Free Public Transport: Why Now of All Times?
This is the second in a series of four posts about the poor state of political transit advocacy in the United States, following a post about the Green Line Extension in metro Boston, to be followed by the topics of operating aid and an Urban Institute report by Yonah Freemark.
There’s a push in various left-wing places to make public transportation free. It comes from various strands of governance, advocacy, and public transport, most of which are peripheral but all together add up to something. The US has been making some pushes recently: Boston made three buses fare-free as a pilot program, and California is proposing a three-month stimulus including free transit for that period and a subsidy for car owners. Germany is likewise subsidizing transport by both car and public transit. It’s economically the wrong choice for today’s economy of low unemployment, elevated inflation, and war, and it’s especially troubling when public transport advocates seize upon it as their main issue, in lieu of long-term investments into production of transit rather than its consumption.
Who’s for free public transit?
Historically, public transit was expected to be profitable, even when it was publicly-run. State-owned railroads predate the modern welfare state, and it was normal for them to not just break even but, in the case of Prussia, return profits to the state in preference to broad-based taxes. This changed as operating costs mounted in the middle of the 20th century and competition with cars reduced patronage. The pattern differs by country, and in some places (namely, rich Asia), urban rail remained breakeven or profitable, but stiff competition bit into ridership even in Japan. The norm in most of the West has been subsidies, usually at the local or regional level.
As subsidies were normalized, some proposed to go ahead and make public transport completely free. In the American civil rights movement, this included Ted Kheel, a backer of free public transit advocates like the activist Charles Komanoff and the academic Mark Delucchi. Reasons for free transit have included social equality (since it acts as a poll tax on commuters) and environmental benefits (since it competes with cars).
Anne Hidalgo has attempted and so far failed to find the money for free public transport in Paris, and other parts of Europe have settled for deep discounts in lieu of going fully fareless: Vienna charges 365€ for an annual pass (Berlin, which breaks even on the U-Bahn as far as I can tell, does so charging 86€/month).
In the United States, free transit has recently become a rallying cry for DSA, where it crowds out any discussion of improvement in the quality of service. Building new rail lines is the domain of wonks and neoliberals; socialists call for making things free, in analogy with their call for free universal health care. Boston has gotten in on the act, with conventional progressive (as opposed to DSA) mayor Michelle Wu campaigning on free buses within the municipality and getting the state-run MBTA to pilot free buses on three routes in low-income neighborhoods.
What’s wrong with free transit?
It costs money.
More precisely, it costs money that could be spent on other things. In Ile-de-France, as of 2018, fare revenues including employer benefits amounted to 4 billion euros, out of a total budget of 10.5 billion. The region can zero out this revenue, but on the same budget it can expand the Métro network by around 20-25 km a year – and the Métro is as far as I can tell profitable, subsidies going to suburban RER tails and buses. For that matter, the heavy subsidies to the suburbs, which pay the same cheap monthly rate as the city, could be replaced with investment in more and better lines.
The experiments with actually-free transit so far are in places with very weak revenues, like Estonia. Some American cities like it in context where public transport is only used by the desperate and no attempt is made at making service attractive to anyone else. Boston is unique in trying it in a context with higher fare revenue – but the buses are rail feeders, so the early pilot piggybacks on this and spends relatively little money in lost revenue, ignoring the long-term costs of breaking the (limited) fare integration between the buses and the subway.
What’s wrong with free transit now?
Free transit as deployed in the California proposal is in effect a stimulus project: the government gives people money in various ways. Germany is doing something similar, in a package including 9€ monthly tickets, a 0.30€ fuel tax cut, and a cut in energy taxes.
In Germany, unemployment right now is 2.9% and core inflation (without food and energy) is 3%. This is a country that spent a decade thinking going over 2% was immoral, and now the party that considers itself the most budget hawkish is cutting fuel taxes, in a time of conflict with an oil and gas exporter and a rise in military spending.
In the United States, unemployment is low as well, and inflation is high, 6.4%. This is not the time for stimulus or investments in consumption. It’s time for investments in production and suppression of consumption. So what gives?
Pedestrian Observations 
I’m not necessarily in favour of free public transport as a short-term measure, since there are other priorities out there, and I probably see the Vienna model as preferable. For one, it ideally hooks people into using transit on a regular basis, since they have at least paid something for their season pass, whereas free service can lead to passengers taking it for granted.
However, there is a major logical flaw in your argument: you assume that tax revenue is a fixed entity, when in fact, if free fares are instituted, this means that the population as a whole has more disposable income (since they pay less out of their pocket for transport), which means that they also have the capacity to be taxed at a higher rate to make up for the budget shortfall. Whether this is politically possible is another issue, but on an economic level it is feasible.
The end effect of switching from a user pays to a 100% subsidy fare policy would then be twofold:
1. It spreads costs around to both users and non-users of the network (but this can be justified in that car drivers benefit from lower traffic if more people take public transport, and the city benefits as a whole from having to spend less on roads, parking, etc., as well as having lower social costs from air pollution, accidents and so on).
2. It shifts costs from the poor, who in the first model would spend a much higher proportion of their income on transport, to the rich, since everybody would pay an equal proportion of their income to fund transport or, in a progressive taxation system, those with higher incomes would pay a correspondingly higher rate. This, of course, is what makes the policy attractive to socialists.
Your comments on the DSA are a total caricature: there are many, many people on the far left, both in DSA and not, who are vocal about the need for service and infrastructure improvements to transit. I don’t think anyone believes that simply introducing free fares would be sufficient to fix things. Bernie Sanders, for one, has always emphasised the need for a massive infrastructure programme that would build new transit and intercity rail lines across America. He might be a little light on the details, but then it’s not really his role to be digging in the weeds of specific transport priorities.
In case only small amount of public ride public transit and they are generally poor, they hardly pay much tax or being capable of paying much more. At most you can tax them through the like of sales tax, but that’d be like the last thing you want to do during inflation.
I agree that in cities like Paris where most households use transit, free transit funded by land value or property taxes makes sense as a goal. (If you’re going to make everybody pay €75 a month anyway, much more efficient to add it to their or their landlord’s property tax bill than to maintain a whole system of vending machines/ticket windows, gates that impede crowd flow, ticket inspectors etc in order to oblige them wait in line every month to buy a receipt proving they’ve paid it.) But in jurisdictions where transit users are a minority, I expect free transit to be run into the ground by voters who get no benefit from paying more tax for it. Which rules out every US jurisdiction except NYC (and probably rules out NYC too given the extremely disproportionate influence of drivers in NYC politics).
