

The idea is to maximize the number of person-miles per hour, especially during the morning and evening peaks. And there’s a real science to this: up until a certain point, if you add an extra car to the system, that increases person-miles per hour, just because that car contains people who are traveling a certain number of miles. But past that point, adding extra cars doesn’t help; instead, it hurts. You know how on a freeway traffic can be flowing smoothly and then suddenly grind to a halt for no particular reason? At that point, clearly, the capacity of the freeway to generate person-miles per hour plunges. And city traffic works the same way. In extremis, once you reach gridlock, no one is moving anywhere. And a world where people take half an hour to travel five blocks is clearly a world where they all would have been much better off just walking.

This morning, and this evening too, New York — electrified New York, that is, above 39th Street — suffered some of the worst gridlock it has ever seen; in a press conference, mayor Michael Bloomberg said that “the streets just cannot handle the number of cars that are trying to come in”. This is the context in which cab company Uber is boasting that it is “doing our best to figure out ways to get more cars on the road.” They’re even losing money by doing so — and exacerbating congestion at the same time. Under the Uber model, a lone driver will drive an often-substantial distance to pick up what is usually a lone passenger, will then drop off that passenger, and repeat the procedure over the course of the day. The car rarely has more than two people in it, often only has one, but is driving around the city and contributing to congestion on a continuous basis. (In contrast to private cars, which at least have the decency to park themselves out of the way when their job is done.)

The city of New York has a much better idea when it comes to cabs. Yellow taxis are being encouraged to get passengers to share rides, while black cars are allowed to pick up street hails (and can also pick up additional passengers). On top of that, the mayor announced today, there is going to be a new rule in effect tomorrow: if you’re driving into Manhattan after 6am using any of the major bridges or tunnels, you’re going to need to have at least three people in your car. Otherwise, you won’t be allowed through.

There’s a problem with this policy, which is that people are going to find it relatively easy to “slug” their way into Manhattan, getting rides with drivers who otherwise wouldn’t be allowed in, only to be stuck when those same drivers happily leave the island without them. But the principle is a good one: there’s no way that private cars can possibly transport everybody who needs to come into Manhattan, and as a matter of public policy, everybody gains if the number of private cars in the city is reduced. This is not the first-best policy, but it is the easiest to implement immediately, and in a situation like we have right now, you can’t have the perfect be the enemy of the good.

If the East River subway tunnels remain closed for more than a few days, however, this stopgap approach is not going to work. Millions of people commute from Brooklyn to Manhattan every day, and the only way they can be accommodated is with those subway tunnels. Every day those subway tunnels are out of operation is a day that New York City is essentially not functioning. And by one estimate, it could take weeks or even months for those saltwater-flooded subway tunnels to reopen.

Which means that the bigger-picture lesson of Sandy is the importance of investment in infrastructure. Our electrical utility, unable to find $250 million to spend on things like submersible switches and moving transformers above ground, is making adjustments only gradually — with the results we saw on Monday night. And $250 million is small beer compared to the kind of money it would take to protect New York Harbor from hurricanes, and to protect those subway tunnels from Sandy-level storm surges. Still, $10 billion or even $50 billion spent up-front would not only be a large economic stimulus for New York, but would more than pay for itself if and when global warming means that more hurricanes hit this area.

Where would that sort of money come from? Cate Long has one suggestion:

The most obvious source of funding for these projects would be for the Federal Reserve to purchase public infrastructure bonds instead of the $40 billion a month of mortgage-backed securities it has been buying. The housing market is important, and keeping mortgage rates low is useful, but investing in public infrastructure is much more important for the nation now.

It’s not a bad idea: the Fed would do more long-term good for the country by buying infrastructure bonds than it would buying mortgage-backed securities. But there are problems with it, too: once the Fed stepped in, the chances are that no one else would lend, and private financing of public infrastructure would actually go down rather than up.* Maybe some kind of Treasury guarantee would be better, especially since these projects are fundamentally fiscal, rather than monetary, in nature.

In any case, there’s a clear public interest when it comes to investing in and coordinating our urban infrastructure. America’s cities, including New York, have been suffering from underinvestment for decades. Hurricanes happen sometimes; traffic jams happen every day. And some smart public expenditure could help minimize the damage that both of them cause.

*Update: Some confusion about what I was saying here. The point is that if the Fed started buying infrastructure bonds, that in no way would reduce the creditworthiness of those bonds. The price would rise and the yield would fall, as always happens when a large new buyer enters the market — but at that point the yield would be lower than the yield required by the market to make up for the credit risk in the bonds. So private-sector buy-and-hold investors would no longer buy them, the Fed would to a first approximation be the only real-money buyer. As a result, the flow of private money into the infrastructure sector would go down.

Back in July, I gave a cautious welcome to TomTom’s congestion indices. The amount of congestion in any given city at any given time does have a certain randomness to it, but more data, and more public data, is always a good thing.

Or so I thought. I never did end up having the conversation with TomTom that I expected back in July, but I did finally speak to TomTom’s Nick Cohn last week, after they released their data for the second quarter of 2012.

In the first quarter, Edmonton saw a surprisingly large drop in congestion; in the second quarter it was New York which saw a surprisingly large rise in congestion. During the evening peak, the New York congestion index was 41% in the first quarter; that rose to 54% in the second quarter, helping the overall New York index rise from 17% to 25%. (The percentages are meant to give an indication of how much longer a journey will take, compared to the same journey in free-flowing traffic.) As a result, New York is now in 8th place on the league table of the most congested North American cities; it was only in 15th place last quarter, out of 26 cities overall.

So what’s going on here? A congestion index like this one serves two purposes. The first is to compare a city to itself, over time: is congestion getting better, or is it getting worse? The second is to compare cities to each other: is congestion worse in Washington than it is in Boston?

And it turns out that this congestion index, at least, is pretty useless on both fronts. First of all there are measurement issues, of course. Cohn explained that when putting together the index, TomTom only looks at road segments where they have a large sample size of traffic speeds — big enough to give “statistically sound results”. And later on a spokeswoman explained that TomTom’s speed measurements turn out to validate quite nicely with other speed measures, from things like induction loop systems.

But measuring speed on individual road segments is only the first step in measuring congestion. The next step is weighting the different road segments, giving most weight to the most-travelled bits of road. And that’s where TomTom data is much less reliable. After all, on any given stretch of road, cars generally travel at pretty much the same speed. You can take a relatively small sample of all cars, and get a very accurate number for what speeds are in that place. But if you want to work out where a city’s drivers drive the most and drive the least, then you need a much larger and much more representative sample.

And this is where TomTom faces its first problem: its sample is far from representative. Most of it comes from people who have installed TomTom navigation devices in their cars, and there’s no reason to believe those people drive in the same way that a city’s drivers as a whole do. Worse, most of the time TomTom only gets data when the devices are turned on and being used. Which means that if you have a standard school run, say, and occasionally have to make a long journey to the other side of town, then there’s a good chance that TomTom will ignore all your school runs and think that most of your driving is those long journeys. (TomTom is trying to encourage people to have their devices on all the time they drive, but I don’t think it’s had much success on that front.)

