Cuomo’s Toll Plan is a Give Away to Billionaire Investors

On October 6, 2016, New York State Governor Andrew Cuomo announced an ambitious plan to eliminate toll collection at New York Bridges and Tunnels throughout New York. Touting the advantages of electronic tolling as good for commute times and the environment, Cuomo apparently has not told the full story. The Governor's plan for electronic toll billing is a maneuver that will siphon NY toll money away from the State and into the pockets of billionaire investors. It is another example of privatization, financialization and de-unionization of public services.

A report compiled in 2013 for the Triborough Bridge and Tunnel Authority, the authority that manages NYC bridges, highlighted the fact that toll revenues increase year over year. In 2013 alone, 83% of the $1.6 million of toll revenue was through the E-Z Pass toll collecting system, which is currently administered by Xerox Business Solutions. It is hard to find accurate data about exactly how much of NY toll revenue is funneled to Xerox because the transportations authorities do not disclose the details of the contract with the public, but in 2010 it was reported to be over $200 million for a multi-year deal. The new agreement with the State is likely to be over the $500 million mark for a multi-year contract.  Cuomo’s announcement of toll less billing coincides with a new deal between NY State transportation authorities and Xerox.    

Cuomo’s move to expand to 100% electronic toll collection equates to the privatization of the toll collection system. Historically tolls were collected by MTA, Port Authority and Triborough Bridge and Tunnel personnel; workers at these authorities are state employees. The transfer to electronic toll collection will signify the transfer of both toll revenue and labor force from the public sector to the private sector

De-unionization follows the shift from public to the private sector. The workers who traditionally collected tolls for the State belonged to unions and experienced decent livelihoods in New York. However, the rise in the use of the E-Zpass system, a system managed at a call center and several walk-in centers sprawled throughout the State, is replacing good union jobs with low-wage, nonunion jobs, and the work conditions are horrendous. The series of Companies that took ownership of the system, most recently Xerox and soon to be Conduent, has taken an aggressive anti-union approach in the face of Call center workers seeking to better their work conditions. The company has hired an out of state union avoidance specialist that has successfully kept the employee’s union at bay. They have continued to use this consultant during current contract negotiation with the workers.

Carl Icahn, the hedge fund billionaire, forced the split of Xerox Business Solutions by leveraging his investment power into a controlling stake in Xerox. The new company, Conduent, will manage NY E-ZPass system starting in 2017.  There is a good reason for Icahn to invest in the toll system.  The business looks attractive to an investment company because revenues rise annually, toll collecting is now a monopoly and the labor costs are low. 

The financialization of the toll collection system will allow the privately held investment company to squeeze profit out of the transportation system by pressing down labor costs and avoiding  customer needs. For example, the drive towards earnings rather than capital investment into the transportation system will conflict with customer care because there is constant pressure for customer service representatives to be faster in dealing with their clients. Furthermore, the profits could have been used to lower toll rates for consumers rather than make millions for investors. Lastly , the profits squeezed out of the system could have been used for infrastructure.

Now the MTA is proposing toll hikes at the VZ bridge and fare increases on buses. The rising transportation costs will hurt the workers at E-Zpass in two ways. First, the toll hikes are going to raise profits more than incomes. The company uses union avoidance consultants to resist the workers attempts to increase their wages and benefits. Second, the workers at E-Zpass rely on public transportation in large numbers. An increase in bus fares and the inability to raise their wage hurts these workers double.  Toll revenue should be for updating transportation infrastructure, reliable service for the public and dignified employment for call center workers and not funneled into the pockets of billionaire investors.

Submit public comments to MTA regarding 2017 toll hikes here: http://mta-nyc.custhelp.com/app/hearings/comment/h_id/24