London Needs the Tube and the Tube Needs Londoners
(Bloomberg Opinion) -- As the coronavirus pandemic continues, Bloomberg Opinion will be running a series of features by our columnists that consider the long-term consequences of the crisis. This column is part of a package on the future of transportation. For more, see Lionel Laurent on how public transportation can spark urban recovery and David Fickling on why passengers will pay the price for the airline industry’s troubles.
Recently, I caught myself waxing nostalgic about the daily journeys on the London Underground that I abandoned just before lockdown. Only a few months ago, I was that middle-aged woman inching onto an indecently crowded commuter carriage, stuck for what seemed like an eternity under some tall person’s sweaty armpit, gripping a germ-covered pole as the car rumbled and jerked through a dark tunnel. Overcrowding and ear-splitting noise levels on the Tube made some journeys torture. There are laws against animals crammed so tightly into an enclosure.
Even so, I miss it. My trip on the Tube had served both to separate work and home spaces and bridge them. The commute provided time to scan a morning newsletter or listen to a podcast. I could be lost in thought, buried in my phone or take in a visual smorgasbord of pinstripe suits and body piercings. Its familiar rules and conventions — the command to Mind the Gap, the way commuters always stand on the right of the escalator — were woven into the fabric of my day.
The financial viability of cities rests on whether and under what conditions we are prepared to go back to our old travel habits. Since the start of the pandemic, urban dwellers have increasingly turned to buses, bicycles and scooters rather than venture back underground. Yet for all of their flaws, subway systems are the economic and social lifeblood of densely populated cities. Vast commercial ecosystems thrive around mass transit stations — from restaurants and shops to theaters and other small businesses that serve workers and visitors who move through the city. It’s impossible to imagine urban life returning to normal without them.
Nowhere is that more true than in London. Before the pandemic, more than 4 million people a day, or 1 billion a year, used the London Underground, the world’s oldest subway system. The Tube has been a symbol of British ingenuity and the Enlightenment value of individual freedom. When it served as a shelter during German air raids in World War II, the Underground became synonymous with English resilience. Harry Beck’s iconic 1931 multi-colored Underground map — ubiquitous on tea-towels, mouse pads, boxer shorts and most everything else — is genius not just because it makes getting around London so easy, but because it shaped how Londoners see and experience the city.
Now an underground system that has defined the life and character of a city since 1863 is edging toward a financial abyss, as social distancing and home-working become the new norm. Saving the Underground is also caught up in larger political debates over what to prioritize as parts of the economy sink. How those questions are resolved will go a long way toward determining not just London’s economic future, but the shape of post-Brexit society.
More than most other subway systems, London’s metro relies heavily on fares to support its operations. Since the start of the lockdown, as businesses ordered employees to work from home and use of the Underground was restricted to essential workers, ridership has plummeted. Transport for London — the government body responsible for the Tube — has seen its income drop by 90%.
TfL oversees not just the Tube, but London’s vast bus network, its overground train lines, roads, cycle hire scheme and more. It employs some 28,000 workers (and many more indirectly). Just over a month into lockdown, it faced a funding gap for 2020-21 of over 4 billion pounds ($4.41 billion).
There is no easy way out of this. The body, which is required by law to have a balanced budget, is limited in how much it can borrow and has already taken on a lot of debt to fund various capital projects. In April, 7,000 workers, a quarter of its workforce, had been furloughed; construction work was frozen.
In May, with TfL within hours of running out of money, Boris Johnson’s conservative government extended a 1.6 billion pound bailout package, a mix of grants and loans (with the possibility for further funding of up to 1.9 billion pounds). Rescuing the capital city’s iconic mass transit system might seem like a no-brainer for the prime minister, who was a major champion of the Tube when he was London mayor. In those pre-Brexit days, he triumphantly accepted a 1 billion pound loan from the European Investment Bank to fund Crossrail, Europe’s largest infrastructure project and the biggest change to the London Underground schematic since Victorian times.
But Johnson won an election on a pledge to rebalance Britain’s economy away from London, which has received the lion’s share of public investment for years. Complicating things further, London mayor Sadiq Khan is a prominent Labour Party figure who has criticized Johnson’s record as mayor.
Tube funding has long been contentious, and the Conservative government was not going to hand anything to London without strings attached, even if the party no longer advocates privatization of the network. In exchange for the package, two government officials were put on TfL’s board and key committees. The government also forced Khan to renege on his pledge not to increase fares. In the end, he had no choice but to accept, but made clear his bitterness. “Failing private rail companies who have let down commuters for years have been bailed out much quicker than TfL,” he said.
In its May research update, S&P Global Ratings noted that its base case for global air passengers envisages a full recovery only in 2023. That will have a knock-on effect on leisure travel to London. S&P estimates that TfL will see a 50% decline in operating revenue in the fiscal year ending in March 2021, 15% the following year and 10% in 2023. But, of course, these are just guesses; nobody knows how the pandemic will play out. What’s clear is that TfL doesn’t have much scope to reduce its expenditure to cover revenue losses. Total debt may rise to two times revenue by 2022.
To cover the growing gap, TfL will need further subsidies. Indeed, if S&P’s rating on TfL is a full two notches higher than its credit profile would warrant, there’s one explicit reason: its strategic importance to London and the health of the U.K. economy.
The task of re-imagining the Underground for the Covid era has fallen to TfL’s new chief, Andy Byford, an experienced British-born public transport manager who started his long career with London Underground and returned this year after he resigned as head of the New York City Transit Authority, reportedly over interference from Governor Andrew Cuomo.
