The Case For Making Public Transit Free: Is It A Good Idea?

The Case For Making Public Transit Free: Is It A Good Idea?

The debate on whether or not public transportation should be free has been going on for some time now, with the opinions of the public and policymakers divided and conflicted over if it’s a good idea or not. The evidence from conducted trials is giving us somewhat uncertain results as to the long-term effects of such decisions and while eliminating fares might provide a much-needed boost to ridership by removing the cost burdens of public transit and making it equitable to everyone, experts and officials also agree that removing fares fails to address other more pressing issues such as poor service and quality which should be a priority for transit systems across America. Let’s take a look at some of the pros and cons of making public transit free, what the experts say, where the debate is going, and what the research shows us has already been done on a global scale. 

Why are cities considering ending the fares on transit?

The first project to offer residents free rides took place in the United States during the 1970s, however, efforts were quickly halted due to its unprofitable nature. Fare-free public transit programs have gradually picked up pace again as the Covid-19 pandemic forced governments to make decisions that will protect workers and the public, by limiting human interactions and reducing boarding times. The concept has further drawn the interest of urban planners in recent years as cities look to mass transit as a means of reducing carbon emissions and alleviating social inequality. 

The American Public Transit Association reports that at least 35 agencies in the US have removed fares across their networks which has been happening in conjunction with a bill that Massachusetts Sen. Edward Markey and US Rep. Ayanna Pressley have brought in Congress to establish a $25 billion program that will support local and state projects for fare-free systems.  

These efforts have resulted from public disinterest in public transportation following the pandemic and agencies are struggling to regain ridership. People are turning to the private sector and renting rides as well as preferring the comfort of their vehicles which in turn has made US streets even more congested, there’s more pollution, road incidents, and a bigger price tag for maintenance of infrastructure. Ridership is currently at about 70% of what it was before the pandemic nationwide, and transit agency budget shortfalls threaten even more disruption in services, layoffs, and fare hikes.

Should public transit be free?

Jump over to our latest podcast episode with John C. Andoh, Mass Transit Administrator and General Manager at HILO who talks about their fare-free system, achievements, and whether fare-free is in their future >>

Advocates of free public transportation state that the benefits of making public transit free of charge far outweigh the cost of losing out on revenue from tickets. They argue that eliminating the expense of transit fares would significantly relieve the financial burden that falls on low-income residents and this would reduce inequality. Furthermore, they state that free rides would essentially get more drivers off the road and public subsidy for road maintenance and construction is much greater than it is for mass transit so there is an added benefit for the economy. Supporters also believe that as people choose public transit over driving, the environmental impact caused by CO2 emissions will be reduced so we will be a step closer to avoiding potential climate catastrophes in the future.

Removing fares ensures low-income citizens can travel

It makes sense that by removing tickets we could reap potential benefits such as ensuring equitable access to transport for everyone within communities as well as keeping buses on time and reducing costs associated with ticketing systems or fare enforcement. Supporters argue that free fares should be a basic human right and draw a parallel with other services everyone pays into such as public health, schools, and libraries so this should not be exclusive to just those in our community who can afford it. 

There is some evidence that free-fare projects increase ridership

Boston Mayor Michelle Wu, who has long advocated for fare-free programs says that buses that offer free rides run more efficiently because they don’t need to stop and wait for people to pay. As transactions are removed from the process of traveling, boarding time per passenger (for 2 or more routes) decreases by over 6% and is further reduced by 23% on the third. It was further reported that ridership levels grew as a result of removing fares by 35% from 2021 to 2022, while ridership on the rest of the bus system grew by 15%. Richmond is another example as they first eliminated fares back in March of 2020 and later extended the policy through 2025. Leaders in the agency state that removing fares helped city buses increase ridership levels by 6% in 2022 from what levels were back in 2019.

Free fares reduce dependence on fare collection and expensive equipment

Fare-free advocates also claim that transit agencies need to reduce their dependence on fare collection, which fluctuates, placing a greater financial burden on those who can’t afford it. Fares, however, remain a critical source of funding for agencies and they would need to make up for lost revenue elsewhere to stay afloat. It’s estimated that fares make up around 12.5% of transit agencies’ operating expenses in 2021, down from 31.4% in 2019, according to the APTA. The figures vary depending on size and structure although the bigger the agency the more reliance there is on fare collection. About two-thirds of transit agencies’ revenue comes from the government and out of that, more than three-quarters are provided by state and local governments.

Furthermore, expensive ticketing equipment such as Ticket Vending Machines and Fareboxes cost agencies tens of thousands of dollars to purchase and maintain, not to mention that manual fare collection can be time-consuming, costly, and hard to keep track of, often prolonging the boarding of passengers and adding to dwell times. In the long run, out-of-date fare collection methods can add unwanted and unnecessary costs to an agency’s operations.

Free fares impose a series of social and economic benefits

Free fares might not convince drivers to get out of their vehicles but they will surely convert some travelers to using public transit and will make some kind of positive impact on traffic and local air quality which benefits everyone. Free fares won’t pull low-income people out of poverty but it will keep their money in their pockets, allowing them to travel when they need to. Ditching fares does come at a cost but there are savings to be made by removing investments in expensive ticketing systems so therefore society can still benefit.

Furthermore, road transport makes up about a tenth of global carbon dioxide emissions, and along with increasing fuel prices, a tremendous amount of pressure is placed on the household budgets of Americans and many believe that free fares would help alleviate this problem.

