King County’s water taxis faced low fare cost recovery in 2023; two routes connect Vashon Island and West Seattle to downtown Seattle

There's something very romantic about commuting by boat. No traffic; you can enjoy a nice view from the top deck while sipping your morning coffee. It's the type of commute that is practically begging to be posted on Instagram. However, once you remove the aesthetics and glamour, the numbers tell a somewhat bleak story. A 2025 feasibility study by Maui County’s Department of Transportation, which assessed the potential of creating a county-owned passenger ferry system, provides an interesting comparative glimpse at how American passenger-only ferries perform when it comes to recovering their operating costs. Per the report, King County's Water Taxi in Washington State recovered only 13.7% of its costs in 2023, meaning that for every dollar the government spent operating the ferries, passengers covered about 13.7 cents in fares.

The boats that everyone loves, but the bills that no one talks about

King County’s Water Taxi, which is far from some obscure experimental pilot program, currently operates two routes, per King County Metro’s official website, connecting West Seattle and Vashon Island with downtown Seattle over Elliott Bay. In addition to transporting many local commuters to and from work, the boats also carry numerous out-of-town visitors to the city’s popular tourist attractions. As the report demonstrates, for all the good PR they generate for the region, those boats are currently quite expensive to operate and maintain.

Now, King County’s Water Taxi is not an outlier when it comes to underperforming financially. The same Maui County feasibility study includes a comparison table showing that Kitsap Fast Ferry in Washington State recovered only 16% of its operating costs in 2023, while San Francisco Bay Ferry and New York City’s NYC Ferry each landed in the 24%-26% range, based on more recent figures reported separately by those agencies. It seems that, at least as of now, the passenger-ferry business is notoriously challenging in terms of generating profit, regardless of location, and despite how much goodwill it may generate.

New York's own contribution to the discussion

If you're looking for a particularly noteworthy example of a city ferry system, you can't go wrong by looking at NYC Ferry, which is arguably the most recognizable water-taxi brand in the country. Citizens Budget Commission testimony before the New York City Council put NYC Ferry's foperating subsidy at $8.55 per ride in fiscal year 2023, and found that the true figure climbs to roughly $12.54 per ride once capital costs, including debt service on the boats and slips, are factored in. In other words, every single ferry ride in New York City is subsidized several times more than a regular subway ride.

Furthermore, the testimony also stated that, as of 2023, the annual budget allocated to subsidizing the operations of ferries amounted to $56.5 million, which could have been used for other forms of transportation that typically carry a much larger passenger capacity. None of this is to say that ferries are not a worthy investment. They clearly serve a valuable function in the transportation networks of the cities that host them, which is evident by the fact that they continue to operate on a consistent basis, despite those operating losses. However, there is another discussion to be had, which revolves around the question of what level of subsidization is reasonable for such projects, and who is expected to provide those subsidies.

The outlook for water taxis in America

Water taxis and ferries are clearly a fixture in the transportation infrastructure of many American cities. Not only do they generate immense amounts of good publicity for the regions they serve, but they also provide a crucial alternative mode of transportation, which dramatically cuts traffic congestion in the areas they operate in. However, despite the popularity of such services, the operating costs remain notably high, eating away at the municipal budgets of the cities that are home to such services. And while there is nothing inherently wrong with subsidizing such operations, it is important to remember that those subsidies come from taxpayers' money, who rarely receive sufficient information about the financial sustainability of such projects.