Fare Free Public Transportation: Is It Worth It?

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Since Biden’s election, the discussion about climate change has moved toward infrastructure investments. In line with this, many cities have been thinking about investing in their public transit systems. These investments have been shown to be both economically and environmentally sound. But even if a city has quality public transportation that does not mean everybody can use it.

Because public transit costs money, usually a few dollars per trip, a hurdle is created for those in extreme poverty. Ridership of public transit skews towards the poor so this cost is huge for a significant share of people who utilize it. According to a recent study commissioned by the American Public Transportation Agency, 21% of people who use public transit in America have a household income of under $15,000 as opposed to the median national income of $68,703 in 2020. Additionally 46% of riders did not have access to a personal vehicle and 20% of those surveyed say they would not make the trip without public transit making it apparent just how vital this service is.

A bold solution to this problem is to drop fares all together. Fare free public transportation (FFPT) has already been implemented in 100 cities around the world as well as in the entire country of Luxembourg. In Luxembourg, it was introduced to achieve 5 main goals; as a policy that reduces wealth inequality, a way to get cars off the road, a method of increasing ridership, and as an investment to deal with the already increasing usage in the country. The lost fare costs taxpayers roughly €41 million annually which added less than 10% to the €500 million budget already allocated to transportation.

As an equitable policy, revenue for most transit agencies in the US is budgeted by local governments whose tax revenues largely come from property and sales taxes and intergovernmental transfers from both federal and state entities. Because of this the tax dollars that go towards transit are likely to be from regressive taxes, and in states and localities with high sales taxes, this is even more pronounced. To counteract this regressive taxation, FFPT makes the most impact on the budgets of the poorest people. In Luxembourg the program is funded by progressive taxes instead, leading to more equitable outcomes. However, something that is unique to the US is the racial justice aspect of the policy.

In every American city, urban planning was, at one point in time, explicitly racist and has created inequities that have persisted to this day. The most stark present day example of this is the criminalization of poverty in New York City that falls distinctly along racial lines as 90% of people arrested in the first three months of 2017 for turnstile jumping were black or hispanic. As the pandemic recession has led to crime increases in the subway system in NYC, unions have remained opposed to turnstile policing even as they call for extra police presence on subways and platforms. But other groups are flatly opposed to the increased police presence due to past incidents of police aggression on the subway as well as the costs of current and proposed police presence. Another way that FFPT could tackle racial disparities is through partial adoption, in which only some lines or forms of transport drop fares. For example, Michelle Wu, an outspoken Boston city councilwoman, has argued that buses are the most important mode of transportation to drop fares on because they are more beneficial to historically underserved and marginalized communities.

However FFPT has its flaws and doesn’t always achieve the goals laid out by policymakers. For instance, FFPT is not a good way to directly reduce congestion. Back in 1978, there were experiments with this policy in the US. After a major lobbying campaign by the transit industry and urban interests, federal dollars for public transportation were secured. Unfortunately, it didn’t accomplish its main goal of reducing car usage and was therefore not extended past the original 12 months. A study published in 1983 focused on the two largest service areas of Denver and Mercer County, New Jersey, and found that “the amount of regional auto travel was virtually unaffected”, although one important limitation is that fares were only dropped during off-peak hours, which meant that it did not help many commuters. In Tallinn, the second largest city that currently has FFPT with a population of 420,000, car usage only fell by 3% after 3 years. While car usage dropped, there are much more effective ways to achieve this goal such as congestion taxes, fuel taxes, parking fees, or investment in the quality of public transportation. But even though FFPT does not directly decrease congestion, the increased ridership that results can lead to more political will for quality improvements, creating a knock on effect that does.

Another concern about of FFPT is that it will lead to more danger on the subway. This was highlighted in the 1983 study which found “increased rowdy-ism among passengers” but in Aubagne, a city in suburban France, this problem never arose. In fact, the inspectors were directed to monitor the drivers rather than the passengers.

Another problem is scalability. In many cities, FFPT is affordable and potentially cheaper, but in major cities, where fares actually make a profit, the holes in the budget can be devastating. For example, NYC, the city with the most comprehensive mass transit infrastructure, would likely only be able to afford FFPT alongside many other transportation policy changes such as congestion taxes and targeted property taxes that capture extra value added to property by public transportation stations, although for bus stops this only holds true when ridership is high. However, there is currently a bill sitting in Congress that could cover these costs. The Freedom to Move Act would give localities and transit agencies 5 year grants to cover the revenue lost by fare abolition and it’s supported by organizations like the Sierra Club and the NAACP. During the pandemic, many places across the country temporarily abolished fares as a Covid safety measure giving residents a glimpse of what FFPT looks like.

Even so, FFPT is possible in some major cities without other major policy changes. For example, Denver’s transit authority, the Regional Transportation District (RTD), spent $824.3 million in 2019 and only took in $125.3 million in fares when not including the current expansion projects, or just 15.2% of the operating costs and 8.9% when expansion projects are included. Covering the missing fares seems like a long shot in the current political climate but recent reforms will allow the RTD to lower rates as well as charge for parking. If these two policies are enacted, it could lead to greatly increased ridership and, if FFPT were introduced, it could boost ridership far above the 15% seen in the 1978 experiment.

FFPT has the potential to substantially change how people move. While it may not be the most environmentally targeted policy, it’s virtues are many. From its ability to address both wealth and racial inequality to its ability to increase ridership it can alleviate many problems. It is an urban policy that delivers on many of the problems that continue to ravage our world. By implementing FFPT cities everywhere will show themselves to be up to the task of solving the problems of the new millennium.