In general, TomTom is always going to get data weighted heavily towards people who don’t know where they’re going — out-of-towners, or drivers headed to unfamiliar destinations. That’s in stark contrast to the majority of city traffic, which is people who know exactly where they’re going, and what the best ways of getting there are. There might in theory be better routes for those people, and TomTom might even be able to identify those routes. But for the time being, I don’t think we can really trust TomTom to know where a city as a whole is driving the most.

I asked Cohn about the kind of large intra-city moves that we’ve seen in cities like Edmonton and New York. Did they reflect genuine changes in congestion, I asked, or were they just the natural variation that one sees in many datasets? Specifically, when TomTom comes out with a specific-sounding number like 25% for New York’s congestion rate, how accurate is that number? What are the error bars on it?

Cohn promised me that he’d get back to me on that, and today I got an email, saying that “unfortunately, we cannot provide you with a specific number”:

The Congestion Index is calculated at the road segment level, using the TomTom GPS speed measurements available for each road segment within each given time frame. As the sample size varies by road segment, time period and geography, it would be impossible to calculate overarching confidence levels for the Congestion Index as a whole.

It seems to me that if you don’t know what your confidence levels are, your index is pretty much useless. All of the cities on the list are in a pretty narrow range: the worst congestion is in Los Angeles, on 34%, while the least is in Phoenix, on 12%. If the error bars on those numbers were, say, plus-or-minus 10 percentage points, then the whole list becomes largely meaningless.

And trying to compare congestion between cities is even more pointless than trying to measure changes in congestion within a single city, over time. As JCortright noted in my comments in July, measuring congestion on a percentage basis tends to make smaller, denser cities seem worse than they actually are. If you have a 45-minute commute in Atlanta, for instance, as measured on a congestion-free basis, and you’re stuck in traffic for an extra half an hour, then that’s 67% congestion. Whereas if you’re stuck in traffic for 15 minutes on a drive that would take you 15 minutes without traffic, that’s 100% congestion.

Cohn told me that TomTom has no measure of average trip length, so he can’t adjust for that effect. And even he admitted that “comparing Istanbul to Stuttgart is a little strange”, even though that’s exactly what TomTom does, in its European league table. (Istanbul, apparently, has congestion of 57%, with an evening peak of 125%, while Stuttgart has congestion of 33%, with an evening peak of 70%.)

All of which says to me that the whole idea of congestion charging has a very big problem at its core. There’s no point in implementing a congestion charge unless you think it’s going to do some good — unless, that is, you think that it’s going to decrease congestion. But measuring congestion turns out to be incredibly difficult — and it’s far from clear that anybody can actually do it in a way that random natural fluctuations and errors won’t dwarf the real-world effects of a charge.

When London increases its congestion charge, then, or when New York pedestrianizes Broadway in Times Square, or when any city does anything with the stated aim of helping traffic flow, don’t be disappointed if the city can’t come out and say with specificity whether the plan worked or not. Congestion is a tough animal to pin down and measure, and while it’s possible to be reasonably accurate if you’re just looking at a single intersection or stretch of road, it’s basically impossible to be accurate — or even particularly useful — if you’re looking at a city as a whole.

Today, September 11, is a day that all New Yorkers become hyper-aware of tail risk — of some monstrous and tragic disaster appearing out of nowhere to devastate our city. And so it’s interesting that the NYT has decided to splash across its front page today Mireya Navarro’s article about the risk of natural disaster — flooding — in New York.

Beyond the article’s publication date, Navarro doesn’t belabor the point. But in terms of the amount of death and destruction caused, a nasty storm hitting New York City could actually be significantly worse than 9/11. Ask anybody in the insurance industry: a hurricane hitting New York straight-on is the kind of thing which reinsurance nightmares are made of. And as sea levels rise in coming decades, the risks will become much worse: remember, it’s flooding from storm surges which causes the real devastation, rather than simply things blowing over in high winds.

So, what can or should be done? One option is to basically attempt to wall New York City off from the Atlantic Ocean:

A 2004 study by Mr. Hill and the Storm Surge Research Group at Stony Brook recommended installing movable barriers at the upper end of the East River, near the Throgs Neck Bridge; under the Verrazano-Narrows Bridge; and at the mouth of the Arthur Kill, between Staten Island and New Jersey. During hurricanes and northeasters, closing the barriers would block a huge tide from flooding Manhattan and parts of the Bronx, Brooklyn, Queens, Staten Island and New Jersey, they said.

Needless to say, this solution is insanely expensive: the stated price tag right now is $10 billion — well over $1,000 per New Yorker — and I’m sure that if such a project ever happened, the final cost would be much higher. And such barriers don’t last particularly long, either. London built the Thames Barrier in 1984, and there’s already talk about when and how it should be replaced. And building a single barrier across the Thames is conceptually and practically a great deal simpler than trying to hold back the many different ways in which the island of Manhattan is exposed to the water.

What’s more, there’s an environmental cost associated with barriers, as well as a financial cost. Which cuts against the kind of things which New York has been doing. They’re smaller, and much less robust. But they improve the environment, rather than making it worse. And they’re relatively cheap. For instance: installing more green roofs to absorb rainwater. Expanding wetlands, which can dampen a surging tide, even in highly-urban places like Brooklyn Bridge Park. Even “sidewalk bioswales”. (I’m a little bit unclear myself on exactly what those are, but they sound very green.)

Adam Freed, the outgoing deputy director of New York’s Office of Long-Term Planning and Sustainability, talks about making “a million small changes”, while always bearing in mind that “you can’t make a climate-proof city”. That’s a timely idea: we can’t make New York risk-free, and it’s not clear that it would make sense to do so even if we could. After all, as we all learned 11 years ago today, it’s impossible to protect against each and every source of possible devastation.

Other cities have similar ideas:

In Chicago, new bike lanes and parking spaces are made of permeable pavement that allows rainwater to filter through it. Charlotte, N.C., and Cedar Falls, Iowa, are restricting development in flood plains. Maryland is pressing shoreline property owners to plant marshland instead of building retaining walls.

Still, all of this green development does feel decidedly insufficient in comparison to the enormous risks that New York is facing. I like the idea of a “resilience strategy”, but there are still a lot of binary outcomes here, especially when it comes to tunnels. Either tunnels flood or they don’t — and if they do, the consequences can be really, really nasty. Imagine a big flood which took out all of the subway and road tunnels into Manhattan, or even just the subway tunnels across New York Bay as well as the Holland Tunnel. As such a flood becomes more likely, the cost of protecting against it with some big engineering work — insofar as such a thing is possible — becomes increasingly justifiable.

And this is just depressing:

Consolidated Edison, the utility that supplies electricity to most of the city, estimates that adaptations like installing submersible switches and moving high-voltage transformers above ground level would cost at least $250 million. Lacking the means, it is making gradual adjustments, with about $24 million spent in flood zones since 2007.