(In normal times) There are plenty of PT users who are not residents in cities like Paris (e.g. tourists, long distance commuters, etc.).
Free PT in dense urban areas also fills PT up with short trips that would otherwise use active transport.
There are also people who don`t travel on PT enough to need a periodical ticket, such as many retirees and people who live very close to work.
“(In normal times) There are plenty of PT users who are not residents in cities like Paris (e.g. tourists, long distance commuters, etc.).”
You can adopt the Estonian model of giving residents a transit pass while still requiring tourists to pay for tickets as normal (although this means you need at least some form of fare policing, which reduces one of the operational benefits of free fares).
“Free PT in dense urban areas also fills PT up with short trips that would otherwise use active transport.”
I don’t get this argument at all. First of all, if you have a periodical, extra trips are already free, so should we abolish those as well? Secondly, if replacing a long walk with a shorter transit trip saves people time, isn’t that a good thing? They can use the extra time in their lives to spend more quality time with their family, or read a book, or whatever. And if the one thing preventing them from doing this was the cost of the fare, then they are probably in an economic position where they could do with the assistance. People should be allowed to choose between active transport and transit on the basis of what suits their life better, not pushed in one direction by economic necessity.
“There are also people who don`t travel on PT enough to need a periodical ticket, such as many retirees and people who live very close to work.”
Even people who catch PT infrequently would still benefit, and they may find themselves using the system more than they otherwise would. In fact, many places give retirees steeply discounted or free public transport even though they don’t need it to go to work (e.g. London).
Is the Estonian model even good? For example, is ridership in Tallinn high the way it is in Paris or Berlin or the V4 and Nordic capitals? The fact that a country does something does not make it good. It’s worth investigating, but Estonia is not by itself persuasive authority the way high-modal split places like rich Asian capitals or Zurich or Munich is.
The discounts for retirees are a combo of political gerontocracy and “eh, they don’t usually travel at rush hour anyway.” The former is a force to be broken, the latter can be handled through season pass discounts.
I doubt Tallinn ridership is very high given it has a population of only 400,000 or so. And as I noted the downside of its model is you don’t have any of the savings you get from not designing and enforcing a ticketing system. An other way to make tourists pay for public transport is just to institute a hotel room tax (which should also apply to AirBnB and the like). There are German towns that do this.
Discounts for retirees are usually a recognition that they tend to have lower incomes than full-time workers, are less capable of driving or doing active transport, and derive social benefits from not being stuck at home all day. The current DNC leadership is an example of political gerontocracy, cheaper fares for the over-60s is not.
People on periodical generally haven`t driven to a dense area for work and then are just using PT for trips to short to bother with getting the car out of the car park, driving a short distance, reparking, and then reversing the process a little while later. (Yes, free PT can result in subsidisation of motorists (See Melbourne`s ludicrous Free Tram Zone).)
Replacing active transport (walking and/or cycling) with PT increases costs of to the environment, reduces exercise (with accompanying health risks) and makes providing the PT services with enough space get motorists out of their cars (an environmental improvement) most cost intensive.
A significant proportion of people who would use active transport instead of PT for short trips because of fares are doing so out of economic choice (they can afford it but would prefer to spend their money elsewhere). PT isn`t costless and does have to be rationed, with fares being the most efficient way to do this.
This is just nuts.
Sure if I have a pass I’ll hop a bus going my way for a couple blocks if it happens to come along. i won’t do this on a packed bus, and I won’t do it if I have to wait, but what’s the harm here? SOMEBODY SOMEWHERE IS GETTING AWAY WITH SOMETHING!
This is just desperate cluctching at straws. I’m not going to throw away my bikes because a local agency transit pass is attractively priced (which isn’t the case for me here, unfortunately and stupidly and counter-productively.) For certain if local transit were free or even had remotely well-priced passes I would ride more often, and I’d be lazy and hitch-hike occasionally when I might have walked (but not biked), or I might take a bus instead of biking when the weather’s unpleasant, but no, it’s not going to vastly shift mode share, or overwhelm capacity, or lead to gaping deficits.
I can’t even. Is this serious? I can only love a passing tram if I pay for it monthly out of pocket, in addition to paying for it yearly out of three different levels of governmental taxes?
> [If public transit were free, many motorists would be] just using PT for trips too short to bother with getting the car out of the car park, driving a short distance, reparking, and then reversing the process a little while later.
Honestly, though, that still sounds like a pretty big win for reducing downtown traffic congestion and overall vehicle use.
Most North Americans keep the car a few steps from the kitchen. Some of them don’t even have to leave the house because it’s an attached garage. A “short drive” is still in the single family neighborhood. Most of the time the trip doesn’t involve “downtown” and for many of them it never does.
you hit on a good point from a North American perspective. There’s an important part of the population that rarely if ever goes downtown. They live in communities that already have all the services they need. It’s also going to take decades to redo those communities. Downtowns are important and in need of love and redesign, but some tend to over inflate the importance of downtown or idealize what life in a revamped downtown would be
Erick, I disagree that suburban communities have all the services they need, and they definitely dodge paying for services city provides. Sport stadiums, museums, and factories come immediately to mind. Small town mayor lure away businesses with lower than market price tax rate, lower than urban city can afford, to build in open farmland or filled in former wildlife wetland area. Suburban folks with motor vehicles need to be taxed more to pay for their intrusion into open space. Rail transit paid for my motorists can extend reach into establish suburban downtown areas where parking structure are better build and less space waste than in the city.
I used to live in lowertown Ottawa and needed to go out in the suburbs all the time. Now I live in the suburb I never go downtown anymore. If you’re in Toronto or NYC perhaps you got everything but in many cities it’s not the case. Downtowns need to be revitalized in many cities.
You aren’t to able to ‘redo” them because the archetypal trolley suburb/railroad suburb “downtown” was surrounded by trolley ‘burb. It still is. I think that is what New Urbanists have in mind. Plop one of those into McMansionville, it would still be surrounded by McMansionville. The trolley/railroad ‘burbs were developing farmland. Which is relatively cheap to build on. Which is what they also did in McMansionville. Bulldoziing wide swaths of McMansionville would be very very expensive.
