Wednesday, September 16, 2020

Post #10: Should Transit Fares Be Eliminated?

 There’s nothing like a pandemic to make you rethink the basic assumptions of modern life.  Because of COVID-19, we are rethinking the way we work, the way we shop, the way we socialize, the way we educate and a dozen other aspects of our daily routine.  Who knows how long all of this will last?  Some say that we are defining a new normal and we will never go back to the way things were.  Others think we will return to the old normal as soon as an effective vaccine is widely available. 

During all this “rethinking,” there has been a lot written about what all of this means for our society.  One of the most thought-provoking articles that I have read is entitled “In a Pandemic, we are all ‘Transit Dependent’ “ by Jarret Walker (Bloomberg CityLab).  If you have any interest in this topic, I encourage you to read the whole article.  For the purposes of this post, I’m going to selectively quote at length several sections that I think are particularly interesting:

“Right now, essential services have to keep going. It's not just the hospital, the grocery store, and basic utilities.  It’s the entire supply chain that keeps those places stocked, running, and secure. Almost all of these jobs are low-wage. The people using transit now are working in hospitals that are saving lives. They are creating, shipping and selling urgently needed supplies. They are keeping grocery stores functioning, so we can eat.


In transit conversations we often talk about meeting the needs of people who depend on transit. This makes transit sound like something we’re doing for them. But in fact, those people are providing services that we all depend on, so by serving those lower income riders, we’re all serving ourselves.”


. . . 


“What’s more, transit has always been doing that. Those “essential service” workers, who are overwhelmingly low-income, have always been there, moving around quietly in our transit systems, keeping our cities functioning. Too often, we have patronized them by calling them needy or dependent when in fact everything would collapse if they couldn’t get to work.”

. . . 

“ . . . we have to stop talking about transit as though ridership is its only purpose, and its primary measure of success . . .” (1)

This article was obviously written with the pandemic in mind and with a particular focus on the enormous impact that the pandemic has had on transit systems across the country.  It did not advocate for zero-fare transit, but reading it made me think about transit in much broader terms.  If transit is more than just a service to move mostly poor people from one place to another, then what are those other services that it provides and which ones are important enough to be considered primary?  And if ridership numbers (and ridership fare revenues) are not its primary measure of success (and a necessary source of funding) then how should we measure success and how should we fund transit?

The Economic Importance of Movement

Hundreds of years ago, the locations of ‘home’ and ‘work’ were very tightly aligned.  Farmers lived adjacent to their fields, miners often lived in company housing near the mine shafts, artisans and merchants generally lived above their shops.  Most people not only walked to work, they walked to market and to church and to social gatherings as well.  Even if you had access to an oxen-drawn cart or a horse-drawn carriage, the working classes weren’t likely to travel very far and so their economic and social worlds were very tightly constrained.

Fast forward to today and we have built our economies and our cities around the assumption that everyone -- workers, shoppers, students, babysitters, etc. -- can reliably travel 10, 20 or 30 miles on demand and without complaint.  Midwestern cities in particular, are so spread out that it is almost impossible to live a normal life without the ability to travel significant distances on a daily basis.  And midwestern transit systems generally have such limited coverage and frequency that meeting transportation needs means owning a car for the vast majority of households (typically well over 80 percent of all households).  The end result is that the average household spends over 15 percent of their budget on transportation costs.  

This is a burden that most middle- and upper-income families are willing to pay because we value the freedom that comes with car ownership.  For lower income households, however, the need to own a car (or two) often causes trade-offs with other essentials such as food, shelter, medical care or clothing.  For these households, the ability to reduce the amount spent on transportation would have significant quality-of-life benefits.

From a business perspective, attracting a reliable workforce that is willing to work for modest wages is increasingly difficult.  Low-wage jobs represent a large proportion of all jobs, particularly in service sector industries such as retail, health care, and leisure and hospitality.  For businesses that are heavily dependent on low-wage workers, transit is a form of business subsidy.  Without transit, they would have to pay their workers more and might potentially face increased costs for things like on-site parking.  This is particularly true in big cities with extensive transit service and high transit usage such as New York, Chicago or San Francisco.  It is less of a subsidy, although still important, in most mid-sized midwestern cities where transit moves a smaller percentage of the workforce.

Finally, increasing workforce mobility provides other economic benefits.  From the worker’s perspective, increased mobility means a expanded range of potential jobs, which is particularly important for low-income families who are trying to work their way up the economic spectrum.  Increased job opportunities mean increased chances for career advancement.  From a business’s perspective, increased mobility means a larger pool of potential job applicants which should result in better labor performance and increased profitability.