Lacking the means? What is that supposed to mean? New York City has a credit rating of Aa1 from Moody’s; ConEd has a crediting rating of A3. Interest rates are at all-time lows. There has never been a better time to invest a modest $250 million in helping to ensure that New York can continue to have power in the event of a storm. Doing lots of small things is all well and good, and I’m not convinced that the huge things are necessarily worthwhile — or even, in the case of moving people to higher ground, even possible. But the medium-sized things? Those should be a no-brainer right now.

This chart comes from Uber data geek (that is, a data geek who works for Uber) Bradley Voytek. You might recognize it from a blog post of Voytek’s from back in June, headlined “Building the Perfect Uber Party City”.

What Voytek managed to do, back then, was create two “stereotyped patterns” of Uber car usage, based on something called principal component analysis. The first pattern he called “Weekend Component”, and it’s the chart you see above. The second pattern he calls “Weekday component”, and it looks very different indeed. (You can see the two overlaid on top of each other at right.)

Just by looking at these two curves — the red and the blue — Voytek can account for 93% of the way in which demand for Uber cars fluctuates over time. Some cities and neighborhoods are more Weekday; other cities and neighborhoods are more Weekend. (Most, it turns out, are more Weekend than Weekday, at least when it comes to demand for Ubers.) But just about everywhere comes very close to being a mix of the two, rather than something altogether different.

And there are some neighborhoods which correlate very strongly with the weekend curve in particular: Voytek calls these the “party neighborhoods”. In his post, he picked out the most “weekendish” neighborhoods in each of Uber’s cities: North Beach in San Francisco, Soho in New York, and so on. But I was interested in the league table. So, via Voytek, here’s the top 50:

The Weekend Index, here, is the degree to which Uber usage in the neighborhood in question resembles the red line in Voytek’s chart. Obviously, it’s not all nights and weekends, but it’s skewed that way. Sunday nights are very slow, and then each successive night picks up a bit, and goes on a little bit later, until you get big peaks on Friday and Saturday nights. And across the board, nighttime usage is much heavier than daytime usage.

Voytek also sent me a list of the least “weekendish” neighborhoods that Uber covers. They’re pretty dull, as you might expect. What you might not expect is that the top six are all on the west coast. At the top of the list is Outer Richmond, in San Francisco, followed by Roosevelt and Madrona in Seattle, Visitacion Valley in San Francisco, Greenwood in Seattle, and Leschi in Seattle. Nowhere in New York or Boston or DC even makes the top ten.

The big league table, however, of the most weekendish neighborhoods, is fascinating — just because those tend to be particularly (to use a word that Thomas Frank hates) vibrant. These are the neighborhoods that other cities aspire to; they’re the areas that cause people to want to move to a city, and make them willing to pay high rents to live there.

And if you ever wondered what were the best and worst nights to go out, this Uber chart should answer your question very simply: the later you get in the week, the more crowded any given place is likely to become. That’s pretty intuitive, but it’s always good to see intuitions backed up with empirical data — and it’s easy to see why restaurants that close one or two days a week always choose Sundays or Mondays.

TomTom has released its first congestion indices today, comparing 31 cities in Europe and 26 cities in the US and Canada. (They call that North America, which is a bit disappointing, because I’d dearly love to see how Mexico City compares to other North American cities, and it’s not on the list.) The rankings are interesting, but even more interesting, to me, are the way that the rankings have changed over the past year.

Consider Edmonton, for instance: a town in the midst of a massive oil boom, where road construction can’t even begin to keep up with population growth. That was obvious back in September 2009, in the city’s transportation master plan:

As Edmonton evolves from a mid-size prairie city to a large metropolitan area, it is inevitable that congestion levels will increase, particularly during peak periods. Physical, financial and community constraints in many areas make it unfeasible or even undesirable to build or expand roads to alleviate congestion.

TomTom doesn’t give data as far back as 2009, but at least we can see what direction the city is moving in. Last year, Edmonton had a congestion index of 24%, which means that on average, travel times were 24% longer than they would take if traffic were flowing freely. That meant Edmonton was the 8th most congested city on TomTom’s list. This year, the Edmonton congestion index has plunged to just 13%, placing Edmonton 23rd out of the 26 cities, with an enormous decrease particularly during the evening rush hour:

I have no idea why traffic in Edmonton has improved so much over the past year; certainly I wouldn’t have been at all surprised if it had gotten worse rather than better. But the point here is that there’s an important stochastic element to congestion. Consider New York: in 2008, Mike Bloomberg proposed a congestion charge, which passed muster with city legislators but which was ultimately killed in Albany. Again, we don’t have data for what congestion was like in 2008. But between 2011 and 2012, congestion rates in New York overall fell from 23% to just 17%: a very impressive improvement. And today, New York is only the 15th most congested city on the list — behind metropolitan areas like Tampa, Ottawa, and San Diego.

What’s happened in New York to cause the drop in congestion? You can’t say higher gas prices, since those are a nationwide phenomenon, and don’t explain the drop in relative congestion. Plus, congestion in North America overall has stayed stable at 20% even as gas prices have risen. So if it’s not gas prices, what is it? Could it be all those bike lanes? Could it be that John Cassidy needs to eat some crow, and admit that bike lanes reduce congestion, rather than increasing it?

Perhaps: the jury’s still out. And maybe what we’re seeing here is more a function of random variation, and less a function of anything under the control of New York’s Department of Transportation.

What this report does tell me is that it’s going to be very difficult indeed to judge how effective any congestion-charging system is, just by looking at what happens to congestion after such a charge is introduced. I’m sure that if Edmonton had introduced a congestion charge at the beginning of 2011, the city would have claimed a huge amount of credit for the drop in congestion that resulted. But in fact, as we’ve seen, that drop in congestion would have happened anyway.

I’m planning to talk to the people at TomTom next week, and I’ll ask them whether they have any bright ideas when it comes to separating out causative factors for changes in congestion. In the meantime, we now at least have reasonably reliable league tables for the least pleasant cities to drive in. In North America, you want to avoid Los Angeles and Vancouver; in Europe, you want to avoid pretty much every major city. (Stockholm and London, with congestion charges, both have 27% congestion rates, putting them on a par with the very worst US cities.) But especially avoid driving in Warsaw, Rome, and Brussels. They’re even worse than LA.

Update: JCortright, in the comments, makes the excellent point that these numbers are much better at showing congestion changes within a city than they are at comparing congestion between cities. If you have a 45-minute commute in Atlanta, for instance, as measured on a congestion-free basis, and you’re stuck in traffic for an extra half an hour, then that’s 67% congestion. Whereas if you’re stuck in traffic for 15 minutes on a drive that would take you 15 minutes without traffic, that’s 100% congestion. So this methodology makes denser, smaller cities (like Europe’s) look worse.

On Thursday, I looked at the way in which cultural institutions tend to spend a huge amount of money on architecture, even if they would be better off spending that money more directly on their missions. In response, I got a fascinating email from a professor at NYU, asking me about its plan to spend some $6 billion on a hugely ambitious construction project — one which is fiercely opposed by local residents and NYU faculty.