So if you have low income because you’re working a low wage job, you’re getting shafted; and if you reach the age were you aren’t working anymore, you get cheaper transit? And if you solve this problem with a reduced pass for poor people, why not open it up to pensioners?
This means you have to abandon season tickets, because they encourage the unrationed use of precious transit. Then people change to the unrationed, free automobile. (Unless you already have road pricing that’s as visible as a taxameter.)
Obviously public financing is different by jurisdiction but where I live every cent of fare collected is less subsidy from senior governments that has generally been the case in Canada. So not just my city. It’s also a subsidy to someone like me who can afford to drive and even at peak I am still faster than transit despite having one of the highest fares in the country, meaning that while money is important there are many factors which you have covered over the years to explain what is required for proper transit.
Proper transit requires proper management but also a political culture that embraces transit and not see this as a necessary evil.
Then fare media is a problem. We used to have a system where employers could deduct your monthly pass cost from your salary. No need to buy a monthly pass. Was cheaper too as savings were split between the city and the users. But in preparation for RFID based system the city cancelled that a year before to make RFID look better than paper based according to media reports (access to information)
It caused people to reassessed how much transit they use and the number of monthly passes dropped and so was the revenue it brought.
Then RFID arrives and it slows things so much that trips that used to take 45 minutes took over 2 hours. Network and schedules are changed in a hurry and an urgent order for 45 buses was passed. Meaning that we would never ever get the expected savings. RFID also made it easier through the website to load some cash and use buses occasionally which caused further revenue drops.
Media tries to find out how much slower and how much money it costed this debacle and we will never know as the city fought media in court to keep this secret.
At this point in my city we know we literally bought buses and hired staff merely to collect fares not to provide an improved service.
So for me free transit is about the efficient running of the transit system and stop the haemorrhaging of public money. We literally cannot afford to collect fares. And it’s been calculated the city could charge the average household 500$ a year in property taxes to cover free transit. Transit users currently spend 1470$ a year and this was supposed to go up.
“Then RFID arrives and it slows things so much that trips that used to take 45 minutes took over 2 hours”
What? Trip time almost tripled due to a NEW FARE SYSTEM? Hard to believe.
Which city are you talking about?
Ottawa, Canada
Right now, public transit operators are still struggling to recover from the financial disaster that was the pandemic. Governments are often unwilling to cover the shortfall resulting from reduced ridership (see e.g. Belgian trains), so it’s really ambitious to expect them to cover a complete zeroing out of fares, let alone that + funding service expansion.
And yes, I’m also baffled at the push by Western governments to increase demand subsidies everywhere while we’re undergoing a supply crisis. Give some financial assistance to the poorest, why not, since by definition they’re getting the short end of the social contract. But public spending should be directed at solving our supply issues rather than doubling down on them.
I’m particularly worried at Euro leaders being unwilling to ask their population to make some modest sacrifices. You’d think a war waged by a rival regime in a nearby country would be enough…
Transit agencies that depend on fares (ie, WMATA) are struggling. Transit agencies that depend on other taxes, primarily sales taxes, are FEASTING.
Also, Alon, I responded to your last post and my comment was never approved?
Diego, I agree with you that increase demand subsidies without matching funding for more transit is baffling. Perhaps Ottawa is unique, but we don’t have much of a choice to go to free transit. The overwhelming majority of transit users pre-pandemic was office workers as we are the national capital of Canada. Gov’t already announced hybrid model BUT also that it will continue to hire outside the national capital region for position that are nominally in departmental HQ in Ottawa. Hence going forward we should not expect more workers to come but less. So to base our funding on fares, which was minimal already in Ottawa, won’t work. We can easily increase our property taxes and perhaps even switch funds from the roads budget which is massive and never subject to cuts. Perhaps that might not work in other cities but honestly the efficiency increase is stunning.
Not collecting fares means that you deprive conservative politicians the means to do a route by route revenue analysis which inevitably means that you lose the network effect. Free transit goes far beyond equity or encouraging more users.
In the US at least, construction costs are so high that savings on operations are unlikely to lead to useful expansion.
Another benefit of free transit is that it allows the benefits of proof of payment– no waiting for people to collect cash fares– without the need to hire fare inspectors, make bus drivers hand out tickets to people who don’t have monthly passes and have either ticket machines, ticket offices, or a mobile app so that people can buy monthly passes. It might make sense to make local busses free in general– they usually don’t make much money, and the busses with high ridership are typically used by the poor. If commuter rail fares are reasonable and if it provides better service than the bus, I’d think people would be willing to pay extra to use it.
“Busses with high ridership are typically used by the poor” reflect exactly what’s wrong with it, that it cannot attract wider population into using public transit. Making transit free isn’t going to help this since driving a car is already financially so much more expensive than buses that the last few dollar wouldn’t count. It is the extra time cost that make most people unwilling to use transit, the headway and the frequency and gaps between bus route coverages that need extra walking. By enhancing transit services and attracting more people to use them, it can make transit be attractive to most people and be part of everyone’s life, and support for it will become across the board instead of something only for the poor.
Doing away with payment also make it difficult to keep track of ridership of each routes, which is needed for planning better service.
Huh? Ever heard about roving people with clipboards and clicker-counters? Or automated passenger counting systems?
Ridership for planning better service? Wouldn’t you need automobile counts to see where service is poor and the competition strives?
Bus companies in Hong Kong have tried to introduce automated passenger counting system from different providers numerous times, none of them work. A bus can be full and it can still display there are 60 empty seats.
Manual counting can only randomly sample the ridership of a particular departure, not the overall trend of every single departure and all the buses in the network. And it also cannot be done too frequently without adding too much operational cost.
Last time when the government forced bus companies to offer free service, a bus company in trying to keep count of ridership number of the day in order to record how much financial losses they have incurred, told passengers to tap their transit cards despite deducting zero and told drivers to record the amount of passengers boarding at each stops, which generated a lot of tension and fictions between passengers and drivers, with many drivers also outright faking numbers in their manual report. Induced demand from such free service and failure as well as lack of motivation for bus companies to match the demand, also caused overcrowding in all bus and train stops, and that passengers have to wait for more than an hour even on routes with ~5 minutes headway as buses arrive and go packed. Regular transit passengers have to take taxi to get to their destination on time.
