Why Tokyo's Metro Is Profitable and New York City’s Isn’t | WSJ U.S. vs. Japan

(light music) - [Narrator] Japan's train system ranked by Statista is the most efficient in the world. The U. S.

though is far behind. It's tied for 11th best. Roughly 15 million people ride the subway each day in Japan's capital city, around 11 million more daily riders than New York subway.

We compared the Tokyo and New York subways to find out how Japan's rail system got so far ahead of the United States. Take a look at this map of New York City subway system. Now, compare that to Tokyo's map, a key distinction where the public transit connections intersect.

In New York, public transit commuters into Manhattan likely only have these options to disembark. Japan's map has more points of connection. - What's really distinctive about Tokyo and actually Japanese cities more generally is they all interconnect.

- [Narrator] Commuter rails connect directly with city subway tracks, which reduces congestion and unnecessary transfers. - If you just ride the train all the way out to your final destination, you don't have to be paying attention to your transfer station. You just fall asleep and you know when you're gonna wake up near your station.

- [Narrator] These easy commutes are key for the 2. 4 million people traveling into Tokyo daily from outside the city. On top of that, Tokyo Wides only need one of two cards to pay for most public transportation systems, not just in the city, but also in many parts of Japan.

And in New York- - You have to often have a different card to get on any of the ridership system. It's not like an integrated pay system or governing system. - [Narrator] So you have to use all these different tickets to ride the public rail systems.

In some cases, these separate rail systems are the result of different jurisdictions that oversee transit. The subway, for example, is owned by the city and leased to the Metropolitan Transportation Authority, better known as the MTA, which in turn is controlled by the New York State government. And New Jersey Transit, which connects to New York City, is run by the New Jersey Department of Transportation.

While New York doesn't have fully integrated public transit connections, some aspects are improving. First is payment. - We now have the ability to pay with a credit card when you go into a subway, so you don't have to have a special metro card, which will be made obsolete eventually.

I think the goal is to eventually have one fee in one rail system, and that will pay you through all of it. - [Narrator] Then there's the profitability. Other than in 2020 and 2021, during the COVID-19 pandemic, Tokyo Metro, the largest subway company in the city, has been profitable.

Compare that to the MTA, which historically operates at a loss. Its outstanding debt is forecast to hit $47 billion by 2026. A key reason for this difference, central government funding.

Japan heavily invests in public transportation. The national government owns about 53% of Tokyo Metro, and the Metropolitan Government of Tokyo owns about 47%. - After the second world war, there was a continuous investment in the public transit system, which is primarily the subways, the JR system, and the private commuter rail systems that all interconnect.

There's never been a let up in continued investment in adding lines and making them work better. - [Narrator] The MTA, on the other hand, is not owned by other private companies. Its funding comes from multiple places, including taxes, the city and state governments, and some federal funding.

The MTA also makes money by selling bonds. - It's one of the top issuers of municipal bonds in the entire U. S.

- [Narrator] One of the largest buckets of funding for both the New York and Tokyo Subways comes directly from riders. In Japan's capital, companies have flexibility to charge more. - It's all fair by distance, so you get your fair at the end.

- [Narrator] So depending on which system you take, the cost for riders can be anywhere from 170 to 430 yen, which converts to about $1. 27 to $3. 22.

The main New York subway fares are flat, though the LIRR and Metro North prices vary by zone. - Right now, about 40% of the MTA's funding comes from the fare box, from what the riders pay to ride. That number has gone down a lot, which is why we're redoing the funding model.

- [Narrator] Because many white collar workers have worked from home since 2020, there have been less riders and thus less revenue. This has worsened the MTA's financial situation. To help fill the funding gap and account for inflation, prices will increase slightly from $2.

75 to around $2. 86 later this year. In Japan, public transportation has a reputation for being staunchly on time.

In 2017, one commuter rail connecting Tokyo to Tsukuba famously apologized for having a train leave 20 seconds early, but the Tokyo Subways can face some hiccups. Tokyo Metro post delays from the past 35 days. In April of this year, several train lines were running about 10 minutes late.

In New York City, delays are common. In 2022, New York City passengers waited an average of an additional 64 minutes on platforms cumulatively each month, as well as an extra 18 minutes on the train. But the MTA says that's an improvement.

- We have right now the best on time performance of our subway system in over 10 years. It may not be up to Asia's standards, but for New York, it's really a great step in the right direction. We have an old system, so there are things that go wrong mechanically.

You have a huge system of switches and interlocking, which require a ton of maintenance. - [Narrator] Japan's history of investment in public transportation gives Tokyo the upper hand for its rail system. - It would take years, if not decades, of very significant investment in the New York subway system for it to match the levels of efficiency as the Tokyo subway system because they've been working hard on that for the last 60 years.