What’s a transit pass worth? To the customer, it is (hopefully) worth what they paid for it and means they can get where they want to go safely, conveniently and in comfort. To the transit operator, it represents a source of income. To developers and employers, it offers an opportunity to increase the attractiveness of their location. To the wider community where the transit system operates, it means mobility, access to work, cultural and leisure destinations, reduced congestion along busy travel corridors and a cleaner, greener way of life.
But what if that journey is then offered free to the customer? It is a great deal for the rider – we all like free things – but how does the operator recover lost revenue, and will it be able to support an assumed increase in demand and ridership? Finally, what does the community gain from having a new ‘free’ service?
This is a global conversation, but one that has been particularly active in the United States, as transit operators of all sizes consider ways to restore ridership to pre-COVID levels. In fact, several were looking at this before the pandemic as a response to demands to boost ridership as evidence to elected officials and outside observers – particularly the anti-transit crowd – of the value in public investment in such services. Ridership is often the only value metric that matters to some, and many operators and advocates here are all too familiar with the “It’s cheaper to give everyone a car than to build a transit system,” canard.
That argument is a virus that cannot easily be killed; but it can be contained as planners try to manage mobility in both historically dense cities and emerging new urban areas. Transit opponents only look at the maths – the cost of transit – and want to pass this on to the rider. It is pretty simple in their view. Add the purchase price of the vehicle, plus the cost of ongoing maintenance and operation, then divide it over the number of riders or trips. That becomes the price of the ticket. In their minds: you want to ride transit, you pay for it.
Funny how, at least in the US, that argument does not extend to highways, sidewalks, libraries, public education, etc.
But fare policy, where transit planners and advocates focus, is economics plus politics. The price of operating the system is a given, but what do the community – and the people and institutions within it – gain from having safe and efficient mobility? For riders, operators, and cities, the answer here may not be the same – indeed, the answer can be quite different depending on a wide range of particular factors. Unsurprisingly, it is the politics that makes the decision difficult (and interesting).
The view from the seat
I do not believe I have ever encountered a passenger who thinks deeply about the things that make up their ticket price. The price is the price, and that is what one has to pay to ride. In a perfect world, the vehicle and waiting facilities are clean, the seat is comfortable, the ride smooth and timely, and fellow customers are cordial. Those are the elements of a prix fixe pass. Helping the environment, having a more liveable and mobile city are free extras. Do all those things and the ticket represents a fair value. They want a service, have the means to afford it and are willing to do so.
To those on lower incomes and without means, or those who see mobility as a fundamental right, the ticket price is poor value. They see a greater benefit in providing everyone free access to transit. The price of a ticket is a barrier too high and prevents the largest possible number of citizens from getting where they need to go. In fact, Philip Washington, until recently the CEO of the transit system in Los Angeles, California (full disclosure, he is a friend), has called a fare-free system a “moral obligation.” Many share his perspective, and, on the surface, it has great appeal. How can anyone oppose cities providing a broad public benefit to their residents?
The city view
Debating the benefits, value and components of citizenship goes back at least to the Greeks, 3000 years ago. What do I get for being a citizen? What is included? The answer has evolved from the early days and varies today according to local custom and tradition. But the fundamental perspective, that there is value in being a citizen, has not changed.
The ‘moral obligation’ argument is only recently coming to transit on a large scale. Students of policy and politics have seen it applied to voting rights, public education, and clean food, air and water for decades. Perhaps it is more of a statement of faith than facts, but the moral obligation position does get attention. While proving it may be a little slippery and too reliant on a personal perspective, there are other, more tangible metrics for demonstrating the value of increased transit use.
Consider traffic. How does a city centre continue to thrive – or even survive – if people cannot access it? They may be able to travel to it, but as more people do the corridors become busier and more congested, and travel time grows. In fact, it can take so much time to get there that it becomes easier to go somewhere else. Meanwhile smart planners – public or private sector – are building alternatives elsewhere. These new locations may not have the same features and benefits as the city’s core, but they are modern, with different offerings, and getting to them is easier and more convenient. People with the ability to afford to change their travel patterns to get there do and those who cannot, do not.
In a perfect world, the city has anticipated or actively participated in the new development and has built the mobility infrastructure to support it. The infrastructure is added through highways or – ideally – expanded transit. Because it is further from the centre, it is more expensive to operate and maintain on top of the expense of construction and fleet expansion. Riders may have to pay more to travel the greater distance. Welcome to fare zones or tariffs based on travel time.
Some city leaders are troubled by the possible inequity experienced by people living in the downtown areas, others are not. A third group has concerns, but hopes things will work out over time, or that others will step in to help address the issues. Welcome to the politics of city planning and the discussion of value.
There is no debate that people need to be able to get where they want and need to go. How they do it, and who pays, is up for discussion. Beyond the whole ‘rights’ or ‘benefits’ of citizenship, leaders must weigh competing visions for their cities. For example, how much growth is desired, and if so, where and when should it happen? Additionally, how does the vision of leaders align with that of the majority of the populace? After all, these are the very people who have elected them to their positions.
US transit operators, usually smaller and often bus-only systems, began experimenting with free fares to boost ridership before COVID. Many more eliminated fares during the pandemic to minimise physical contact and eliminate the cost of processing those payments. This move gave additional energy to the social equity perspective. If transit is allowed to remain open because it is an essential service, the argument goes, should we not do everything possible to help people use it every day? The free-fare debate continues to pick up momentum as more businesses and services re-open.