Automobile count cannot tell you data like this 30-stops bus route have 300 passengers per hour coming from the first 3 bus stops, and thus it is worthwhile to improve operation efficiency and increase attractiveness by operating 3 express buses every hour serving only the first three bus stops then skip directly to destination through highway, to save the time of both the passengers and to make the buses used to transport those passengers finish their trip faster thus enabling more runs each days. It also cannot tell you a bus route have only 100 passengers per hour per direction on the entire route off peak, and thus it should be axed so as to provide service more efficiently through other routes in the network. Not to mention bus companies have no technology to identify how much cars are there on the road traveling from where to where.
And it is much easier to stop passengers leaking from public transit to automobiles, than is to attract drivers changing their mode to buses, as drivers have already spent their money on obtaining their cars, giving up their car will be a big financial losses in itself due to depreciation of the vehicle value after usage in secondary market, and bus services usually aren’t really good enough to compete against cars for people who already paid so much to get their own cars. Bus companies cannot count where cars are heading to/from, nor can they count how many people are using competing transit service either, for example ferries, trains, trams, private buses, fixed minibuses, free minibuses, rapid transit feeder buses, or other public bus companies. The total ridership figures of 7000 public buses operated by 3 main companies, 4000 public minibuses operated by an arrays of different companies and individual as well as triads, and other 7000 private buses operated for various services, in addition to total number for various rail services, are published monthly and annually, but detailed breakdown are considered trade secret. And when it come to triads, it is not uncommon for them to vandalize against vehicle of competing service providers if they think the service have entered their “perimeter” and overlapped with them. They would also intentionally plan routes that overlap with public bus routes and schedule their schedule to depart right before the buses so as to capture ridership from public bus services. It would not be possible for bus companies to monitor and react to such behavior without monitoring the ridership trend of each departures.
London trains calculate passenger loading (approximate) by vehicle weight. I imagine the same could be done for buses…
A train, or even a single train car, can carry much more passengers than buses, and thus the deviation will probably be a lot less. Trains also serve all kind of passengers due to the large number of route combination each trains can serve, thus more likely to have passenger weight like average, unlike buses where a route to market would see more people carrying extra goods, a route to border crossing/international ferry terminal/airport would see more passengers carrying extra luggage, a route to school zones that would see more young students which would be lighter on average, or a route to hospitals where passengers could be more likely to be on wheelchairs or carry some visiting souvenirs. All of these made it more difficult to calculate weight.
Also, most buses nowadays are low floor buses, to ease the boarding of wheelchair users as well as passengers with difficulty in mobility. I don’t think there are sufficient space under the bus floor to fit weighting system inside.
For planning purposes you need statistical data not actual passenger counts. You can never count how many people will ride after making some change anyway, only make educated guesses. Actual counts are not needed unless you are trying to convince politicians you are worth funding, and then only because they don’t understand statistical samples enough to believe you.
The hard part is getting the right statistical sample. Though for most purposes just hire some kids on spring break to count everyone is easy and cheap.
Counting on spring kids is itself ignoring the spring breaks ridership…..
Actual count is needed to see whether you need one more or one less bus in this hour, or that this bus should departure three minutes earlier or three minutes later, to distribute the passengers evenly, to avoid some buses being empty while other buses are so full that some passengers cannot broad the bus. In some busier bus stations, there are station staff standing there every weekdays morning and every evening to check the boarding situation just so that in case the stop become abnormally crowded one day due to unforeseeable circumstances, they can call back to the control center and make either the depot or nearby bus terminal send out an extra buses to clear those passengers. This cannot be done on all bus stops so the detail counts is needed to discover which other stops might have similar problems chronically. And how to fix the problem of passengers unable to board the buses by adjusting departure time and if an additional bus departure is needed then exactly when is the departure needed to best clear the queue. Number of riders after changes are made are then being monitored.
Exactly right.
The lunatic idea that every passenger boarding or alighting from every vehicle must be exactly accounted for at all times is a totalitarian surveillance concept, with nothing to do with service planning. (It also happens to be a line pushed heavily by far gate and “smart card” scammers, what a coincidence. Most transit agencies simply drown in this amount of irrelevant unreduced data, even if their service planning were data-driven, which none of them in my part of the world, sadly, are not remotely.)
Sampling and surveying human behaviour turns out to be a very very very well-studied field. Can’t imagine why…
Henry Miller was writing colloquially — his point being that collection of statistical ridership data can be done by very casual part-time employees, with “young adults in a break from tertiary education” being one example.
I think such mindset could come from some of the “progressive”-leaning people, who believe more in progress toward fair society through redistributing the resource we already have to those underprivileged, instead of helping those underprivileged to develop and grow. And that include transit. So they don’t see growing transit network to benefit both its existing riders and potential bew riders as something that should be prioritized over reducing burden of its current captive riders no matter how poor the state of the transit service is.
df1982 hit the nail on the head–currency-sovereign states aren’t revenue-constrained, the only risk of state expenditures is sectorial inflation in sectors where state acquisition of resources competes with the private sector beyond the sector’s productive capacity. And this is a problem that’s easily solved with taxes, either sectorally targeted or overall.
Alon regularly makes the excellent point that resources aren’t infinite and we should use them efficiently to do the most possible–there’s no excuse for the order-of-magnitude inflated prices in the English-speaking world, or the incompetence and graft that drive them–but there’s no reason to insist that either budgetary allocations to transit, or the overall size of the budget, have to stay exactly as they are.
Similarly, markets are generally a pretty good tool for price discovery, i.e. finding out how The Public assigns relative value to different goods. But if you believe induced demand is a thing–as has been proven over and over for highways; and as drives the real phenomenon of gentrification caused by rapid-transit-access[1]–then present prices and future prices are related in non-obvious ways. Part of why I read this blog is because Alon makes informed analyses from their really good models for how that demand function changes over sufficiently local parts of the curve–but I would be shocked if there weren’t discontinuities or phase transitions (resulting from increased transit access past certain points) that can’t really be predicted by current models. Put another way, those models depend on assumptions about how many people live in an area, assumptions that will become incorrect *because* of improved transit access. So while we shouldn’t squander our (actually limited!) resources, it’s important not to be too pessimistic about the rewards of investment.
