The Fare-Free Experiment

There’s an increasingly-common plea to completely eliminate the fares riders’ pay to board public transit, backed by well-meaning intentions to help low-income earners while simultaneously helping the environment.

But the concept’s a bit more complicated than that. For example, in Toronto, the Toronto Transit Commission had 65.4 percent of its operating budget come from fares alone in ’19, its year-end report states. That number was 42.7 percent in Boston, 23 percent in San Francisco and a low 13 percent in Los Angeles. That percent might sound small, but can add up to hundreds of millions of dollars in funding, and, when it’s not coming from passengers, it needs to come from elsewhere.

For some smaller agencies, however, there’s a different viewpoint: the rippling impact of simply not charging fares might have a bigger impact than requiring users to pay.

“The thought was that making it more difficult for people to use the system was not going to be overcome by any value of this new revenue,” explains Todd Morrow, Executive Director at Island Transit. Located across the Puget Sound and north of Seattle, Island Transit became fare-free in 1987 — likely the first modern American public transit agency to eliminate fares. “[They] commissioned a study to see what would happen if they charge the fare and they determined it would barely cover the cost of collecting and accounting.”

In Thurston County, a similar conclusion occurred. In 2018, voters had approved a sales tax increase to maintain and improve Intercity Transit services, which coincided with an extensive engagement process. The agency was in the midst of replacing end-of-life buses and, while riders wanted integration with the region’s ORCA smart card, it’s in the midst of being upgraded and completely replaced. That meant it didn’t make sense to procure buses with the current collection system built-in, when it might not be functional soon.

“[Becoming] zero-fare wasn’t our end-game at all — it wasn’t even a consideration initially,” says Ann Freeman-Manzanares, the General Manager at Intercity Transit. “Instead, zero-fare really emerged later as an integral solution to achieve our other community-defined goals.”

The community helped develop several broad “wants”: make service quicker and easier to use, ensure vulnerable elders, youth and disabled individuals can get around, and help individuals and families with transportation costs so they can better afford healthcare and food and healthcare — an important point, in an area that is plagued by increasing housing costs. And, naturally, people expressed interest in reducing pollution and congestion.

“You subtract out what it cost to process, to collect those fares and […] I think that was the piece that we were missing,” Ms. Freeman-Manzanares highlights. “Frankly, it was a little surprising to us to [see] how much it costs to collect money.”

For the Olympia-based transit agency, the zero-fare pilot, which is slated to last until at least ’28, enabled operators to provide better customer service. Now that the focus has shifted away from ensuring passengers have the correct change or pass, there are less disputes between passengers and operators, a big source of friction previously.

There was a slight hiccup when it started, with people testing whether zero fares also meant zero rules, but the issue was isolated and resolved with better outreach and communication.

Meanwhile in Richmond, Virginia’s bustling and increasingly-populated capital, pausing fare collection started as part of a nationwide motion to slow the spread of COVID-19. Then, the Greater Richmond Transit Company simply didn’t resume collecting them.

A bus dwelling at a station on GRTC’s Pulse line. 📸: Greater Washington Partnership

“You talk about equity … the perfect example would be to have zero-fare for low-income communities,” says Joe Dillard, Director of Equitable Innovation & Legislative Policy at GRTC. “[What] I think we’ve done here is jump over the equity conversation. We said free fares for all. It doesn’t matter if you make $75K, or $0, but the impacts for the lower-impact community are second-to-none.”

Important to note is that, in Richmond, the majority of local riders — making up around 70 percent of ridership, Mass Transit reports — have household incomes of $25K annually, or less.

An initial proposal was to eliminate fares on local buses and the Pulse bus rapid transit service, but continue collecting them on express routes. This hybrid approach was quickly ruled out, as the money coming in from a smaller amount of ridership wouldn’t outweigh the actual cost of collecting it.

“We found that zero-fare not only increased our ridership, which was already increasing, but it has kicked down the wall to access,” Mr. Dillard says. “When people say ‘increase the service’ we have, I don’t think that we’re making [it] fare-free and still trying to deliver a subpar service.”

The annual Regional Public Transportation Plan lists around a dozen short-term priorities, while the Connect RVA 2045 plan looks to expand local service and build out a network of Pulse routes. The plan was adopted by the regional council and, when fully built-out, would meaningfully expand both local routes and the bus rapid transit service.

North a hundred miles, or a two-and-a-half hour Amtrak ride, is Alexandria. In 2021, the city’s DASH service went fare-free, which coincided with the launch of an almost completely redesigned bus network. Though DASH provides local service within Alexandria, the WMATA-operated buses and Metro operate there, too. WMATA services still require payment to use.

This new network introduced new, higher-frequency service. Focusing on providing 15-minute-or-better service between activity centres, the revamped network has resulted in unprecedented ridership increases. Having more frequent service during non-peak periods turned out to also be beneficial.

There, the city council was already on-board with working to reduce or eliminate fares. Part of the endeavor was covered by a state-based grant to expand low-income and zero-fare programs, while the remainder of the foregone revenue was made up by the city. There had previously been a study completed looking at reducing or providing free service to low-income individuals but there was concern that people would either not apply for an income-based discount, or be above the threshold but still require it.

The idea of eliminating fares has become more common across America, but to many agencies and cities at large, there is still a struggle between introducing better service and reducing the cost to use those services.

Needing to balance equity-based access with improving service is nothing new. Look up any city, and they likely offer some sort of low-income program to riders. But, a common notion is that poorly-run service is still poorly-run, no matter how much is paid for it.

“I suspect a lot of agencies will be having discussions about this: ‘do you want to go fare-free?’ or ‘do you want to increase service?’ and a lot of times you can’t do both,” Martin Barna, Director of Planning & Marketing at DASH, says.

Planning started to redesign Alexandria’s bus network in 2018, in partnership with WMATA and the city, before removing fares was being seriously considered. The end result was improved service and elimination of a large barrier that many current or perspective riders face.

“That timing was very intentional,” Mr Barna admits. “A reason to go fare-free was also to highlight the new network and encourage people to try it out. Going fare-free and having more frequent and reliable service went hand-in-hand.”

And for what comes next, the plan is to continue building upon the high-frequency network, and introduce better weekend and evening service.

“The degree to which transit will be successful and useful for more people is really predicated on the frequency and how useful a network can be,” says Mr. Barna. “We just want to keep the momentum moving forward and be able to show the model of frequent all-day service and free fares [and the] impact that can have on a community.”