Would You Take the Providence-Newport Ferry for $50?

Wednesday, June 14, 2017


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The Providence-Newport ferry has been popular since its launch in 2016 - but also heavily subsidized with federal grant money that is set to go away after 2018.

Everyone loves the Providence-Newport ferry, but nearly two-thirds of the actual cost of the program is funded by a federal grant that is set to end next year.

Now in its second year of operation, full-fare ticket prices are currently $10 each way, but a GoLocal investigation has found that state and federal funding subsidized two-thirds of the operation in 2016 -- and that funding for the ferry is only available under the current program for one more year.  

"Think about it. For a couple to go back and forth to Newport, taxpayers are giving them an almost $80 benefit.  They're paying $40, but the true cost is close to $120," said House Minority Leader Patricia Morgan. "I certainly hope they're buying a lot [in Newport].  It's a fun ride, but I'm not sure that it's an economic benefit."

With ferry vendor SeaStreak in its second year of operation, the Rhode Island Department of Transportation [DOT] said it plans to re-evaluate the subsidies doled out. 

"I spoke with the Director a few minutes ago about our conversation," said Charles St. Martin, the Chief Public Affairs Officer for the DOT, on Tuesday. "He said we will determine the entire economic benefit of the ferry service following the conclusion of this year, collecting data and conducting studies, and make a determination if we will continue with the subsidy."

Subsidized Rides

Last year, federal funding of $500,000 went to ferry vendor SeaStreak, with an increase of over 50% of funding set for 2017. 

"It is not a grant, it is federal formula funds under the Federal Highway Administration’s Congestion Mitigation and Air Quality program. It funds projects aimed at reducing congestion and associated air pollution. Last year the amount utilized was $500,000," said Martin. 

"This year, with expanded service in terms of both trips per day (5 vs 4) and length of season (six weeks longer), the amount is about $800,000," added Martin. "Projects are eligible for CMAQ funding for three years. After that, a decision will be made on future funding sources."

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What happens when the federal funding for the ferry - which subsidized 2/3 of the operation in 2016 - goes away?

According to a release at the end of the 2016 season, there were a total of 33,321 passenger trips, which the state said was 17% higher than expected. 

DOT reported that 64% of the trips were passengers on full-fare ($10 each way) and 36% taking advantage of the discount - children, elderly, and disabled - who rode for $5 each way, for a total of $272,412.

"I think it's too early to say (its unsustainable)," said Martin, who noted that the contract would go out to bid at the end of the three years. "We might be more competitive with companies bidding on it."

"Again, it's a demonstration program. This year we're adding more trips. We've talked about adding other ferry stops. We're still in the exploratory phase," said Martin. 

Ticket Price Increase Last Time Out

In 2009, the Providence-Newport "water taxi" run by RIPTA saw its round-trip fare increase to $28 after the loss of federal funding, before ceasing operations. 

"The last time was a commuter model. That didn't work, the tickets weren't selling under that construct," said Martin. 

"[Now] it's more of the summer visitor, which is why its seasonal and not year round.  Last year was a successful use of the CMAQ program, to reduce traffic congestion," said Martin.

Mike Stenhouse with the Rhode Island Center for Freedom and Prosperity, however, questioned the reliance on subsidies. 

"The state should not become involved in price manipulation for any privately offered service. One of the reasons our Center opposes most corporate subsidies of any kind is exactly because it can distort the free market and interfere with fair and open competition," said Stenhouse. "

However, the state injecting itself into this market would only make matters worse," said Stenhouse. "The federal policy is the issue and the state should stay out."


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