The city’s nearly 34,000 subway and bus workers stayed out despite a court order fining their union the huge sum for each day of the stoppage.
It is the first strike on the United States’ biggest transportation system in 25 years.
Judge Theodore Jones who imposed the massive fine on the unions, has ordered their leaders to appear before him on Thursday.
Judge Jones said jail was a serious possibility if they did not order the end of the stoppage.
The White House urged the parties to “resolve their differences so that the people in New York can get to where they need to go.
“We’re prohibited from intervening in transit strikes,” spokesman Scott McClellan acknowledged, but he said the federal government could offer help in mediating talks.
“We urge the parties to come together and resolve their differences,” he said.
New York Mayor Michael Bloomberg, who again joined the throngs hiking across the Brooklyn Bridge into Manhattan, said there could be no negotiations until the strike ended.
Mayor Bloomberg said the transport workers were “shamefully” ignoring a state law banning such action.
More court hearings were scheduled for Wednesday. But the city streets quickly choked with cars, despite Mayor Bloomberg’s emergency order that any vehicle entering Manhattan must have at least four people in it.
More than 400 subway stations were locked up as the daily commuter army jostled to share cab rides or crowd onto Long Island Rail Road and Metro North trains, two of the rare lines not on strike.
“It’s not pleasant, but that’s life in a big city,” said Michael Padden, a federal public defender who endured a two-hour commute by regional rail and on foot to get to the courthouse in Brooklyn.
“Once in a while, something like that happens. All this luxury mustn’t be taken for granted. You have to adapt. We’ve had 9/11, the blackout, we’ve been through much worse.”
Pressure on unions
As well as the million-dollar-a-day fine, New York city officials have threatened to deduct three days of pay for each day a worker is on strike.
The move increased the pressure on the union, but labor leaders showed little sign of giving in.
In final negotiations late Monday, the Metropolitan Transportation
Authority improved its wage offer and dropped a demand to increase the retirement age from 55, but insisted that workers contribute more toward their pensions, the New York Times said.
The newspaper said the proposal would save the MTA less than 20 million dollars over the next three years.
“What they’d be saving on pensions is a pittance,” said TWU leader Roger Toussaint.
He told ABC television that the standoff could be “resolved in hours if there’s a will.”
In a separate interview with a local TV station, he said that “were it not for the pension piece, we would not be out on strike.
“All it (the MTA) needs to do is take its pension proposal off the table.”
Resourceful New Yorkers walked and used everything from bikes to skates and skateboards to make their commutes into and around Manhattan.
Still, for some not accustomed to the strenuous cold-weather workout, the trip was tough going.
“I’m extremely tired. I’m not much of a biker,” said Colleen, 25, who declined to give her last name as she made the long trip from Brooklyn to her job at a children’s book association in Manhattan for a second time.
“I actually learned to bike pretty much in the last couple of days, so I’ve fallen off my bike I don’t know how many times!” she said.
With city authorities fearing New York will lose US$1.6 billion in
Christmas business if the strike lasts one week, the economic impact could be huge.
“It couldn’t have happened at a worse time, given the level of retail activity before Christmas,” Art Hogan, chief market analyst at Jefferies, a global investment bank and securities firm said.
Estimates on how much the city stands to lose as a result of the strike varied.
Mr Hogan put the figure at US$100 million a day while New York City comptroller William Thompson Jr projected around US$400 million a day in losses.
Mr Thompson said if the strike continued through next week, he expected the city to lose less, as it would be a vacation period for many.
Michael Burke, a manager at Balthazar restaurant in Soho, said the biggest problem was ensuring employees made it to work.
“A lot of employees, especially kitchen employees, are from the Bronx and Queens, so we use a shuttle van all day long,” Burke said. “We have to be creative.”
He said he had noticed a 20-percent drop in business and hoped the strike would end soon as the restaurant could not recover the lost money.
Retail stores were also feeling the pinch as Christmas week for many accounts for 20 percent of holiday sales.
Many companies, however, had braced for the strike by leasing buses to drive employees to work, organizing car pools or encouraging people to work out of their homes. Some were also allowing employees to head home early.
The New York stock exchange registered only a slight drop as the strike was taking place amid a slow holiday period.