In short, providing transit service is a way to make the economy of the city work better, with benefits to both labor and business.  Unfortunately, analyzing the benefit versus the cost of subsidizing transit has historically been difficult.  It may be, however, that having an effective transit system is now becoming a minimum requirement for even participating in the corporate relocation game.  The recent search by Amazon for a second headquarters included a requirement of direct access to rail, subway or robust bus routes.  

“The emphasis on transit seems to be creating, in particular, something of a come-to-Jesus moment for cities where high-level service has long been an afterthought. Cities with legacy subway systems, such as Boston and Washington, D.C., have risen to the top of more than one ranking; so has Denver, with its relatively forgiving traffic and expanded rail investments. In weeks of speculation and showdowns, a lack of transit connectivity has been one of the great presumed disqualifiers for other towns.” (2)

Of course, the Amazon headquarters was definitely an outlier in economic development terms, especially for midwestern cities who probably didn’t stand much of a chance right from the beginning.  But a functional and resilient transportation infrastructure -- including transit -- is likely to be crucial for cities that want to be considered an up-and-coming economic power.


Additional Benefits of Transit


Aside from moving people to work, transit offers other benefits that are probably less understood and less appreciated.  The fact that these impacts may be hard to measure doesn’t mean that they should be completely ignored:


Transportation congestion.  Each person riding transit is one person not driving a car, thus theoretically reducing congestion.  And the cost of congestion is not just time wasted in traffic.  At a sufficient scale, it might be a multi-million dollar road widening project that is no longer needed.  I think this is a difficult benefit to sell, however, until roadway congestion gets to a level higher than is common in midwestern cities.


Reduced environmental impact.  Twenty people riding transit have less environmental impact than twenty separate car trips.  Tailpipe emissions are an obvious measure, but there are other elements to this such as reduced particulates from tires, reduced stormwater runoff from parking lots, etc.  If younger generations continue their concern about climate change and environmental health, the value of this benefit will increase significantly.


Improved transportation safety.  Transit systems have significantly fewer fatalities per passenger mile traveled than individually driven cars and trucks.  To the degree that low-income
drivers can switch to transit, the impact may be disproportionately higher given that the alternative might be a trip in a poorly maintained vehicle or a vehicle without proper insurance.


Improved livability.  Increased mobility is important from a social perspective as well as an economic one.  Transit improves access to educational options, healthcare options, food options, and cultural options.  Again, translating this benefit to dollars is difficult, but the benefit is real, particularly for low- and moderate-income households.


Setting the Price for Transit


Virtually all forms of transportation have been supported and subsidized by some level of government.  But at the same time, all forms of transportation (with the exception of walking) have historically imposed some out-of-pocket cost to the user.  I have to buy a ticket if I want to fly commercially or ride on Amtrak.  I have to purchase a car and gas if I want to drive.  Even biking requires that I purchase (or rent) my own bicycle.  And transit riders, of course, have historically had to pay a fare.


I think this dual form of financial support -- part paid by government and part paid by the individual -- reflects our societal view of transportation having dual benefits.  Efficient options for moving people and things benefits our society as a whole -- hence the subsidy -- but also benefits the individual -- hence the cost borne by each user.  There is an undeniable logic to this approach.  If I decide to fly to New York to visit my daughter, the benefit is primarily mine so why shouldn’t I have to pay the cost of an airline ticket?


There is also the argument that putting a price on a thing or service sends a signal about how much of that thing or service is needed.  If I can get hamburgers for free, I’m likely to eat far more hamburgers than I need.  The price on a hamburger is a signal to the marketplace that regulates supply and demand to keep them in reasonable balance.  For a service like transit that seems to constantly be the subject of debate in terms of whether we provide too little or too much, having a price would seem to be a reasonable way to not only share the cost with users but also indicate the level of demand and thus the appropriate level of supply.


The problem is that there is no true marketplace for transportation.  The web of governmental subsidies and regulatory support is so complex and impenetrable that any semblance of a market is mostly an artificial facade in place to fool ourselves into thinking that our decisions are a logical result of supply and demand.  There has been no real analysis of societal versus individual benefits in setting the level of governmental support; there have simply been political choices that have been made which seemed reasonable (or politically palatable) at the time.


In the 1800s, for example, our country decided that train travel was crucial to our growth and so enormous subsidies were granted to the railroads to spur rapid expansion.  In the 1900s, the emphasis shifted to the automobile and so trillions of dollars were spent on the construction and maintenance of streets, highways, bridges and parking lots.  So perhaps the relevant question is what choices do we as a society want to make relative to transportation in the future?


Is Transit a Library or a Swimming Pool?


Government provides a wide range of services to the public and, presumably, all of them are generally beneficial to the community.  But the way in which those services are funded can vary widely from service to service.  Swimming pools, for example, charge a fee to people who want to use the pool but pools almost never cover their costs through fee revenue.  They are almost always heavily subsidized by local government because giving residents the option to go swimming on a hot summer day is seen as an important benefit to the community.