Finally, while high inflation is certainly a thing, it’s not the thing most media commentary thinks it is. It is not a generalized rise of prices from “too many people having too much money.” It’s driven by specific sectors. In fact, the used car market alone accounts for 1/3 of it (http://jwmason.org/slackwire/todays-inflation-wont-be-solved-by-the-fed/)–with cars generally, plus energy, being 70% of the recent excess inflation. In this context, *supporting public transit*–like by making it free–means *reduced demand for cars and gas*, and could reasonably be expected to decrease inflationary pressures. Even if you ignore this analysis, let’s look at it a different way: user fares for transit are basically just a tax on people who don’t use cars. And consequently a pretty regressive tax. Taxes fight inflation, but we can choose to use progressive taxes instead.
…now obviously American politics are sufficiently dysfunctional at every level that nothing will ever be fixed. But there’s no reason to let nihilist realism consign us to incorrect theory.
[1] I’ve made a pass at this in other comments here recently, but again, the issue deserves to be addressed head-on. The problem with gentrification in America is that we do not build enough housing, including large amounts of heavily subsidized public housing, and instead choose to ration nice things (and in our major cities, even reserve huge portions of them for people who don’t even live there). When you increase the quality of anything without increasing the supply, the price goes up. But America has spent the last 50 years running a con where we stopped increasing worker wage share and instead gave the Boomers housing-shortage futures for their retirement, so the thought of massive housing development is anathema to literally everyone who already owns something. And this has to be dealt with for any other improvements in quality of life to be possible for the majority of citizens.
Making public transit free wouldn’t lure drivers to public transit any more than *not* subsidizing car fuel. In fact the latter is probably more efficient since car fuel subsidy can easily exists the fare of public transit. And that come with extra benefit of able to actually use those money to improve the system.
* can easily exceed
The majority of public transport spending done by lower tiers of government that are not currency-sovereign.
Free public transport has a tendency to fill up the busier parts of public transport systems with people making short trips they would otherwise use active transport for, which actually likely makes it harder an more expensive to attract people out of cars.
Maybe that is a risk we can take in covid times when ridership is so much below “normal” to begin with.
It is interesting that California got mentioned.
Gov Newsom wants to handout $400 per vehicle in gas rebate debit cars (two maximum per person), to the tune of about $11 billion. It is considered a way for the state to acknowledge that California has the highest gas prices and highest gas taxes in the US (yes, California gas is more expensive than Hawaii). Not only does the state collect a per-gallon excise tax, it collects a sales tax (proceeds are going up with the price increase). BTW: the excise tax is going up automatically for inflation on July 1.
Why not temporarily reduce/waive some of the gas taxes, like Japan/Korea/Taiwan have been doing? That seems more intuitive and reduce the problem of subsidizing people with more wealth (more cars), while actually reducing the burden of those e.g. occupational drivers, and prevent their increased burden being translated into higher inflation. Such temporary waiver/reduction in tax can be written in a way to automatically defunct when gas price came back down below certain price level to prevent them from becoming permanent.
I agree that free transit isn’t as good of a policy as generally affordable fares and investment in upgrades/expansions. Given that ridership still hasn’t recovered from the pandemic, and gas prices are high, I do think 3-6 months of free transit paid for by the Feds as a way to help drivers and bring people bank to transit could be really helpful. The US spent most of its transit investments for the last 60 years building rail lines to the suburbs that are explicitly designed to give suburbanites other options. Why not capitalize on that in drivers’ hour of need and rebuild our transit ridership in the process?
Yeah, so, in the context of a mode shift policy, I can see this working, especially in Europe with the acute need to get off Russian oil. But German government practice is not just to make transit almost free (not quite free, not sure why) but also cut the fuel tax nearly in half – and the fuel tax cut comes from the pro-austerity party, for which a deficit-financed increase in military spending was a big political sacrifice.
In the US, likewise, the practice isn’t to help drivers shift to mass transit. No: Newsom wants to give drivers a rebate based on how many cars they own. To the extent there’s an attempt to rebuild transit ridership, it’s bundled into moral panics about working from home (which is much less common in Europe; Paris and Berlin have recovered peak hour ridership much better than New York has).
isn’t to help drivers shift to mass transit. No: Newsom wants to give drivers a rebate based on how many cars they own.
In California, except for a pitifully small fraction of the population, there is no mass transit. It’s hard to shift people to transit where there isn’t any.
LA and San Diego don’t have public transit, but they can reduce driving, and at a few places it is possible to switch to the trains. But the Bay Area has more public transit, even if it’s bad.
And that’s a small fraction of either metro. Either they live too far from mass transit or the job is too far from mass transit or both.
Free stuff doesn’t work well over the long term. Roads are not actually free, but people in the USA believe them to be (and given the federal motor fuel excise tax rate in the US, they almost are!) and you see what happened – always choked with traffic (or always empty in the hinterlands where I live).
But we’re talking transit fares and here I’m a bit of a hardliner on this. All passengers that take up space in the vehicle pay the same. Don’t care if you are under 16/12/5 or over 60/65 or low income or disabled. Pay the full fare.
Now, you scream that it’s unfair to make everyone pay the same fare. That’s fine. For some groups, you are almost certainly right. So pay for some portion of their fare through a different, existing agency. Agency buys pass, charges their client whatever they feel is right for their clients and off they go to work (or shop or whatever).
This is especially true of what we euphemistically call “non choice riders”, meaning workers exploited enough that they can’t even afford to get to work unless they walk.
How those agencies work out subsidy rates for their clients is up to them, but the *transit provider* should not be involved.
There are a bunch of dirty little secrets that aren’t so secret, that people don’t talk about. Politicians tell them fuel taxes pay for roads and they accept the lie(s). The Federal taxes only pay for Federal highways and any shortfall comes out of general revenue. There is always a shortfall because the pennies per gallon rate hasn’t changed since 1993. The state taxes only pay for state highways and anything else comes out of mostly property taxes and local sales taxes. None of the fuel taxes covers things that are associated with roads like policing them. Or the courts to collect the fines and occasionally jail people.
Some of the discount are for economic reasons as well. Like elderlies tend to have fewer soare money and usually won’t travel on commuting hours, so providing discount to them can help better fill the vehicles during off peak hours. Discount to children could probably incentivize family travel, which also mean extra adult fare revenue for transit agency. Commuter passes can bound your passengers to your service, prevent them from opting for other modes during some days of a month, which could also increase revenue.