The opposition is predictable, of course: Greenwich Village is as Nimbyish as communities get, and the professors who are railing against the plan are precisely the people who are going to suffer the most from endless construction work and ultimately the disappearance of the views and light many of them currently enjoy. But that doesn’t mean they’re wrong to oppose the plan. As we saw at Cooper Union, ambitious construction projects can be hugely damaging to colleges — especially ones which don’t have a large endowment to fall back on.

At Harvard, the empire-building of Larry Summers resulted in a disaster — but at least the endowment is huge enough that if Harvard loses $1.8 billion, it’s not the end of the world. At NYU, by contrast, the size of the endowment is significantly smaller than the budget for the university’s expansion. And as a result, the whole project is significantly riskier. If NYU ends up having to dip into its endowment to fund losses on this project, then that could be hugely damaging for an institution which is already under-endowed by the standards of most top-tier US colleges.

The situation at NYU Is, I think, the flipside of the saga we just saw at the University of Virginia. There, a popular president found herself at odds with trustees who had been successful in the private sector; at NYU, the faculty is similarly opposed to the plans of the trustees, but in this case the president is very much aligned with what the trustees want.

In both cases, it seems, the faculty seems pretty happy with the state and status of the university as it stands, and are looking for low-risk stewardship. The trustees, by contrast, are much more aggressive, and are looking for growth and full-bore engagement in the higher-education arms race known as Bowen’s Rule. Here’s how Howard Bowen put his five-point rule in 1980:

1. The dominant goals of institutions are educational excellence, prestige, and influence.
2. In quest of excellence, prestige, and influence, there is virtually no limit to the amount of money an institution could spend for seemingly fruitful educational needs.
3. Each institution raises all the money it can.
4. Each institution spends all it raises.
5. The cumulative effect of the preceding four laws is toward ever increasing expenditure.

On top of that, there are many New York-specific idiosyncrasies involved in the NYU plan. NYU is nestled in the heart of downtown New York, on some of the most valuable land in the world. That makes expansion insanely expensive, of course — but it also raises opportunities for a higher-education form of regulatory arbitrage.

New York has strict and recondite zoning laws, which are largely responsible for the value of any given plot of land. Take a site in Greenwich Village: if all you’re allowed to build there is a few townhouses, it’s going to be worth a fraction of its value if you’re allowed to erect a 40-story hotel. Every so often, zoning is changed, normally in the direction of allowing more development. When that happens, the people lucky enough to own the land in question make windfall profits.

This dynamic helps explain the way in which property developers are deeply enmeshed in city politics — and it also, I think, helps explain a lot of NYU’s behavior. NYU, quite aside from being an educational non-profit, is also the largest property developer in downtown New York. And with this plan, it’s trying to change the zoning for a lot of the Washington Square area in a way that will, if all goes according to plan, essentially drop a huge pile of money in the university’s lap. Hence the proposals for things like hotels and retail: they’re not allowed right now, and if they do become allowed, NYU fully intends to build such things and make substantial profits from them.

This isn’t a stupid plan. It makes sense, if you don’t have a $30 billion endowment throwing off huge amounts of cash every year, then you look for income in other places.

On the other hand, when a university turns property developer that’s decided mission creep — and it’s mission creep accompanied by billions of dollars in debt. Property magnates generally do really well for themselves — until they don’t. And here’s where you can see the cleavage between NYU’s trustees and its faculty. The trustees tend to be successful businesspeople — people who have had the requisite combination of risk appetite and luck that’s necessary to make lots of money. And rich people have another characteristic, too: they nearly always overestimate the amount of skill and underestimate the amount of luck which went into their success. Plus, they think that success is somehow infectious: if they’ve made their millions through levering up, then that’s probably a good strategy for the non-profits whose board they’re on, too.

On top of that, the president-and-trustee class of people has a natural tendency to want to build monuments to themselves, as well as a certain emotional detachment when it comes to empathy with other people. They’ve seen the plans: the architects have shown them glossy pictures of what Greenwich Village is going to look like in 2031, but they don’t really feel the amount of noise and pain involved in getting there from here. They don’t live in Washington Square Village.

And most importantly, they don’t need to rack up enormous student loans just to attend NYU in the first place. Here’s the chart, from the NYT’s excellent infographic on university tuition and student debt:

You can see from this chart that while there are lots of colleges which charge NYU-level tuition fees, NYU is among the very worst of them in terms of the amount of debt its students are burdened with upon graduation. That’s partly because it has a relatively small endowment, and therefore can’t offer the level of financial aid that, say, Princeton can; it’s also, of course, a function of the fact that New York is an incredibly expensive place for a student to live. But either way, if NYU cared about its students as much as it cares about its reputation, it would be searching hard for ways to decrease the debt they’re graduating with.

Instead, NYU is embarking on a building plan which will almost certainly, in one way or another, feed through into higher tuition fees and higher levels of student debt at graduation. After all, tuition fees are a hugely important source of income for NYU, and NYU is going to need all the income it can lay its hands on if it’s going to be able to pay off the loans it takes out to construct all these new buildings.

I’m no preservationist stick-in-the-mud: I think that cities need to evolve over time, and that if Greenwich Village had a bit more density, New York would cope just fine. I also carry no torch for things like “the acclaimed Sasaki Garden”, which turns out to be a bunch of concrete planters which are all but inaccessible to real New Yorkers. If NYU wants to replace that garden with something better, I’m all ears.

But I do think it’s worth asking some pointed questions about who exactly all this construction is supposed to benefit. It’s certainly not the current students, who will be long gone by the time it even gets started. It’s not the current faculty, whose lives will be disrupted and who are almost unanimously opposed. And there’s a strong case that it’s not future students, either, who will see even higher tuition fees and I’m sure won’t welcome the extra student loans they’re going to have to take out.

Universities will always have plans to expand — and indeed NYU already has campuses in no fewer than four different countries. Before embracing this particular plan, then, it might be worth looking at the history of previous university expansion projects, and asking whether they actually delivered on the promises they made at this point in the process. Because the costs of this particular project seem a lot more obvious than the benefits do.

Aditya Chakrabortty doesn’t like the Shard, the huge new skyscraper nearing completion next to London Bridge station, across the river from the City of London. It’s certainly a monument to the 0.01%: owned by the government of Qatar, and featuring Michelin-starred restaurants catering to guests at the five-star hotel; the hedge-fund managers who will rent out the office space; and of course the plutocrats in the 10 monster apartments (for sale at prices starting at $47 million or so).

Aditya’s not happy about this at all: the Shard, he says, “both encapsulates and extends the ways in which London is becoming more unequal and dangerously dependent on hot money”. The inequality point is inarguable, but it’s also inevitable, in any global financial center. And as for the dangerous dependence on hot money, that I’m less sure about.

