NEW YORK CITY — New York Water Taxi, which provides hop-on-hop-off tourist tours and service to Red Hook’s Ikea and Lower Manhattan, plans to shut down in October if the city selects another operator to run the new Citywide Ferry system, the company said Thursday.
The water transportation group, an affiliate of The Durst Organization, will cease operations this year unless the Economic Development Corporation "changes its course on a citywide ferry system bid," it said in a statement.
"As word spread that the Economic Development Corporation will award a citywide ferry service bid to an out-of-state provider, the company has had to reevaluate its viability," according to the announcement.
"New York Water Taxi can no longer continue to operate in a market where the city subsidizes its competitors and promotes the Staten Island Ferry as a free service to see the Statue of Liberty."
The company threatens to completely cease all services in October 2016.
Mayor Bill de Blasio first announced plans for the citywide ferry system in his 2015 State of the City address. It is expected to launch in June 2017 with stops in Bay Ridge, Sunset Park, Astoria, Long Island City and Rockaway Park.
New York Water Taxi, in partnership with New York Waterway and Billybey Ferry, has reportedly been jointly competing against San Francisco-based Hornblower Cruises & Events for the city ferry contract. Hornblower also operates sightseeing tours out of Manhattan.
Crain's reported last month that Hornblower had won the bid, although the EDC maintains it has not yet selected an operator.
Water Taxi spokesman Jordan Barowitz told DNAinfo New York Thursday afternoon "it's been made clear to us that we will not be getting the citywide ferry service."
Routes subsidized by the government, such as the East River Ferry and Staten Island Ferry, which offers free views of the Statue of Liberty, "will crush our business" without the citywide ferry contract, Barowitz said.
While New York Water Taxi has not been officially notified of the selection of an out-of-state operator, "we have heard from numerous channels," Barowitz said.
The company plans to compensate its 200 employees with undetermined retention bonuses for those who remain through October 2016, co-president David Neil said.
While Water Taxi leaders remains hopeful that the EDC will reconsider, it seems very unlikely at this point, they said.
"This is not a situation we want to be in" Neil said.
EDC spokesman Anthony Hogrebe said in a statement, "[W]e’re surprised to hear New York Water Taxi is threatening to cease operations if not selected as operator for Citywide Ferry Service, especially since Citywide Ferry will not directly compete with any of their routes."
"We believe there is room in our city for multiple ferry operators providing many different types of services, and we’re disappointed that Water Taxi does not share our commitment to the future of New York Harbor."
New York Water Taxi, which has been in operation since 2002, touted its growth and revenue by working with private entities over the past six years. But without city backing, "that model is no longer tenable," the company said.
Barowitz compared the situation to competing doughnut shops — one is a successful business selling doughnuts and the other is giving them away for free.
"People will walk the extra block for the free doughnuts," he said.