Some of the discount are for economic reasons as well. Like elderlies tend to have fewer soare money and usually won’t travel on commuting hours, so providing discount to them can help better fill the vehicles during off peak hours. Discount to children could probably incentivize family travel, which also mean extra adult fare revenue for transit agency. Commuter passes can bound your passengers to your service, prevent them from opting for other modes during some days of a month, which could also increase revenue.
Hi. Is there good research regarding free fares from a whole of society point of view?
I haven’t found much that goes beyond initial high level first order impacts.
thanks
Barry
What are you looking for? Ridership impact, or something else?
Alon, I am looking to understand the holistic impact. We have transport models that estimate increased mode share (usually switching from active travel) and a significant increase in usage. I am looking for a broader perspective to respond, with evidence, to comments in other areas. For example, there is the question of funding. a lot of the discussion assumes that free fares eats into capital/service funding but this is clearly a choice. taxes could rise to compensate or other charge could be applied. Is there any comprehensive review on these choice. the first order impact of mode shift from active travel is considered bad for health but is this true in totality. also those people shifting are benefiting. In terms, of PT fares as payment for service are we clear who is receiving the benefits of PT use. Is it employers, landlords, car drivers or actual users? What does the evidence say. I have seen two studies, one dutch (Rotterdam) and one USA (Washington) that Look at the economic gain to regions from dense PT that indicate that the PT subsidies are a actually a necessary investment to increase GVA.
To conclude because the above is rambling is there solid research available to really determine if PT should be paid for out of general taxes like education (public good?) or should the user pay and if so how much.
thanks
I know the are times when public transit suddenly becomes popular to avoid traffic and when it’s free. During playoff games and World Series in SF, for example, BART gave FREE transit into the city. You would not believe how long lines formed as sports fans jammed station for a free ride. This is what rail transit needs, and urban dwellers benefit by reduced motor vehicle blight.
Some interesting and relevant map:
https://theconversation.com/5-maps-that-show-why-free-public-transport-benefits-the-affluent-most-179847
The logic of that article is perverse. You want to make the rich pay more for public transport? Tax them more. Having high bus fares as a way of helping the poor is akin to the argument that only rich kids go to university, so we shouldn’t cut tuition fees. Well if it costs tens of thousands a year to go to college then only rich kids are going to go.
The argument is actually that the wealthy areas generally have much better PT, where the poor areas are more likely to have poor PT that is sufficiently less usable the most people will drive even if it tough economically for them, so instead of spending tens of millions per month on not charging fares disproportionally in wealthier areas, spending the money on increased services to poorer areas will help more poor people.
What I’ve noticed is that universities, museums, sports arenas, and airports pull rail transit their way, then place burden of paying for it on overly crowded bus transit used by commuters in poor immigrant neighborhoods. So buses are full while transit nearly empty.
Free university would mean constrained university intake, and make many people unable to attend. What’s better would be to subsidize only the poor people and still charging those who are from rich family. This can draw in more resources and allow more people attending university.
People here seem to be able to attend just fine.
Isn’t acceptance rate of universities in Germany less than 30%?
56% of young Germans enroll at a university. Almost 30% of the younger generations have a university degree, i.e., a significant share drop out. Around 40% have a dual education (apprenticeship + vocational school, something like a community college). That’s 70% with a tertiary education.
56% of young Germans enroll at a university. Almost 30% of the younger generations have a university degree, i.e., a significant share drop out. Around 40% have a dual education (apprenticeship + vocational school, something like a community college). That’s 70% with a tertiary education.
But how are students split between university vs other form of tertiary educations? Performance in secondary education?
Basically yes. There are different tiers of highschools. About 50% graduate from the top tier (Gymnasium) which qualifies them to enroll at a university. Yet some of those opt for a dual education instead. The lower-tier schools don’t qualify for university, so most graduates choose a dual education. It is possible to qualify for university after that but only a minority sign up.
Only the most popular university curricula limit the number of admissions, mostly by imposing kind of a GPA threshold (Numerus Clausus). Only med schools have admission tests in addition.
“Germany is doing something similar, in a package including 9€ monthly tickets, a 0.30€ fuel tax cut, and a cut in energy taxes.”
The fuel tax cut and the cut in energy taxes are actually the same. It is only temporary, for three months. Still, your criticism holds and is shared by economists: This is a counterproductive subsidy for heating the planet. It is also regressive as the rich tend to burn more fossil fuels than the poor and, therefore, get a higher share of the subsidy.
Thanks to the Greens, some of the tax windfall following from high energy prices is disbursed back to citizens in form of a one-off lump sum: 300 Euros for every income-tax payer plus 100 Euros for families, and 100 Euros for welfare recipients. This is much more efficient as it rewards energy saving and is not regressive.
That’s true for transport but not for heating.
What aspect are you referring to? They don’t subsidize heating, only petrol, if that’s what you mean.
I’m not sure my post makes sense. What I meant to say was that transport costs stay static as a percentage of income regardless of how rich one is because richer people on average travel more. In contrast domestic energy goes down as a percentage of income.
While richer people have bigger homes and more appliances they are better insulated and their appliances are more efficient.
Which aspect are you referring to? They don’t subsidize heating, only petrol, if that’s what you mean.
@Alon: My last comments as Oreg were discarded. Can you say why?
My spamfilter got drunk.
Ah, great you found it and many thanks for fixing it.