Aditya cites “Who owns the City?“, a report from the University of Cambridge which shows that 52% of the City of London is now owned by foreigners, up from 10% in 1980. That’s a trend, not a hot-money capital flow: after all, the trend survived the financial crisis unscathed, even as property values plunged. He writes:

As the Cambridge team point out, the giddy combination of overseas cash and heavy borrowing leaves London in a very precarious position. Another credit crunch, or a meltdown elsewhere in the world, would now almost certainly have big knock-on effects in the capital.

I’ve read the Cambridge report, and I don’t really see them saying that at all. The closest they come is this:

For global financial office markets such as the City of London, functional specialisation not just in financial services but in internationally‐oriented financial services lock the fortunes of the occupier market to the state of the global capital markets; while growing international ownership and specialist global financial and real estate investment vehicles help to lock the investment and occupier markets together in a way that increases both upside and downside risk…

The locking together of occupier, investment, development and financing markets both within the City and across financial centres contributes to an inherent, systemic risk.

The point being made here, in less than crystal-clear language, is that the owners of the City are the same as the occupiers of the buildings in the City. Which means that if there’s a big bust in the world of international finance, the owners won’t just want to sell, they might well move out, as well — causing a double whammy to London office prices.*

But a reduction in London office prices is what Aditya wants! It would reduce inequality, and more generally it would provide a dividend of glossy and expensive real estate to a population which could never have afforded it on its own. That was Dan Gross’s point in Pop — while bubbles are bad for the people who invest in them, they’re generally good for the economy as a whole, which sees a lot of investment which would otherwise not have been made.

London’s a financial center, and like all other financial centers, it gets a lot of tax revenue from the financial industry. Come another credit crunch, that tax revenue will fall. But for the time being it makes sense to welcome the revenue, and the infrastructure improvements which international financiers are happy to pay top dollar for.

The fact is that new skyscrapers always cause an outbreak of nimbyish bellyaching. Here in New York, Christine Quinn, our probable next mayor, is refusing to come out and endorse a relatively modest addition to Chelsea Market, because although it makes sense from a city-wide perspective, the locals don’t like it. They never do.

But cities need density, and if they’re not going to degenerate into anachronism, they need big, expensive, modern skyscrapers. Especially if they aspire to being a financial center. Some of the criticisms of the Shard are just silly: the idea, for instance, that it somehow ruins the view of the Tower of London. What view of the Tower of London? You certainly couldn’t ever see it from London Bridge station, and in general the Tower is famous for being the least recognizable major landmark in London. I used to work as one of those tour guides on top of open-topped double-decker buses, for a summer, and I can assure you that long before the Shard was built, there was really nowhere you could get a good view of the Tower. Your best bet was to drive north across Tower Bridge, but even then the Tower itself just kind of shrinks into the riverbank, and a lot of tourists had no idea what they were meant to be looking at.

London is a city of large buildings on narrow streets (try finding the entrance to investment bank NM Rothschild one day), and the Shard is just the latest extension of that idea. I, for one, welcome it to the London skyline, even if I never set foot inside the place. It’s certainly a lot more interesting — and adds a lot more value to the city — than the bland mid-rise office buildings which Washington is doomed to, given its strict height zoning. Aditya’s right that the Shard hasn’t — yet — improved the lot of its immediate neighbors, but building nothing on that spot would hardly have been better for them.

I suspect that over time, the Shard will attract more money and gentrification to London Bridge in general, which is great news if your worry, like Aditya’s, is the area’s “deprivation and unemployment”. Cities are living things, and the construction of the Shard is proof that London’s still very much alive. And that, as Woody Allen would say, is definitely better than the alternative.

*Update: Colin Lizieri of Cambridge University writes to add that he was making another point, too: that diversification into office space in different financial centers is not really diversification at all, since the owners and occupiers of all that property are increasingly the exact same businesses, or at least very highly correlated ones.

It’s becoming something of a trend these days: good report, bad press release. The latest example comes from John Liu, the New York City comptroller, who is warning about New York’s bikeshare program. “LIU: BIKE SHARE PROGRAM PEDALS PAST SAFETY MEASURES” says the release (geddit?) — and certainly that’s the message received by the New York Times, which wrote up the news under the headline “Bike-Share Program May Mean More Accident Suits Against the City, Liu Warns”.

The report itself, by contrast, is much less alarmist, and mostly extremely sensible. Biking in New York is dangerous, for cyclists and pedestrians both, and it’s important to make it safer. Especially as thousands of new bikeshare riders are going to start wobbling their way around largely-unfamiliar streets. Here’s the scary chart:

The blue curve is the well-known safety-in-numbers effect: as biking becomes more popular, it also becomes safer. New York is an outlier here, and not in a good way.

Charles Komanoff has some on-point criticisms of Liu’s report, and if you read his report closely you’ll notice one big flaw in the chart. The x-axis shows bikers as a percentage of total commuters, while most bike trips in New York are not home-to-work commutes at all. If you included all New York cyclists, New York would have a higher ratio of cyclists, and fatalities per cyclist would go down. Put it this way: the chart is taking the total number of bike fatalities, and dividing it by the total number of bike commuters, rather than the total number of bicyclists as a whole. That results in low numbers for cities like Portland, where cyclists are much more likely to commute to work, and high numbers for cities like New York, where they’re much more likely to just be running errands, or shopping, or meeting friends.

That said, New York needs to become safer for cyclists and pedestrians both, and Liu has some very sensible proposals for helping it do that. The city should put a lot of effort into maintaing signage, bike lanes, and intersections, especially the most dangerous ones: the effect of that could be huge. It should expand the Safe Streets for Seniors program, which helps older New Yorkers navigate safely around vehicles of all types. It should educate bikers and drivers both on bike safety and the rules of the road; drivers in particular should look out to make sure they don’t cut in front of cyclists when making a turn, and also leave extra space when passing a cyclist just in case the biker has to swerve around a pothole.

The recommendations continue: kids should get taught bike safety at an early age. The “5 to ride” pledge should be promoted to all businesses with bike messengers or delivery people. There should be more police on bikes, and they should start handing out tickets to cyclists speeding through red lights or dangerously salmoning. On top of that, they should start ticketing cars and vans in bike lanes. And just generally be tougher on traffic. As the report says:

New York’s roads are an interactive, multi-modal system; increased enforcement from any surface modes will increase safety across all other modes. Through greater enforcement of speed limits and greater traffic signal compliance, the roads will be safer for all users.

Liu also wants to beef up New York’s overworked and largely ineffective Accident Investigation Squads; that’s a great idea. And he wants to collect lots of data on biking in New York and make it public. Which is a no-brainer.

Liu is also pushing to make helmets mandatory; I’m not such a fan of that idea. For one thing, I have yet to see any empirical data showing that mandatory helmets increase safety. And in general, insofar as a mandatory helmet law would reduce the number of cyclists, it would also reduce the safety-in-numbers effect. And as the chief fiscal officer of New York, he’s worried that increased biking might mean increased liability in terms of settlements paid out by New York City to injured cyclists. That worry seems small to me: as Komanoff says, the number of new cyclists will only increase the total by about 6%, and the $10 million of insurance that the bikeshare program has is much bigger than the $2 million to $3 million that New York has paid out annually in the past three years.