Libraries, on the other hand, almost never have user fees and are generally funded primarily through property taxes.  Why the difference?  Perhaps our society places a greater emphasis on the core purposes of a library (education and an informed public) than those of a swimming pool (recreation and relief from the heat).  If that is correct, where does transit fall?


I think it is certainly possible to argue that transit is an essential service in modern society and that providing it at no cost to the user would create a community benefit, both economically and socially, that is greater than the cost of eliminating transit fares.  This will be particularly true if the transit system provides a high level of service connecting residential areas for low- and moderate-income residents with a wide variety of daily destinations -- but especially employment centers with a large proportion of service-sector jobs.  Unfortunately, the argument is not so strong or compelling that it is likely to convince most cities to reverse the historical precedent of charging fares for riders.


The Kansas City Experiment


As it happens, my hometown of Kansas City is one of a small handful of major cities moving toward free transit service on a regular basis, not just during a pandemic.  And it has happened in two different ways with differing funding sources.


First, Kansas City opened a streetcar line in 2016 that from the outset did not charge any ridership fare.  The initial system is a modest 2.2 miles in length, but plans are in motion for two extensions that will increase the corridor to more than six miles.  The system has been reasonably successful with ridership levels growing over time and a substantial level of real estate investment in the corridor over the past few years.


The system is operated by the Kansas City Streetcar Authority which is funded through local taxes from a transportation development district.  This district covers an area surrounding the streetcar route by roughly a third of a mile.  Within the district, there is a 1-cent sales tax, a special assessment on property, and a special assessment on surface parking lots in the downtown.  This is an interesting approach to funding since studies have shown that property values and commercial rents tend to go up near transit routes, particularly fixed route systems such as streetcars or light rail. (3)   Consequently, the additional taxes (at least in theory) are offset by an increase in economic value.


In a second but unrelated initiative, recently elected Mayor Quinton Lucas has been pushing to eliminate fares on Kansas City’s bus system.  Last December the City Council voted unanimously to approve his plan, but the source of the necessary $8 to $9 Million dollars has not been identified.  This initiative is possible in Kansas City because fares currently account for only 12 percent of the total system funding, and eliminating fares also eliminates fare collection costs so the net impact is somewhat less than 12 percent of revenue.

The “no transit fare” initiative appears to have a primarily social equity focus emphasizing the need to improve transportation options for low income families.  One problem, however, is that Kansas City’s bus system has historically had relatively low ridership and relatively infrequent service on many of its routes (30 or 60 minute intervals).  Eliminating fares may help boost ridership numbers to some degree, but frequency of service is often as important if not more important to potential transit users.  This puts the bus system in the extremely awkward position of needing a significant budget increase to increase the frequency of service at the same time it is eliminating fares.


In any case, transit planning should not be about existing riders, or existing jobs, or existing traffic patterns.  Transit planning is a long-term play that must be part of a multi-pronged effort to improve urban life.  The land uses that are allowed to develop (or redevelop) along transit routes will play a huge role in long-term success.  There should be a concerted effort to supplement transit lines by allowing increased density and a wide variety of land uses.  In addition, transit corridors should be a focal point for sidewalks, bike routes, scooter sharing and bike sharing facilities to bolster multimodal trip options. 


To really make a difference in travel patterns, transit needs to do more than simply get people to their job -- it needs to be able to provide access to a wide range of daily destinations so that families can function without a car or with only one car instead of two.  The beauty of a no-fare system is that it becomes easy to use for short trips to the grocery store, or the barbershop, or the dry cleaners.  With no fare to worry about, a six-block trip is much more likely than if a $1.50 fare is required, which means that it is much more likely to be a frequent piece of everyday life rather than just a tool for commuting to work.


Will the Kansas City experiment work?  I have no idea, but I think it is a worthwhile effort to improve the quality of life for low-income households and may well pay economic development dividends as well.  I certainly prefer this type of an urban initiative to multi-million dollar subsidies to sports stadiums or convention hotels.


Thoughts?  As always, share your thoughts and ideas by leaving a comment below or sending me an email at  Want to be notified whenever I add a new posting?  Send me an email with your name and email address.




  1.  “In a Pandemic, We Are All ‘Transit Dependent’ “; Jarrett Walker; Bloomberg CityLab, April 2020.

  2. “Amazons HQ2 Hunt is a Transit Reckoning”; Laura Bliss;  Bloomberg CityLab, September 2017.

  3. “Want Higher Property Values and Lower Transportation Costs?  Move within a Half Mile of Transit.”;  Mass Transit, October 2019.

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