Public transit across America is in crisis. The New York subway may have to cut service to 40% of pre-pandemic levels. The Washington Metro is threatening to remove late night service…again…as ridership hovers around 80% of pre-pandemic levels.
It doesn’t have to be like this. Public transportation is not a luxury for individuals and it is not a luxury for cities. Yet it is often treated as such, especially in car-loving America. Before the pandemic, American public transit systems were both expensive and insufficient except in a very small number of cities.
Why Public Transit Should Not Be Funded By Fares
The traditional means of funding public transit is, of course, fares paid by passengers. This has been the case since the invention of the Omnibus in 1826. (Ferries are, of course, older). Early public transit was the province of a middle class who couldn’t quite afford to hire a private carriage.
Then omnibuses became streetcars. Rails allowed the same number of horses to transport more passengers, prices dropped, and hello industrial revolution.
In the 1950s, though, the car culture killed the streetcar in most cities, and since then public transit has been an afterthought.
Except that, for the people who rely on it, it’s vital. And for city economies it’s even more vital.
There are X groups of people who rely on public transportation:
- Poor people who are simply unable to afford a car. The poorest generally rely on buses (which are often the least reliable).
- People who are unable to drive because of a disability.
- People who have chosen not to buy a car for environmentalist reasons.
- People who could afford a car, but would prefer a more expensive home downtown over a long commute.
- Out of town tourists who flew in and don’t want to or can’t afford to rent a car, or who don’t want to drive on the wrong side of the road.
There’s obviously a lot of overlap between 3 and 4 here. But two of the three groups here have no choice but to rely on public transportation. Group 5 is important to the economy of many cities.
So, public transit and its support is a progressive policy in the economic sense: It disproportionately supports the poor. Who, of course, are the least able to pay fares.
But funding by fares also puts the system dependent entirely on ridership.
Isn’t That a Motivation to Provide Good Service?
You would think so, but that’s not how it tends to work. The systems with the highest fares also tend to have the longest headways (times between buses and trains), shortest hours, and most delays.
Attracting riders has not historically been a priority for transit systems; instead, they rely on having a captive audience of people who have to commute. Transit systems also generally receive subsidies to keep fares reasonable, or to handle shortfalls in revenue.
So, What Happens When Ridership Drops?
When ridership drops, fare dependent systems eventually have to cut service (or worse, spending on safety). Cutting service then forces more riders to find alternatives (or just to stay home…) Which turns into a vicious cycle that was hitting systems even before the current crisis.
COVID-19 has dropped ridership not just below sustainable levels but far below. Systems still need to run because essential workers need them to get to work. And economic recovery can’t happen if people can’t get around.
Because the systems are funded dependent on demand, when demand goes away, so does funding; but this leaves a minority of people who need public transit to, say, get to a doctor’s appointment, to work, to help their family, in the lurch.
The only answer at this point is for the government to step in with bailouts, which are not always politically popular. Indeed, conservative pundits are arguing that it’s better to shut down DC Metro altogether, permanently, and replace it with…uh… Subsidized loans to buy a car, apparently. Never mind that there isn’t enough road space or parking if everyone who used to take Metro drives into the city.
I’m not going to give the individual concerned air time by linking his article, but he clearly didn’t understand a few things. (For example, he thinks anyone earning $60,000 a year can afford a car, when that’s barely enough to not be homeless in this ridiculously expensive city). If you’re curious, it’s currently the first non-WMATA link under “should the Washington Metro shut down.”
Nobody is actually taking this guy seriously, but without further government funding the system will have to cut and cut until…well, nobody can use it.
The Radical Idea — No More Fares
Last year I spent a pleasant few days in the Baltic city of Tallinn, Estonia. I didn’t use public transport…I walked everywhere because the weather was gorgeous and I needed to burn off all of that Estonian food (mmm….sausages).
If I had, I would have had to pay. However, if I lived in Tallinn, then I could use public transit as much as I want to. For free.
Limited free public transit does exist in America. I’ve used the free Charm City Circulator buses in Baltimore when visiting the city, as they run right past the train station.
And a number of American cities have already stopped collecting fares, with the largest being Kansas City. It’s under serious discussion in Boston. In many of the smaller cities, it was an easier move because fares were a much smaller portion of revenue.
Another issue: Enforcing fare jumping is expensive and has led to civil rights questions, especially in New York. In one high profile incident, nearly a dozen police officers pulled their guns on a 19-year-old on a crowded subway train.
It’s a lot less hassle just to let everyone ride for free. Public transit should not be a money-making endeavor.
How To Fund Fare-Free Transit
The biggest question is how to fund it. New York has dismissed the idea because they think it’s too expensive, but is it? Here are a few things that could be considered:
- A tax on companies that have offices downtown, based off of number of employees. Many businesses already pay transit benefits to their employees, effectively subsidizing the system in return for tax breaks. A system could surely be come up with to get them to directly subsidize it without paying a lot more.
- Local sales tax, which has already been used to fund fare free systems, but has the problem of being highly recessive (sales taxes always hit the poor harder).
- A local payroll tax split between employers and employees. It would not have to be a lot and low income employees could be exempt.
- Toll roads. By charging tolls on busy roads, people will end up paying for the convenience of using their car and subsidizing those who choose the often slower option of public transit.
- Parking taxes. Same idea here, make it cost more to park and then use that money to improve transit.
- A dedicated fund from general taxation revenue. This was being considered in D.C., but with revenue having plummeted is probably a non starter at present.
- Charging high fares to tourists (Las Vegas already does this) on the grounds that they aren’t paying into the system other ways. When I’m a tourist, I will gladly pay this kind of thing.
In truth, it would probably take some combination of the above, possibly combined with commercial sponsorship (Amazon? Hey, Amazon…). But it could be done, especially in systems where fare revenue is already a small fraction.
The Case Against Fare-Free Transit
In order to be fair (or fare?) I should probably at least briefly discuss reasons not to go fare-free. Some pundits think a token fare is better. So, here are some reasons:
- Homeless people will take up all the seats. Anyone who knows me knows that I’m not going to take this one seriously. If they’re going to do so, they will…they’ll either jump the turnstile or beg for the money.
- Kids will ride the bus just to cause trouble. This has happened with fare free pilot projects, but it also hasn’t happened. The answer is probably to give the kids something better to do.
- People won’t value something if it’s free. Again, I don’t really buy this one.
- Free transit will rapidly become hugely overcrowded. The answer here is, of course, that it’s proof there was unmet demand and that you need to raise more money and run more buses or trains.
- It will increase obesity by discouraging walking and biking. I’m…not entirely sure of an answer to this one.
There are legitimate arguments, but most of them are symptoms of other social problems that free transit brings out into the open.
Charging a very small token fare, such as 50 cents, might answer these problems while still fixing the issues that fare dependency is causing in DC and New York.
The primary reason why public transport should be free is that the most vulnerable use it and need it. Yet good public transport systems that are not dependent on ridership to build up the service needed to increase ridership benefit everyone. Including the people who still insist on driving their cars.
Call me a socialist if you want, but I would love to see more work done with fare free systems. And I would gladly pay a small tax to not have to worry about the transit system I need going away when it’s most needed.