Overall, however, I’d say that the report is a very positive thing. And in that it stands in contrast to the press release, which quotes John Pucher of Rutgers University as saying that he “would expect at least a doubling and possibly even a tripling in injuries and fatalities among cyclists and pedestrians during the first year of the Bike Share program in New York”. I’ll happily take that bet: it’s ridiculously alarmist, such a rise hasn’t happened in other cities with bikeshare programs, and no such projection is made in Liu’s report. Liu also wheeled out the media-relations guy from AAA New York, of all people, to say that the best way to prevent cyclists incurring serious injuries is to force those cyclists to wear helmets. That’s just depressing: one would hope that a car-drivers’ organization might at least pay lip service to safer driving, rather than putting the onus entirely on the bikers.

I’m very excited about New York’s bikeshare program, and look forward to using it regularly. I hope that the increase in the number of cyclists will help bring a bit more civility to New York’s biking community, especially in terms of stopping at lights and riding in the right direction. Meanwhile, my biggest fear is that we’ll see the opposite: a bunch of people who have no idea what they’re doing, riding on sidewalks, salmoning, and generally causing chaos. I don’t think that’s probable, but it’s possible, and I look forward to Citibike and NYC doing everything they can to prevent it from happening. As they do so, Liu’s report — if not his press release — is likely to be quite helpful.

Last year, I expressed some skepticism that Washington’s Capital Bikeshare program would have much if any success in getting the unbanked on bikes. And according to Capital Bikeshare’s latest member survey, it seems that I was right:

Out of 5,157 bikeshare members surveyed, all of them had been to college; 95% had graduated; and more than half had graduate degrees. Assuming that most of the 5% with “some college” are current undergrads, I think it’s fair to say that this is a very well educated demographic, and very much not the poor or unbanked.

The people at Reason think this chart is grounds to stop subsidizing the bikeshare program altogether, which is silly: the government subsidy for bikeshare is basically a rounding error in the grand transportation budget, and I’m sure that the amount of government funds spent on maintaining roads in affluent suburban communities is orders of magnitude greater than the amount spent on bikes.

But it definitely seems to be true that the Capital Bikeshare scheme has done very badly at reaching the poor, the unbanked, and people of color. (Bikeshare’s membership is 79% white, in a city that’s 34% white.) Bikeshare’s most successful membership drive came from a deal at Living Social, which reportedly almost doubled Bikeshare’s membership; it’s fair to say that Living Social’s Washington email list probably skews white as well. But the deal does demonstrate, I think, that price matters: drop the membership fee, and membership rises. Which is something New York should pay attention to.

Or, to put it another way: there are surely hundreds of reasons why well-educated whites flock to bikeshares while blacks who haven’t been to college avoid them. But cost is surely very high up on the list. And so if you want your bikeshare program to be broadly adopted across social classes, it’s a really good idea to make it cheap.

Update: Thanks to WashCycle for paying more attention to the survey methodology section than I did. This member survey, it turns out, is not representative: members were solicited for their responses only via email, and the only way that you could take the survey was online. Which might well explain a lot. Also, the survey took place in November, before the scheme to enlist the unbanked went live. Apologies for missing both of those things, and well done to WashCycle for picking up on them. Let’s just say there’s no disclaimer anywhere in the survey that its results are not representative of Capital Bikeshare’s membership as a whole.

My latest video, above, is a reprisal of my blog post about variable pricing, and why it’s a great thing. The insight here is that pricing for a product like Broadway tickets is not the zero-sum game that it might seem at first glance. Yes, the more money that theatergoers spend, the less money they’re left with, and the more cash flowing into the pockets of New York’s performers and producers. (Which, incidentally, is quite the racket: one day I want to write a post about how theater producers get to effectively charge their investors 4-and-50, way more than the 2-and-20 we see in the finance world.)

But if you look beyond that initial dynamic, there’s much more going on here. By perfecting the art of variable pricing, Broadway manages to minimize the number of ticket scalpers, and therefore keep more money in its ecosystem. It manages to sell out every show, which just feels great. And it a means that there’s nearly always a ticket available for any show you want to see. That convenience alone is worth a lot.

The masters of variable pricing, of course, are the airlines, and while people are often resentful that they paid five times more for their ticket than the person sitting next to them did, the fact is that they would be much more resentful if they regularly tried to buy air tickets and found that all the flights were sold out. And conversely, of course, the airlines would lose even more money if they regularly wound up flying half-empty planes. Without variable pricing, one or the other would certainly happen.

In New York, as we’ve seen, Broadway is great at variable pricing, while the Yankees and the Metropolitan Opera are still in the pricing dark ages. But there’s one much more important area of New York life which is in desperate need of variable pricing: on-street parking.

San Francisco recently introduced variable pricing for on-street parking, and it’s an idea which ought to have been implemented in New York years ago. The basic idea is incredibly simple: you just price parking meters so that there’s always one empty parking spot on every block. The effect is electric, for two reasons. Firstly, drivers no longer have to pad their journeys by some unknowable amount of time to account for the time spent looking for a spot. And secondly, the whole city speeds up, since a huge proportion of congestion is caused by cars driving around in circles, looking for one of those precious spots.

Which brings me to Matt Taibbi’s latest tirade, complaining about the idea that New York could raise as much as $11 billion by selling off its parking-meter rights. Anybody who wins this contract will have a contractual obligation to implement smart variable-pricing technologies, which will have to include apps showing where the spots are, the ability to pay by phone, and other ways of making everybody’s life easier. How is this not a good thing? Well, Taibbi’s upset that prices will rise:

Meter rates in some New York neighborhoods are already at $5 an hour. A Chicago-style price hike for fat-cat investors might leave us paying thirty bucks an hour to oil barons in Qatar and Saudi Arabia in order to park for dinner in the West Village.

I hate to break this to Matt, but has he seen the pricing at New York’s garages recently? Drivers would kill for the opportunity to pay $5 an hour. Matt lives in Westchester Jersey and therefore doesn’t pay New York City taxes, but he still seems to think that New York City should subsidize the cost of his jaunts in to the West Village for dinner. But even if Matt were somehow deserving of such a subsidy, which he isn’t, it’s a false economy: it might feel good to be able park for cheap, but it feels much worse to be stuck in traffic all the time. And the overwhelming majority of West Village diners manage to find a way of eating there which doesn’t involve a parking spot. Why should they subsidize Matt’s parasitical suburban lifestyle?

New York is not Chicago, where the mayor was forced to give up all control of the parking meters in order that prices might be able to rise to their optimal level. Instead, the city will retain control of pricing philosophy, holidays, and the like, while also receiving an enormous check.

A huge amount of good could be done with that $11 billion, both in the West Village and in the rest of New York. Even Matt, if he puts his mind to it, could probably think of quite a few areas where New York needs to beef up its infrastructure, both in terms of transportation and in terms of everything else. These are investments, which will pay off over the long term, and the rate of return on these investments is almost certainly going to be higher than the discount rate which the private sector is willing to pay right now for parking-meter revenues.