Alon, I agree with another blogger that you get the tax math wrong and make public transit unlikely and inefficient. In 1950’s motorists actually stole fare money from lucrative NYC transit to build bridges expand freeways for motorists. This brought on the popularity of hailing a taxi on a crowded street as shown in movies. Meanwhile, CalTrans in California undercut the world’s busiest ferry system as it planned with GM and Firestone to eliminate public transit altogether. Even in urban dense San Francisco, CalTrans cut “bloody” Bay Shore Freeway right thru heart of the narrow peninsula, and even drafted plans in 1950’s to turn Mission Blvd into a freeway, easing motorist congestion. CalTrans pushed through to start construction on the hugely unpopular Embarcadero Freeway that proved unstable in 1989 Loma Prieta Earthquake. SF is not unique in abuse dished out by overpriced, quality of life reducing motorist projects, especially along recreation rich waterfront property. NYC, Pittsburg, Seattle, Portland, Oakland, Stockton, Boston, Philadelphia, Barcelona, immediately come to mind as places I know well. Residents of these cities endured shadow casting elevated shoreline noise makers, or ground level eyesores motorways that block shoreline access. Even later attempts to overcome shoreline blood blight, overpriced underground systems, like in Boston, create terribly inconvenient transport because these motorways convey steel hulks into downtown where they waste valuable space, introduce accident risk, and generally have no practical transportation value relative to public transit systems. SF endures tourism largely imported into city and left in culture craters called “parking structures”, creating an urban blight in many ways. So, given climate change priority to reduce emissions, now is time to reorder urban space priorities, reduce incentives to expand suburban blight and fuel burner waste into neighboring farmland and wildlife habitat. So, it’s time motorists pay true cost of the luxury single person commute by car. The price of such luxury is the cost of building and maintaining free transit ride system that’s fast and efficient, reaches into suburban communities, and links large cites together with high speed rail. While intercity rail can be sold at discount fare, given time savings over driving and overall time ride needs for the trip, there is definitely a cost by administrative overhead, passenger delay at the turnstile, and energy waste in issuing and verifying tickets as to passengers trying to get somewhere in a hurry. This cost can be entirely eliminated by shifting the expense burden to those ready to pay for it—motorists. In effort to efficiently cage homo sapiens in city to avoid their over population plunder of farmland and wildlife habitat, city life needs to be really grand, and better than boring suburban life. What urban dwellers want is less noise, accident free pedestrian and bicycle pathways, and a landscape free of blight—2 thousand pound sports cars, luxury cars, taxis, and other hunks of junk that clutter streets and create unwanted liability risk for pedestrians and cyclists.
Okay, great, tax motorists – and plug the money into more transit, not free transit. After all, more capacity would be needed to absorb the passengers who are no longer using cars.
Basically, I agree, getting rid of ticketing hassles has huge benefits all the way around, plus the goal is to completely undercut the rationale motorists use to drive instead of ride.
The main rationale motorists use is “the subway takes longer.” The secondary one is “the subway is full of people of lower social class than me.”
And ticketing isn’t a hassle when done right (POP, barrier-free, etc.).
The quality of service can be improved a lot for everyone. The decibel rating of most transit systems are much higher than need be, the head room height of train cars too low, too many stairs, escalators that don’t work, etc. For intra-city service, having different classes of cars and comfort seems reasonable, and so like you say if nominal ticketing is part of trip most people won’t hesitate to pay. Certainly getting tourists to pay up without undue time wasting confusion is reasonable.
Yes? That’s good capital spending; Paris could make the Métro accessible for around 5 billion euros, which figure is thrown around by planners as a scary number proving accessibility is too expensive. This is around a year and three months’ worth of public transport fare revenue in Ile-de-France. Berlin, with both lower unit costs for elevators and simpler stations requiring just one elevator each and not three, is about to become 100% accessible.
Maybe I should blog about first-class cars on subways? They’re a bad idea; from time to time they’re tried, but the experiments I know of, like in Paris, have failed.
I agree that class ticketing on subways is bad idea, but this does lock-in the need for automobile transport for upper class, right? In medieval Barri Vell neighborhood in Girona, Spain the constituency for cars remains stout among a few who still have garages build into the 2,000 year stone built passages, where this traffic is more than just nuisance to mostly crowded pedestrian cobblestone streets. The accessibility issue to streamline bicycle, scooter, and wheel chair access is expensive no doubt, but in many cases that extra expense was mistakenly planned in.
They say driving is faster when they want to avoid brown people on transit. Because they know saying they don’t want to ride with brown people is rude.They say there is no place to park when they want to avoid anyone at all that isn’t exactly like them.
From Flatbush to Long Island city right now, the time by car is 51 minutes via Manhattan, 56 minutes direct. Time by public transport is 1h8. So driving is faster to be fair.
If I needed to drive via my nursery school or the supermarket driving will be a lot quicker.
Efficient transit system require metric to be measured. You cannot measure that easily, or have motivation to improve them, without new number on transit’s accounting book.
the experiments I know of, like in Paris, have failed.
If 90 years can be considered an experiment. Though apparently there was a ten year phase-out period. 80 years. Perhaps it is that the first class passengers all moved to someplace with off street parking and drive places they wanted a first class car for? The last surviving private commuter club car disappeared a few years ago. Around the same time bar cars evaporated from the last holdout, the New Haven line. That’s more than a few years ago.
Someone forwarded me this post about a plan in Israel to make transit free for old people only. It strikes me this is a great idea, for the following reasons:
1) It is socially equitable because old people are generally limited in income.
2) Old people tend to have more trouble with the constantly changing fare systems in recent years (cards and now smartphones) – this will no longer be an issue for them, and collecting fares from them will no longer delay everyone.
3) The harm caused by free fares (delinquents and homeless people hanging out on transit) is not caused by old people.
4) Free fares potentially overload transit with people who would otherwise walk – this is less likely with old people who don’t commute to work, and less problematic if it does happen because walking is hard for them.
In today’s societies, old people tend to be the richest (on average, obviously). The poorest are students and young parents, in particular single parents. Therefore, free or subsidized transit for pensioners is regressive. Alas it is a very common subsidy in many places.
Check out census data for median income by age. Over 65s have the lowest income of any group, even 15-24s. They also have the least ability to supplement their income by working more or getting support from parents, and the highest likelihood of getting hit with high medical or aid/nursing expenses. They also have the least ability to walk rather than take transit, and possibly the lowest likelihood of having other people to help them with errands. Most of these limitations are especially true of the portion of the elderly population which is likely to take transit rather than driving. So no I would not say that transit subsidies for the old are regressive.
They are generally very wealthy compared to younger people however. And their cost of living is lower as they don’t work.
So you are saying the Census Bureau is wrong?
No, it just depends on measurement choice; the poverty rate for elderly people in the US is below national average, while that for children is much higher.
That said, this is not a universal experience. In Korea, elderly poverty rates are very high (this graph goes Korea, then Australia, then Mexico, then Israel, I believe all defined as relative poverty). Israel has high income poverty rates for elderly people, and then the question is how one imputes their home ownership, which is very high.
The nine page application for SNAP benefits, a.k.a. Food Stamps in New York State.
Click to access 4826.pdf
The application for FOOD assistance wants to know if you own or rent and what your rent or mortgage payment is. And if the utilities are included. It’s more complicated than cash income, though for most people it does have a relationship.
