Planning Magazine

Can Zero-Fare Transit Work?

Fareless transit could address equity and ridership issues exacerbated by the pandemic — if we can figure out how to pay for it. Here's how some cities are making it happen.

Article Hero Image

After the pandemic hit, Kansas City, Missouri, expanded its existing limited zero-fare program to make the bus and streetcar free for all riders. Compared to other cities, the system saw a smaller dip in ridership over the past year. Photo by Matthew Endersbe/iStock Editorial/Getty Images Plus.

Across the country, transit agencies and cities are considering scrapping or reducing fares to ensure access for disadvantaged communities. The moves come after the pandemic highlighted inequities, as the majority of those who continued to ride buses and trains were lower-income essential workers, often people of color.

"The goal for transit is building equitable cities," says Art Guzzetti, a vice president at the American Public Transportation Association (APTA). "We have this opportunity to do things a different way, invest in a different vision. Zero fares is a strategy to address that."

Critics caution, however, that the loss of fare box revenue could result in services being cut or in more financial headaches for fiscally strapped transit agencies. Some say making fares free could attract more riders experiencing homelessness and could give rise to a spike in unruly behavior and criminal activity on board.

But a growing number of transportation officials say it's time to reexamine the fare system and improve social equity in transit.

In the Washington, D.C., area, the Washington Metropolitan Area Transit Authority's staff is recommending that the agency launch a pilot program that would reduce fares for low-income riders, eliminate a $1.50 transfer fee between rail and buses, and lower seven-day bus pass prices. Boston officials, meanwhile, are in the initial stages of planning a pilot program that would offer free bus service in some areas that were the hardest hit by COVID-19. And in Los Angeles, the Metropolitan Transportation Authority's board approved a plan to move ahead with a 23-month fareless pilot program for students and low-income riders.

The issue has even gotten attention on Capitol Hill. In March, U.S. Sen. Edward Markey and U.S. Rep. Ayanna Pressley, both Democrats from Massachusetts, reintroduced the Freedom to Move Act, which would offer $5 billion in grants to transit systems to go fare-free.

Transit in turmoil

Public transit was hit hard by the pandemic. In the early months, ridership plummeted 76 percent nationally as commuters worked remotely, transit agencies enforced social distancing, and riders stayed away for health and safety reasons.

Ridership has been improving since then, but it was still 62 percent lower nationally in the fourth quarter of 2020 compared with the same period the previous year, according to the transportation association. It was down an estimated 51 percent the week of May 30.

Many transit agencies did away with fare collection early in the pandemic to help minimize contact between riders and operators, instituting rear-door-only boarding on buses. Most agencies later returned to collecting fares — though some have not.

In Kansas City, Missouri, transit officials started a zero-fare program four years ago, first for veterans, then high school students, then later for social-service safety-net clients like domestic-abuse victims, says Robbie Makinen, the transportation authority's CEO. By the time COVID-19 struck, it was a logical move to make rides free for all, he says.

The transit system, which runs buses and a streetcar, didn't see as big a dip in use during the pandemic, Makinen says. Ridership sank to 60 percent of its previous numbers and is now back up to 80 percent, with 30,000 to 40,000 passengers a day. Makinen attributes that stability to the zero-fare policy.

The financial question

"Whenever you say free transit, everyone goes crazy and says it's not free; someone's paying," Makinen says. "But the return on investment for empathy, compassion, for social equity, far outweighs the return on investment for concrete and asphalt. Let's invest in people, in our workforce."

Compared with transit systems that depend more heavily on fares, revenue from that source in Kansas City was under 10 percent of its budget, or about $9 million, according to Makinen. On average, fare revenue covers 30 percent of transit agencies' operating costs, says Chad Chitwood, an APTA spokesperson, though it varies from system to system.

To make up for revenue loss, Kansas City officials agreed to cover half the missing revenue, and the transit agency paid for the other half by cutting management costs. Eliminating fares actually saves nearly $1 million a year, Makinen says, because that's how much it takes for new fare boxes, collections, maintenance, and picking up and transporting the money.

The zero-fare program will continue into 2022 and could be made permanent. "We believe social equity is critical," Makinen says. "All transit agencies have been so concerned with ridership. They base everything on it. But when you look at it a different way, it's whether people have access and options to be able to get around."

But making up for lost revenue may not be as easy for other transit agencies that rely more heavily on fares.

"That forgone revenue is a big deal," says APTA's Guzzetti. "If you do this and have a big hole in your budget as a result and service is in jeopardy, that's a problem."

Congress has helped, with its three COVID-19 relief measures together allotting nearly $70 billion to transit agencies as a stopgap. But to achieve social equity in transit in the long term, Guzzetti says, federal, state, and local governments will need to make additional investments.

Los Angeles recently approved a pilot program to offer free rides on LA Metro to students, then low-income riders. Further expansion depends on financial sustainability, officials say. Photo by Stella Levi/Getty Images/iStock Unreleased.

Los Angeles recently approved a pilot program to offer free rides on LA Metro to students, then low-income riders. Further expansion depends on financial sustainability, officials say. Photo by Stella Levi/Getty Images/iStock Unreleased.

In Los Angeles, a recently approved pilot program could offer free rides on LA Metro — first to students in K-12 and community colleges, then, several months later, to low-income riders. But the board first wants a full financial report about how the estimated $321 million plan would be funded, as well as assurances that changes wouldn't hurt service or the maintenance program, says LA Metro spokesperson Rick Jager.

"We're going to take a hit," Jager says. "The board wants to know where we're going to get the money from. If it's satisfied, they'll move forward with implementation."

If the nearly two-year project proceeds, officials also plan to evaluate its financial sustainability, how it's affecting ridership and service, and whether any security problems arise.

LA Metro is one of the nation's largest transit systems. It carried 1.2 million daily passengers on its subway, light rail, and buses pre-pandemic, Jager says. When COVID-19 hit, ridership dropped to about 300,000. Now it's returned to about 600,000.

The proposal aims to promote social equity, expand economic opportunities, and increase ridership, Jager says. About 70 percent of the system's riders have lower incomes, and they are mostly people of color who make less than $35,000 a year.

Most of LA Metro's revenue comes from voter-approved local sales taxes, which generate billions of dollars a year. But if the agency were to make all rides free, it would need to make up at least $250 million a year in lost farebox revenue, says Jager.

"The thought is to make this permanent and systemwide, eventually, if this pilot is a success," he adds. "That's what our board wants to do. But they want to make sure it's financially sustainable."

Safety concerns?

Not everyone is on board with the concept.

"It's a terrible idea. It will chase away a lot of paying patrons if it hasn't already," says Dorothy Moses Schulz, professor emerita at John Jay College of Criminal Justice in New York and a former police captain at the MTA Metro-North Railroad, a New York suburban commuter rail. She says letting passengers board for free would encourage more people experiencing homelessness to ride back and forth all day, driving away regular customers. It also could present added security threats, she adds.

But Kansas City's Makinen says public safety incident rates on transit have dropped 35 percent since zero fares started. The reason: 85 percent of incidents were over fare disputes, he says.

While Makinen concedes that his system is seeing more people experiencing homelessness on buses, he says the agency is addressing that by instituting a policy against "loop riding," so that when passengers reach the end of the line, they have to get off. And instead of placing armed police officers on buses, he adds, the agency is working with homeless-service agencies that have started to put outreach teams on buses, offering services and spotting problems.

"Homelessness is not a transit issue," Makinen says. "It's a community issue."

Jenni Bergal is a staff writer for Stateline. This story was reprinted with permission from Stateline, an initiative of the Pew Charitable Trusts.