The fact is that right now is the best possible time for New York to sell off its parking meters. Matt says, with no backing whatsoever, that the meters will be sold “at a steep discount”, and that New York will only get “pennies on the dollar”. The truth of the matter is much more likely to be exactly the other way around: that by doing the deal now, when interest rates are at all-time lows, New York will be able to capture an impressive premium for these future revenues — while at the same time outsourcing all of the risks and difficulties associated with bringing parking meters into the 21st Century.

It’s not easy for New York City to borrow money, for various reasons. The city should be borrowing and investing right now, for all the same reasons that we need a second stimulus nationally. You don’t want to invest during a boom, because that’s expensive and pro-cyclical. You want to invest when interest rates are low and labor is more readily available. And by selling off its parking meters now, New York will have access to billions of dollars at extremely low interest rates.

If those oil barons in Qatar and Saudi Arabia are willing to send $11 billion to New York in return for future parking-meter revenues, I’d be inclined to take their offer with no little alacrity. $11 billion, if you do the math, works out at more than $120,000 per meter. Taibbi really thinks that’s a discount to the meter’s real value? How much would he pay for a parking meter?

The fact is that New York, like most cities, is bad at monetizing the value of its on-street parking. This deal gives the city the opportunity to change that, and at the same time to introduce technology which could reduce congestion substantially, while also raising billions of dollars for investment in the city’s future. It’s a win-win-win. Except, maybe, for commuters in Westchester Jersey.

Update: Matt responds, explaining that he actually lives in Jersey, not in Westchester. Sorry. He also says:

If prices do rise, some conglomerate of private investors, and not the citizens of New York, will see the benefit. The city might get $11 billion in the deal, but if that’s even a dime less than the real present value of these parking meters (to say nothing of the actual amount of revenue that will be collected over the life of this arrangement), then to me that’s bad and shortsighted public policy.

By this logic, then if $11 billion is a dime more than the real present value of the parking meters, then the privatization would be a good idea. And with interest rates where they are, and the way that cities are evolving, I’d guess that the present value of New York’s parking meters is more likely to fall from $11 billion than it is to rise.

When I wrote about New York’s expensive bikeshare scheme last week, I got a lot of pushback from people saying that I was missing the point. These bikes are designed for short trips around town, at a marginal price of zero: the large sums you pay if you keep them checked out for an hour or more are a deliberate attempt to discourage that behavior.

OK, fair enough — but in that case, if you’re charging high variable costs, the converse should be that you should charge low fixed costs. Most bike schemes work in much the same way: you pay a certain amount up front for membership, be it for a day or a week or a month or a year, and then the variable per-hour costs on top of that. If New York’s bikeshare scheme is indeed quite cheap, then one would expect the variable costs to be low.

But they’re not.

Ben Walsh put together some numbers for me, for various cities around the world with bikeshare schemes. Not all cities work in exactly the same way, and some have no direct comparison points with New York at all: in Chicago, for instance, the membership options are 1 month, 2 months, and 3 months. In any case, here’s what we managed to find, for New York’s three options:

It’s pretty clear that New York is at the top end of the range, here: only Frankfurt rivals it in price. To have access to New York’s bikes for one day, you need to spend $9.95 — that’s more than six times the £1 one-day membership in London, and it’s significantly more, too, than you’d pay in Washington or Toronto or Paris.

The first reaction of New Yorkers, when they hear this, is surprisingly positive: they think of it as a tax on tourists, and everybody likes taxes on tourists. Let the tourists pay through the nose for their one-day memberships, and we locals will save loads of money, through an implicit cross-subsidy, on our one-year memberships.

But that doesn’t seem to be the case, either. Look at the cost of one-year memberships, and New York is still top of the league table, at $95. That’s the same as Toronto, and more than seven times what Romans pay. (Indeed, the one-time membership fee in Rome, at €10, is barely more than a daily membership in New York.)

New Yorkers, then, are being asked to spend much more money per year than bikeshare users in just about any other major city — even if they never take out a bike for more than 45 minutes. And what worries me is the deterrent effect that these prices will have.

The first trip you take, on one of the new New York bikes, will cost you at least $10, and possibly as much as $95. Cab rides don’t cost much more than that, and you can fit four people in a cab. Experienced urban cyclists like me will definitely cough up the $95, even if that hurts a little, because we know how convenient it can be to be able to take one-way bike trips in Manhattan, especially if it’s going to rain later, or if you don’t like biking back in the dark, or if you got in to work on the subway but then just need to go a mile or so to your lunch meeting.

But the great promise of the bikeshare scheme is that it will get people onto bikes who have never biked before — people who are generally very nervous about biking at all on busy urban streets. Those people are going to want to try before they buy, and the $10 cost of a trial one-day membership is high enough to give them a good excuse not to bother.

The East River Ferry is a great example of the benefits of low entry costs and the opportunity the city’s bikeshare program is missing. When the ferry was reintroduced last June, it was free for the first 12 days. Passengers flocked and even once full fares kicked in, it remained far more popular than planners projected.

That said, from a user’s perspective there are two costs worth considering before you opt into one of these schemes, and the dollar cost is only one of them. The other one is convenience — and on that front, New York’s 10,000 bikes look as though they’re going to be everywhere you might want one, so long as you stay south of 60th Street; there are even a few docking stations in Queens! In that respect, getting on a bike is (fingers crossed) going to be much easier in New York than in most other cities — and I can definitely see how that convenience might be worth paying for.

I don’t think the pricing for these bikes is going to cause the plan to fail: New Yorkers are used to paying lots of money for convenience. I just wish there were some cheaper way of getting New Yorkers to try these things out. Because $95 is enough money — roughly the same as an unlimited monthly transit pass — that a lot of people will simply not bother.

New York’s new bike-share program, sponsored by Citibank to the tune of $41 million (plus $6.5 million from MasterCard), will go live at the end of July, and the prices are public already. Transportation commissioner Janette Sadik-Khan called them “the best deal in town short of the Staten Island Ferry.” Which, not really.

The Staten Island Ferry is free, of course, but that aside, New York transportation has a very simple pricing scheme. To a first approximation, all rides, whether on the subway or the bus or some combination of the two, are $2.50, no matter how long they are.

And the bikes cost a lot more than that.

As with all bike schemes, there’s a base price to enter the scheme — $10 per day, $25 per week, or $95 per year. Then the first half-hour of bike riding is free (45 minutes if you’re an annual member); after that, you pay on a per-ride basis as well, starting at $4 when you bike for more than half an hour.

The $10-per-day cost is already a significant expense: that’s four subway rides right there. And then the hourly charges really start to rack up if you keep the bike for some length of time. If you take the bike around Governor’s Island, for instance, and stay there for a couple of hours, you’re likely going to end up in the 3-hour time bracket, which is $49. On top of your $10 daily rental. As Garth Johnston puts it, for any real let’s-bike-around-the-city plans, you’re definitely going to be better off just buying your own bike.