Retirees often rely more on their wealth than on their income. According to the Census Bureau, 80% of those over 65 own their home—twice the rate of those under 35. The age group with the highest median net worth in the U.S. is 65–74, closely followed by 75+. Most have the maximum support their parents were able to give through inheritance.
Medical bills are a unique problem of the only developed country without universal healthcare. But this problem is reflected in the wealth statistics and they still come out on top.
You can have a low income but still be sitting on a pile of assets/wealth (common for retirees). Need to look at income and assets to determine what someone can afford.
There’s also the Sam Vimes boots theory which old people benefit from – https://samvimesbootstheory.com/
If the assets include a paid off house the line on the benefits application for rent/mortgage payment is -0-. There is also a line on the SNAP application for “other assets”. If you are sitting on a giant IRA and tens of thousands of dollars in a money market account… people who have that take money out of the IRA which then becomes income and they aren’t thinking about applying for SNAP benefits because it isn’t a problem when they swipe the debit card as the supermarket…. If you are clueless enough to apply the answer is “you could have more income, take money out of your IRA”….
If you want to get into SNAP program details, suggest you read the eligibility criteria first. From https://www.ny.gov/services/apply-snap: “What if I have savings? Most households applying for SNAP no longer have to pass a savings/resource test in order to get SNAP benefits. This means that the household’s assets (stocks, savings and retirement accounts, etc.) are not considered when determining eligibility.” From the USDA website, “A home and a lot” are not counted towards eligibility determination for SNAP.
So yes, you can be sitting on a large pile of non-income-producing assets and still be considered eligible for poverty reduction programs.
People with large piles of assets don’t have a lot it in non-income producing ones. They might be accepting lower income for higher capital gains but they don’t have a lot non-income producing ones. Even the vacation house or houses, they are expecting capital gains out of those. For them or the estate.
I did read the form when I checked to see if the New York State form was still nine pages long. I know it’s nine pages long because I’ve helped people fill it and the HEAP form out.
There is a section title “Resources”
I suggest you read the form because, as you put it “stocks, savings and retirement accounts” are specifically named.
In the line about liquid assets, which the form calls money, savings are named.
In the line about less liquid assets it says:
“Other financial assets? (For example, stocks, bonds, retirement accounts, savings bonds, mutual funds, IRAs, trust funds, money market certificates)”
Whether or not you retirement account/IRA gets evaluated depends on your age. You can’t sit on a huge IRA when you are 69. You can’t sit on a huge IRA when you are 71 either, you are old enough to be required to make a minimum withdrawal.
And you can’t claim poverty because the property taxes on you winter condo and summer cabin are so high. There’s a line where you have to reveal the winter condo and the summer cabin too.
Adiron, old people vote, so therefore the benefits systems are generally setup to work better for them than for younger people. In Britain an old couple of pension credit who own their own home outright in say Harrow in London get a similar disposable income to about the 75 percentile worker who lives in a rented house.
And that’s excluding the other benefits old people get like free transport and another 40 hours week of free time.
neighborhood was different 50 years ago when they bought the house.
Americans aged 65–74 are the group with the highest median net worth, closely followed by 75+, according to the Census Bureau. 80% of them own their home, twice the rate of the 25–34 age group. Most have inherited all the support their parents could give them. High medical bills are a particular problem in the only developed country without universal health care. Retirees still come out on top.
The form may ask you to list them but as per the Supplemental Nutrition Assistance Program (SNAP) Source Book published by the New York State Office of Temporary and Disability Assistance (dated 7/20/11) and Administrative Directive 07-ADM-09 also published by the Office of Temporary and Disability Assistance, the Resource test is no longer applied to households applying for SNAP benefits, unless the household has a member who has previously been sanctioned for a SNAP program violation.
Back to the original point of this discussion, it is possible and common to have a large amount of wealth tied up in assets which produce a small amount of income, no matter your age. However, this is more common for elderly people, with some of them becoming loud voices bemoaning some kind of means testing or other paring of benefits and who little they receive in income whilst sitting in their expensive mortgage free house, demanding that the taxpayer effectively subsidise their lifestyle.
Do they drive their brand new Cadillac to the office to drop off the forms and go to their granddaughter to celebrate with lobsters and steak, that their granddaughter bought with her EBT card or does the granddaughter driver her brand new Cadillac to their house with the lobster and steaks? It’s Cadillacs because the myths you are believing are from 1975 and it was Cadillacs back then.
Are they asking questions about assets for the fun of it?
They want to know how much money you have because it’s much more common for people show up when they are running out of food and don’t have any money. Some of them show up after they’ve run out of food. One of the first questions they ask is how much food is the house. If they have run out of food and money there are emergency arrangements.
People who live in a large expensive house had the kind of income to buy one. That is also the kind of income that means they have retirement arrangements beyond whatever the governments old age pension is. The stereotype is that they leave the Midwest or the Northeast for condo in Florida that they bought 20 years ago. Or the condo they bought in Spain for Europeans. Which was part of their retirement planning. If there are some money problems they talk to their broker, not social services.
People who live in a more modest expensive house don’t. They both had to work to afford it. There are two Social Security payments coming in every month. They can live frugally and keep it. One of them dies one of the payments stops. The property taxes still have to be paid, the insurance premium doesn’t go down and it doesn’t cost a lot less to heat and light. The survivor ends up in the social services office because they will run out of food soon and the house hasn’t sold. SNAP keeps the survivor fed and HEAP will help with the heat/light but it doesn’t pay property taxes or insurance premiums. Social services wants to know what the homeowners insurance payment is for a lot reasons but there are a few people who stop paying the insurance. Which doesn’t work out well, if the house burns down, the food, clothes, household pots and crockery are gone and there is no way to replace them. Or insurance to pay for temporary housing.
Things may work differently on your planet.
I look at free transit through the lens of “tragedy of the commons”.
Another version is; “Nobody washes a rental car”.
I don’t think free transit would work in the US. It would become a rolling homeless shelter, amongst other problems.
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The comments about seniors and housing remind me of all the California Prop 13 discussions. The value of a house goes up, the government collects more in property taxes, independent of the owners income. Without Prop 13, long time property owners would see their taxes triple. During covid, the rent holidays and eviction freezes were not accompanied by tax holidays for the landlord. This is why California has all-time record budget surpluses right now.
The state doesn’t levy property taxes.