The Debate on Free Public Transportation

Free fares fail to address the most pressing issues in transit

Skeptics argue that the number one reason why people prefer not to use public transit has nothing to do with the expense of a fare but rather the low quality of service. They argue that the best strategy for increasing ridership in public transit is to internally fix the U.S. transit system and address the pressing issues which have been on for a long time. This includes unreliable services, crowding, old infrastructure in need of upgrading, huge service gas, and better security measures and technology/equipment to make riders feel safe. Undoubtedly, this is an incredibly expensive project that would be even harder to complete if cities stopped collecting ticket revenue altogether that would otherwise go toward funding such initiatives.

There is a significant cost to free travel, and financially it’s going to be hard to sustain in the long run. Many agencies predict that by the end of the following year, federal money will run out, and cities will have to decide whether to continue these programs or introduce new policies. The top priority should be to provide services, and agencies would rather recover fare revenue from travelers who can afford it. A valid concern for most transit providers is that they don’t want to have to trim services because of zero fares since they already have difficulty maintaining some and working at full capacity. 

Listen to another podcast episode about fare-free transit systems. Joshua Baker, Chief Executive Officer, and Martin Barna, Director of Planning & Marketing at DASH (Alexandria, Virginia) talk about how DASH went fare-free and the system’s remarkable success >>

Free rides haven’t been proven to reduce CO2 emissions 

Short trials make it difficult to discern the impact of fare-free projects and efforts. When Copenhagen introduced a one-month-old trial of free transport tickets, a decrease in car use was initially observed, however, when the project ended, people quickly returned to their old ways. Germany stands as an example that this is not always the case, as just a few weeks into their 9-euro-a-month ticket initiative, a traffic report concluded that there were fewer cars on the roads, with better flow and less congestion.  

While free fares on public transit might boost ridership, these policies haven’t necessarily got cars off the road or directly targeted the issue of emissions. Studies were done on several cities in the U.S. and abroad which point to an increase in ridership when fares are removed, however, those additional riders were shown to be people who would otherwise opt for more sustainable modes of transport such as biking or walking, meaning that there wasn’t a significant reduction in the number of drivers on the road or in the levels of pollution.  

Fare-free projects cost a lot of money and are hard to scale up

Washington, D.C. planned to eliminate fares on all of the city’s buses beginning this summer, however, this was delayed due to budget shortfalls. After a fiscal reality check and a projection showed that city tax revenue was stalling and would not be sufficient to fund the program which was estimated to cost $43 million for the first year alone.  

In terms of improving services, boosting efficiency, and operations, it requires a lot of money which has to come from somewhere, especially if you’re cutting fares so this is an aspect that has to be considered thoroughly. 

In Spain, for example, free tickets will be paid for out of the country’s windfall tax on energy companies and banks which the government believes will be worth over 7 billion euros two years from now. Mass transit systems around the globe are already subsidized to some extent by public funds. In France, fares make up as little as 10 percent of the entire public transport budget. Luxembourg could even afford to make travel free as a two-hour ticket costs just 2 euros, with fares amounting to 30 million euros in revenue out of the 1 billion euro budget. That’s not always the case, however, as over two-thirds of Transport for London’s budget comes from fares, which means the government would have a huge gap to cover if it aimed to make public transport free in its capital.  

Free-fare systems work best in smaller countries and agencies 

Luxembourg became the first country in 2020 to offer entirely free public transportation, but tickets were already quite affordable and the country is of a smaller size, with a population of just 630,000 residents. Moving forward two years, it’s reported that the traffic remains the same if not even worse than before the fare policy so local context does matter. 

In Australia, for example, the government issued a 5-week-old, free bus policy to help with the rising cost of living expenses. Although these efforts were praised initially, many have argued that this benefited primarily the wealthier groups of residents living in urban areas who commute to work regularly. Similarly in Spain, free tickets are said to aid mostly people living in densely populated regions who can gain access to regional trains such as the daily train between Madrid and Barcelona, which is heavily visited all times a year. The problem with this is that regional trains already suffer from a lack of investment and many areas can not even provide services so why would there be a need for free tickets if there are no trains?  

Regardless, the benefits stretch beyond just the environment. Easing the burden of inflation is said to help those who need it right now. Free train tickets might be tempting to middle-class drivers as fuel prices continue to rise but in reality, those who benefit the most will be the ones of low-income households, who are unable to afford a car. Free fares also remove the financial cost of installing expansive ticketing systems and enforcing them. This is the reason behind Boston’s free fare trial which was created as a response to a new $1 billion ticketing system – a rather pricey project when we keep in mind that bus fares bring in only about $60 million in revenue, annually.

Final Thoughts

The answer to the question of whether or not public transit should be free must be viewed by each country, individually, and determined based on a variety of complex regional, social, and economic factors. Researchers and experts claim that a viable alternative to free fares for all are strategies and policies that focus on targeted discounts, offering free or cheap passes to students, young adults, the elderly, and those on benefits, which is already a common practice.  

Rather than subsidizing transport costs for those who can afford it, free passes could be given to those on lower incomes or in regions where public transport is available. Another intermediate step is charging for fares through a flat rate, fixed fares that are universally affordable and accessible as Germany did this summer. People would still value the service and transit agencies will also generate revenue.  

Whatever the future holds for the transportation sector and when and if free travel will become a regular thing, it’s important for social and economic factors to not be overlooked as careful planning and strategizing are essential to the success of such projects. As mentioned earlier, the best option might be to implement such initiatives in smaller countries and agencies where it will be easier to scale up and work through, gradually learning what works and what doesn’t before expanding toward bigger cities. Working in conjunction with researchers, experts, and different officials and municipalities will also be essential to achieving long-term success in this field.  

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AUTHOR

VP of Business Development

Konstantin is an experienced product and business development professional with vast experience in building revenue systems, having been involved with such initiatives on three continents. His experience spreads from e-commerce and healthcare (for USA, SEA - Malaysia, and Singapore) to mobility as a service (USA and Europe).