Byford’s immediate focus has been safety. Shutting down London’s main transport arteries was essential for limiting the transmission of the virus; getting them working again safely is going to be key to the economic recovery. The government’s own Scientific Advisory Group for Emergencies (SAGE) noted that SARS-CoV-2, the virus that causes Covid-19, is “highly likely to survive for several hours, and probably several days on typical surfaces within public transport.” The Tube will be an attractive proposition only if commuters like me feel the risks of infection have been contained.
Following the example set in Asia, the London Underground has been getting the mother of all spring cleanings. A new anti-viral cleaning regime uses hospital-grade substances for scrubbing surfaces. TfL is experimenting with using UV light to clean handrails on escalators and has installed 1,000 hand sanitizer points. New signage across the network reminds people of new rules, such as social distancing, mandatory face coverings and new one-way systems.
So far, TfL says that tests for the virus at high-frequency touch points have come back negative. It helps that people on subways don’t tend to speak to each other, which would release more aerosols that can spread the disease. The Underground also has a natural ventilation advantage from the piston effect as trains pass through close-fitting tunnels, which create air pressure gradients that push ventilation between platforms. Even so, as SAGE noted, ventilation is not likely to have any impact on short-range transmission (a cough) or surface contact. And it’s not clear how quickly a surface can become contaminated again after it has been sanitized.
What is clear is that Covid-19 has created a whole new segment of home-working employees. An estimated 25% of U.K. workers are in jobs where they could work from home some of the time; many likely will.
Something not entirely dissimilar happened during the 2012 London Olympics, says Dr Jonathan Reades, a lecturer in quantitative human geography in London and an advisor to TfL during that period. Braced for throngs of Olympic spectators, the city worried about dangerous levels of overcrowding on public transport. “The messaging then was almost exactly the same: Stay at home, shift your working hours. Of course, the reasons were very different,” Reades says.
Reades’s analysis of travel data at the time showed that 10% to 15% of people reduced their travel. Others changed their travel habits, avoiding the most crowded stations and altering their travel times.
That experience suggests there are effective ways to redistribute traffic, especially where people have flexibility. And yet daily commuters, the stickiest group of travelers, were least likely to change their habits at the time, he found. Much of that group, myself included, are now working from home with no compelling need to return to daily travel.
“The Tube has just passed a phenomenal period of recovery over the past 20 years, through higher levels of investment and management attention to things like reliability. It is now one of the more reliable metros in Europe,” says Alex Barron, head of Metro benchmarking at Imperial College’s Center for Transport Studies. “This crisis is a real tipping point and could go either way for TfL.”
With ridership shrinking, TfL might be tempted to cut services. But if the goal is to maximize social distancing and spread Londoners out across different modes and journey rates, reduced services makes little sense. Increasing fares — another reflexive action — would also be counterproductive.
Commuting, particularly by rail and underground, is highly correlated to income in the U.K. With many commuters having the option of working from home, demand will be more elastic than it was and pricing will have to reflect that. Unlike the New York subway, the Tube has six fare zones and charges a higher fare the greater the distance traveled. That structure may need to change too; hiking fares further will only incentivize commuters from further out (who pay the most) to stay away and perhaps encourage employers to locate offices out of central London, where space is cheaper anyhow.
TfL could also use technology to improve traffic flows and commuter confidence — providing real-time information on crowding, route choice, where to find the most space on a train or other tips. Some proactive messaging was used during the Olympics effectively. Fares might even fluctuate to regulate traffic.
One thing’s certain: Bringing Londoners back on the Tube can’t be done on the cheap. Subways require enormous maintenance expenditure. If investment is not made, services decline, customers grow increasingly disgruntled and many will look for alternatives, further damaging revenues. It’s a vicious circle, as New York has learned.
“Both Andy Byford and the mayor will be expecting the national government to help in some way. Funding and financing is going to be everything,” says Richard Anderson, managing director of the Transport Strategy Center at Imperial College London.
Delays and cost overruns on the new Elizabeth line — the nearly 18 billion pound Crossrail project — also don’t help TfL’s financial picture. In its 2018 business plan, TfL figured that delays in construction would cost it up to 600 million pounds in lost revenue by 2024. But that was provided the central section opened in mid-2020; it’s now targeting completion in 2021 and that deadline will likely be missed.
Boris Johnson sees public sector investment as key to his bid to hold onto the new conservative coalition. Public sector net investment in the U.K. has lagged behind other major economies and infrastructure spending remains skewed toward London. This unevenness has social and economic repercussions that have fed into the Brexit vote. It has exacerbated divisions between north and south and urban and rural areas.
Additional financial support for London’s transit system would raise eyebrows in Parliament and protest from Johnson’s new voters. The temptation will be to do as little as possible, which worries experts like Imperial’s Anderson. “It would be a mistake for any government to make the decision that in the short term we could squeeze funding. If cities are to thrive, they need sustainable mass transport systems.”
But this isn’t just about London. However unfashionable among New Tories, London attracts enormous levels of tourism (some of which fans out to the rest of the country), consumer spending and investment that fill government coffers and fund current spending. It is a world-class center of learning and innovation as well as a center for the arts, fashion and hospitality — sectors that need high concentrations of workers and patrons and are deeply intertwined with the availability of efficient, safe public transport.
Some of that creative energy and spending will inevitably shift to areas outside London; that can be to Britain’s benefit, too, with the pandemic assisting the rebalancing agenda. But only to a point. It’s doubtful that Zoom working and small clusterings of workers can replace the well-known agglomeration benefits of cities.
It’s just one of many paradoxes this pandemic has thrown up. The longer we stay away, the less there may be to go back to when we ride again.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Therese Raphael is a columnist for Bloomberg Opinion. She was editorial page editor of the Wall Street Journal Europe.
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