Does eliminating fares make public transport more equitable?

Two major events in our recent history have expanded the discussions regarding eliminating fares from public transport: the COVID-19 pandemic and the death of George Floyd. COVID-19 caused many public transport systems to suspend on-board fare collection, particularly if fares were collected within close proximity to the vehicle’s driver. The death of George Floyd, while not directly responsible for agencies considering eliminating fare collection, brought about a renewed interest in making public transport more equitable.

One element of public transport that is thought to be a barometer of equity is collecting fares, as those who use and need public transport the most are often within lower income brackets or have challenges accessing public transport due to the cost. There are many legislative actions taking place across the US to make transit free, such as those in the Boston, Massachusetts¹ and Providence, Rhode Island² areas. Finally, agencies, such as Los Angeles Metro, are moving forward with pilot programmes to make all, or part, of their systems free to many riders. “The two-phase pilot would offer free trips for low-income bus and rail riders starting January 2022. In August 2022, fareless travel would extend to all K-12 students in L.A. County. Metro reported that 70 per cent of its riders make less than $35,000 a year and would qualify for free trips under the current pilot proposal. The pilot would run to June 2023, then Metro’s leaders could decide to continue or expand free transit to more riders and services.”³

Personally, I have always felt that while public transport is a ‘public’ service, it does not mean that it should be offered for free to everyone. The primary reasons for my thinking are two-fold: firstly, fares can defray the costs of operations and improving service; and secondly, there may not be a dedicated source of funding needed to support increased operations and capital expenditures, particularly if free transit results in large increases in ridership. Expanding on these initial thoughts, before examining the equity aspect of free fares, it is useful to look at the pros and cons associated with free public transport.

The pros: obvious, and both qualitative and quantitative:

• Dwell time at bus stops would be reduced
• Passenger convenience would be increased
• Hardware and software would no longer be required to collect fares and be maintained (e.g. fareboxes, turnstiles, gates)
• The following efforts to conduct fare-related tasks would no longer be needed:
  • Supervisory and clerical support for fare collection and counting activities
  • Producing, purchasing and managing fare media
  • Controlling the distribution and sales of tickets and tokens
  • Pulling vaults, and downloading credit and debit card data from fare collection devices
  • Transporting cash, credit card and debit card data to accounting facilities
  • Counting cash, transfers and tokens
  • Performing credit and debit card sales accounting
  • Destroying used fare media
  • Providing security for the fare collection process
  • Auditing and controlling fare collection including reconciling readings to cash, credit card and debit card collections
• Additional hardware and software would no longer be needed for riders to purchase fares off-board (e.g. ticket vending machines)
• Inspecting passes or fare media (a.k.a. fare enforcement), which may result in boarding taking longer
• “Improving equity and economic parity for riders
• Creating an incentive to take public transit over personal vehicles”⁴
• Reducing pollution and congestion levels.

The cons – mostly funding related but significant:

• Dwell time at transport stops could be increased due to a potential increase in ridership
• Additional vehicles could be needed due to increased ridership (particularly during the COVID-19 pandemic if the agency wishes to keep physical distancing in place)
• Additional labour could be needed if additional vehicles have to be added
• Without fares, other sources of funding will be needed (e.g. local or state taxes, contributions from educational institutions, donations from philanthropic organisations) because fares contribute to transit revenues (that can assist in funding operational improvements)
• Hardware and software could be required to provide passenger counts
• The perception of free transit may create unexpected situations such as vandalism.

So, it would seem that the pros outweigh the cons, and free public transport could eliminate a good number of costs, especially those associated with fare collection. However, it is not that simple. There are at least three factors that should be considered before assuming that the benefits of fare free public transport outweigh the costs. First, the complexity of the public transport system should be assessed. Does the system have multiple modes of travel (e.g. bus, subway, commuter rail)? Will making fares free assist a majority of riders? Do the majority of riders transfer between modes to make their trips? Will making fares free on one mode affect what can be charged for another mode?

An example is provided by Laurel Paget-Seekins, former Assistant General Manager for Policy at the Massachusetts Bay Transportation Authority (MBTA), the regional public transport authority in the greater Boston area. Paget-Seekins points out⁵ that if the MBTA’s fixed-route services became free, complementary paratransit service must also become free⁶. As I stated earlier, free fares could result in higher ridership – in this case, both on fixed-route and demand-response services. With the high cost of paratransit service, any increased demand and ridership on The Ride, the MBTA’s paratransit service, would be extremely costly, possibly necessitating additional vehicles and drivers. Further, in thinking about just making buses free, “the [MB]T[A] network is designed for bus riders to transfer to rapid transit. Of all the journeys on the bus and rapid transit network, about 30 per cent involve bus-only. The vast majority of T riders do not exclusively take buses – and many trips are not possible only by bus.”