What’s more, New York is significantly more expensive than similar schemes in rival cities like Washington and London. Here’s a chart of the cost of one trip, based on a 24-hour membership:

London’s 24-hour membership is just £1, or $1.61, and the cost for the second half-hour is only another £1. Which means that anybody can get on a bike, ride it for an hour, and pay just £2 — less than the cost of a journey on the Tube. In New York, by contrast, getting on the bike costs $10, and then the second half-hour costs another $4, for a total of $14. That’s more than four times the cost of the London bike. By the time you’re on the bike for 90 minutes, the New York cost goes up to $23; you’d need to be biking twice as long to pay that much in London.

Here’s the full chart, going out to the maximum charge for 24 hours:

As you can see, none of these schemes are exactly friendly towards someone just taking a bike and using it to bike around for, say, six hours. But if you do that in London, you’ll “only” pay $58: in Washington, it’s $85, and in New York, it’s $131.

I can’t think of any other area where London is so much cheaper than New York: it’s just weird to me that New York would set the prices for this scheme so high. Maybe the problem is that they haven’t found a lot of places to put the docking stations, so they’re having to set the price high to keep the demand in check. All we’ve been told so far is that the plans for the docking stations will be available “soon”; it’ll be fascinating to see how many of them there are in the first instance.

But one thing’s sure: the price difference between renting a bike and hailing a cab is very small in New York, while it’s very large in London. Which probably makes cabbies very happy, while doing very little to reduce congestion.

Everybody’s favorite transportation geek, Charles Komanoff, has a fascinating new paper out on the economics of New York’s new Tappan Zee Bridge. The old bridge is decrepit, and needs to be replaced — everybody agrees on that. And the replacement is now in the works, at a cost of $5.2 billion. But does it need to cost that much? Komanoff makes a strong case that it doesn’t.

I won’t try to summarize Komanoff’s paper here. Instead, I’ll just point to one fact which is buried there. The new bridge comes with a combined bike/pedestrian lane, 12 feet wide. And the cost of building that lane — the amount that the cost of the bridge would decrease if you simply built it without that lane — is an astonishing $400 million.

To put that number in perspective, Komanoff tells me it would cost roughly $40 million, in the same 2015 dollars, to build two bike/pedestrian lanes on the Verrazano Narrows bridge — lanes which would get vastly more traffic than the one lane on the new Tappan Zee.

As for the cost of the first three years of New York City’s ambitious bike program under transportation commissioner Janette Sadik-Khan, that was just $8.8 million, 80% of which was paid by the federal government.

In other words, for the $400 million which governor Andrew Cuomo is planning to spend on a white-elephant bike lane almost nobody is going to use, you could utterly transform the bicycling infrastructure for millions of New Yorkers in all five boroughs.

Oh, and I almost forgot — it looks as if the old Tappan Zee bridge is going to be converted into a bike/pedestrian walkway anyway, making such a facility on the new bridge even more superfluous.

But this is how big projects always work: it’s weirdly easier to raise billions for something huge than it is to add millions to an annual budget somewhere. “Gridlock” Sam Schwartz, for instance, in his clever new congestion-pricing plan, is proposing three new massive bike/pedestrian bridges: one from Jersey City and Hoboken, in New Jersey, would span the Hudson River and land just north of Chelsea Piers. A second would go from Long Island City and Hunter’s Point, in Queens, and would cross the East River to midtown Manhattan. And the third, and most ambitious, would start in Red Hook, in Brooklyn, head over to Governor’s Island, and then continue on to the Financial District.

These are utterly wonderful ideas. If beautiful new pedestrian bridges can be built by Santiago Calatrava in Venice or by Norman Foster in London, there’s no reason New York can’t follow suit. Still, it’s a bit depressing that we don’t seem to have the mechanisms to take the billions available for vanity projects, and use some small fraction of that money for things which would make a huge difference to the daily lives of millions of New Yorkers.

This phenomenon isn’t confined to government, of course: anybody working in a big corporation has seen some huge acquisition made, using money which was never available for smaller projects from existing teams which had much clearer benefits. And there are hundreds of museums around the world which never have money for important things like conservation, but which somehow manage to find enormous sums for glossy new starchitectural projects. Basically, people want to be able to see where their money is going, in the form of something large and grand and headline-grabbing. Even if there are much more sensible uses for it elsewhere.

Many thanks to Mark Bergen for finding me this data; I asked him for it because I thought that maybe we could learn something from the way in which China has managed to keep employment growing steadily through some extremely turbulent economic times.

What you’re looking at here is total Chinese employment from the All China database. Primary industry is commodities, basically, including agriculture; secondary industry is manufacturing; tertiary industry is services.

It comes as little surprise to see that agricultural employment has been falling steadily for 20 years. But it is surprising to see that if you take out the services sector, total Chinese employment has been going nowhere, and basically falling, for the same amount of time.

Caroline Baum, using a different data source, says that China lost 15 million manufacturing jobs between 1995 and 2002; according to these figures, employment in “secondary industry” was flat in those years, going from 156.6 million to 156.8 million before starting to rise again and reaching 218.4 million in 2010. (It’s worth pausing here to appreciate the sheer scale of this chart: each horizontal line is another 100 million workers.)

Meanwhile, the services industry — tertiary industry — has been on fire: it now employs 263 million people, more than are employed in secondary industry, and has doubled since 1992. All this, remember, in a country with more or less flat population growth, thanks to the one-child policy.

Of course it’s hard to find work in the services industry if you’re a rural peasant: tertiary industry is a fundamentally urban thing, which brings me to my second chart.

It comes as no surprise to see that urban employment is growing incredibly fast — 13.7 million urban jobs were created in China in 2010 alone. What does come as a surprise is to see that urban jobs are still in the minority in China — which means that there’s a lot of room for growth going forwards.

In the U.S., we had a huge construction boom in the aughts, which was concentrated on building bigger suburban and exurban residential houses. That’s good for homebuilders and makers of granite countertops, but it doesn’t really boost the economy more broadly. The Chinese construction boom, by contrast, is building cities and roads and crucial infrastructure, which allows the service economy to keep on growing at a torrid place.

Realistically, there is very little chance that global manufacturing employment is going to increase in future at a rate which will provide jobs for a growing global population. If we’re going to find jobs in the U.S. and the rest of the world, they’re going to have to be found in exactly the area where China is finding them — tertiary industry, or services.

How do you create service-industry jobs? By investing in cities and inter-city infrastructure like smart grids and high-speed rail. Services flourish where people are close together and can interact easily with the maximum number of people. If we want to create jobs in America, we should look to services, rather than the manufacturing sector. And while it’s hard to create those jobs directly, you can definitely try to do it indirectly, by building the platforms on which those jobs are built. They’re called cities. And America is, sadly, very bad at keeping its cities modern and flourishing. 1950s-era suburbia won’t cut it any more. But who in government is going to embrace our urban future?