Michelle Wu, the new Mayor of Boston, Massachusetts, made free fares a campaign focus. In late 2021 the city announced plans to continue and expand a free-fare pilot on three bus routes, and expects to use federal relief funds to cover at least part of the cost. Some nearby cities are eliminating bus fares in co-operation with Boston. Interestingly, the city’s historic and extensive urban rail system is not part of the pilot. In fact, looking around the world, rail systems are often excluded from such initiatives.
However, Los Angeles has included rail services in its pilot, which although initially limited to school-age students, may well include low-income riders during its two-year run. The ambition is to eventually operate the entire county-wide system free to all.
LA, operator of the nation’s second-largest public transport network, will learn a lot – as will other US systems considering free fares. It is reasonable to assume that ridership will grow to pre-pandemic levels and continue rising. That is surely good news. But LA Metro, and those watching with interest, will also be looking at how this changes the customer experience, particularly as many transit agencies were, again, pre-COVID, placing an increased emphasis on the quality of the ride.
City officials want to see how this affects overall mobility and traffic flow. Meaningful improvements in air quality are also welcome, aligning with environmental policies accelerated in a post-COP26 world. It will also be interesting to see if employment strengthens. While joblessness is declining with the economic recovery, in some cases prospective workers are not returning because the expense of getting to and staying on the job, the cost of transportation, childcare, and the like, outweighs the salary paid. The ride may be free, and the savings real, but is that enough?
Transit expansion could also be influenced by this new environment. Many free-fare champions are urging systems to redirect funds marked for capital projects to either replace lost fare revenue or to use the capital funds differently; for example, more bus rapid transit and less rail. However, that may not be an option since funding for most capital projects in the US is mode-specific and cannot simply be moved from one project to another. Still, cities may be confronted with new decisions or the need to revisit old choices and decades-long commitments.
The bottom line: What does success look like to our city and what does it mean for our residents and their future? City leaders – elected, appointed, established volunteers – are always looking for ways to keep their communities vibrant and attractive to newcomers. In recent years, they have also been fighting first-ring suburbs to retain residents. These things also help bring in new businesses and developments. Elected officials will also, reasonably, consider the photo-ops and vote-winning potential. Regardless, leaders need to have a shared understanding of success.
Making it work: The operator perspective
Simple mantras guide transit operators: we get people where they need to go, safely, efficiently and effectively. My personal favourite, taught to me by a colleague early in my career is: ‘If we don’t make pullout, bad things happen’. Put another way, public transport makes things work and helps society to function at its best. The free-fare
debate adds a layer of complexity to what can already be difficult decisions. What is more important to customers: the price, quality, or frequency of the service?
As noted earlier, it is not hard to work out the costs of putting trams, LRVs, buses or trains into operation. Fixed costs are easily calculated, and it is not difficult to report the cost per trip or cost per passenger. The cost per trip, or in some cases the subsidy per passenger – since it is not expected customers would bear the full cost of riding – is a common performance metric.
Authorities looking to expand operations and capture a larger group of riders who own personal vehicles but choose transit for their travel are focusing more on the customer experience. It is believed these so called ‘choice’ or ‘discretionary’ riders, as opposed to ‘transit dependent’ riders, are less influenced by cheap fares, but are instead attracted by improved amenities and a higher-quality service. Advocates for the transit-dependent insist riders also want those things and frequently push back against the notion of ‘choice’ versus ‘transit-dependent’, arguing riders are just that, riders.
Still, policies of fare-free travel add a new balancing act. Even when a system has been built with a robust, dedicated and predictable revenue source that is designed to help keep fares low, the loss of passenger revenue is significant. The system I am most familiar with, Dallas Area Rapid Transit (Texas), receives only about 15% of its annual revenue through passenger contributions – the bulk comes from a dedicated local sales tax. In the coming year, a rough assumption is that DART would have to replace in excess of USD50m were it to go entirely fare-free. That does not take into consideration the additional maintenance and operating costs that might be incurred with anticipated ridership growth.
Put this way, transit agencies and their customers have to know – and embrace – their priorities. Do they want to ride for free? If so, what might they be willing to give up? It is not logical to assume operators could cover the increased costs permanently. Again, many agencies entering pilots are relying on limited, temporary funds to foot the bill. What are they, their funding agencies, and their communities willing to do in order that those changes can be made permanent? Also, what does free service mean for the rider experience? Are agencies able to maintain their equipment? Are they able to expand service frequency? A trip by public transport with a one-hour headway is really no trip at all. Can the agencies staff manage increased passenger loads? Customers may also wonder if the more crowded services are still safe.
Planning the next destination
Whatever is decided, it will fall to transit authorities and operators to bring the vision of others, along with their own, to life.
Even in the best of times, long-range transit planning is a challenging exercise. That is why comparatively few agencies publish plans which go beyond ten years. The events of the past two years, along with unprecedented new (albeit short-term) funding, have rocked many of those plans. At the same time new priorities are coming to the fore and are being vigorously debated. Perhaps the priorities are not new. We just could not see them until the crystal ball had a good shake.
Article appeared originally in TAUT 1010 (February 2022)
About the author
Transitioning from a career as an award-winning journalist, Morgan Lyons was Vice-President, External Relations, at Dallas Area Rapid Transit in Texas before opening his own communications consultancy, Lyons Strategic.
He has served as Chair of the Marketing and Communications Committee for the American Public Transit Association, and as a member of the body’s Board of Directors. He is presently a member of the Legislative Committee. Visit his website at www.lyonsstrategic.com