Second, it is critical to understand how much existing fares contribute to total revenue in a transport authority, as well as recognising funding sources to not only cover this portion of the revenue, but also cover the costs of new vehicles and labour to operate those vehicles. For example, in examining the potential for fare free service in Olympia, Washington, “fare collection accounted for less than two per cent of the agency’s net operating revenue. [As a result,] the agency [in Olympia] successfully asked voters in 2018 to raise the local sales tax to fund better bus service.”⁷

Another example is the MBTA, in which fares account for 40 per cent of operating costs. Eliminating fares across the MBTA would mean replacing almost half of the MBTA’s revenue as well as funding for increased operations and capital costs⁸. This is one of the several reasons that the MBTA is now looking at designing “a low-income fare programme [which] would provide lower cost, perhaps free, access to all MBTA services, which is a greater benefit to people for whom fares are a barrier.”⁹

Finally, examining the long-term impacts of free public transport (even in a pilot programme), both positive and negative, is crucial. Once free transport is offered it is challenging to revert back to charging fares. One example is in Lawrence, Massachusetts, where three bus routes operated by the Merrimack Valley Regional Transit Authority (MVRTA) have been operating for free for three years. These routes cover major destinations in Lawrence including the regional hospital, the Senior Center, grocery stores and schools. Lawrence Mayor Daniel Rivera has been extremely supportive of keeping these routes free, even though the price of operation has increased since the beginning of this free service. The impact of “eliminating the fare made a substantial difference because over 90 per cent of riders make less than $20,000 per year.”¹⁰

So, now that we have discussed the key factors in considering a fare-free system, does making fares free address equity issues? The short answer is yes, but the longer answer is that ‘it depends.’ An example from Los Angeles Metro helps to show how ‘it depends.’ In designing their Fareless System Initiative¹¹, two of their reasons for considering a fareless system are: first, there will be an equity benefit for many riders in that 70 per cent of all riders have annual incomes that are under $35,000; and second, having a fareless system would save riders up to $1,200 each annually and these savings can be spent within the local economies. So this sounds like a fareless system for Los Angeles Metro would directly address equity. However, Los Angeles Metro provides a wide variety of transport services, and considering making all services free would be unrealistic – similar to the MBTA situation mentioned earlier in the article. So Los Angeles Metro is taking a pilot approach to providing fare‑free services.

This pilot programme consists of the following elements¹²:

• One of six possible scenarios, focused on low‑income riders and K-12 students, will be piloted in a phased approach. The first phase will begin with fareless for low-income riders (70 per cent of Metro riders), then students will be added seven months later. This pilot programme will conclude 11 months later, and may be continued and expanded subject to securing funding
• The pilot will cover Metro bus and rail services, but will not include Metro Bikeshare, Metro Micro (microtransit service), regional services, paratransit and commuter rail
• Other required components of the pilot have been determined: projections of pilot boardings, readiness of operational and security elements, detailed cost estimates for the pilot, and identification of all possible sources of Federal, State, and local funding
• Significant outreach has been done in the community to inform and guide the pilot.
• The Los Angeles Metro fare-free pilot programme not only incorporates all of the considerations mentioned earlier in the article, but also meets the primary goal of providing a more equitable transport service.

References

1. Christian MilNeil, “Fare-Free Buses Gain Momentum on Beacon Hill,” StreetsblogMASS, March 25, 2021, https://mass.streetsblog. org/2021/03/25/fare-free-buses-gainmomentum- on-beacon-hill/

2. Amy Russo, “State lawmakers to unveil bill for free RIPTA bus fares,” Mass Transit, April 29, 2021, https://www.masstransitmag. com/technology/fare-collection/ news/21220630/ri-state-lawmakersto- unveil-bill-for-free-ripta-bus-fares

3. Ryan Fonseca, “Free Public Transit? LA Metro Unveils Its Plan To Make That A Reality For Many Bus And Train Riders,” LAist, February 26, 2021, https://laist.com/news/lametro- fareless-transit-pilot

4. Ryan Fonseca, “Most LA Metro Riders Could Ride For Free Starting Next Year Under New Pilot Plan,” LAist, February 26, 2021, https:// laist.com/news/los-angeles-metrofareless- transit-pilot

5. Laurel Paget-Seekins, “Free bus is tempting, but low-income fares better address affordability,” The Boston Globe, Updated April 23, 2021, https://www.bostonglobe. com/2021/04/23/opinion/free-busis- tempting-low-income-fares-betteraddress- affordability/

6. Federal Transit Administration, “Frequently Asked Questions from FTA Grantees Regarding Coronavirus Disease 2019 (COVID-19),” Item CA18, https:// www.transit.dot.gov/frequentlyasked- questions-fta-granteesregarding- coronavirus-disease- 2019‑covid-19

7. Zack Budryk, “Olympia becomes largest city Pacific Northwest to offer free public transit,” The Hill, January 6, 2020, https://thehill.com/blogs/blog-briefing-room/news/476901-olympia-now-largest-city-in-pacific-northwest-offering-free

8. Laurel Paget-Seekins, “Free bus is tempting, but low-income fares better address affordability,” The Boston Globe, Updated April 23, 2021, https://www.bostonglobe.com/2021/04/23/opinion/free-bus-is-tempting-low-income-fares-better-address-affordability/

9. Ibid.

10. Phineas Baxandall, “The Dollars and Sense of Free Buses,” Massachusetts Budget and Policy Center, March 24, 2021, https://massbudget.org/wp-content/uploads/2021/03/The-Dollars-Sense-of-Free-Buses.pdf

11. Los Angeles Metro, “Fareless System Initiative Task Force,” March 3, 2021, https://media.metro.net/2020/SFV-Item-FSI-20210303.pdf

12. Ibid.