SUMMARY

Sustaining Zero-Fare Public Transit in a Post COVID-19 World: A Guide for State DOTs

Fare-free or zero-fare transit services have generated a great deal of interest in recent years. Fare-free operations unquestionably address many transportation equity issues. However, consideration of the long-term viability of these transit services must be carefully evaluated as these policy/programmatic decisions are made. Some transit agencies and state departments of transportation (DOTs) implemented fare-free service prior to the COVID-19 pandemic; health concerns, along with significant levels of relief funding, prompted widespread implementation at the height of the pandemic. With this extra funding no longer available post-pandemic, state DOTs and transit agencies are struggling to determine their path forward with fare-free transit services. The purpose of this study was to develop guidance and a tool to aid practitioners in the evaluation of fare-free transit services from a state DOT perspective. In practice, the guide and tool can also be used by transit agencies performing similar evaluations. The tool can be found on the National Academies Press website (nap.nationalacademies.org) by searching for NCHRP Research Report 1126: Sustaining Zero-Fare Public Transit in a Post COVID-19 World: A Guide for State DOTs.

The spreadsheet tool development process was instructive and provided the opportunity to investigate many different aspects of this policy issue. The intent is not to advocate for or against fare-free transit services, but rather to allow informed decision-making that considers all aspects of the issue. Use of the practitioners’ tool is straightforward, allowing for consideration of various benefits/disbenefits of fare-free transit services. The tool was primarily designed to evaluate full (i.e., universal) fare-free transit services; however, with thoughtful consideration of input variables, the tool can also be used to evaluate partial (e.g., targeting specific riders, modes, areas, lines) fare-free implementations.

The research team concluded that the choice to start, continue, or stop fare-free transit operations is generally dependent on the needs of the customer base, the availability of funding to offset the loss of fare revenue, and the support of policy officials. Specifically, the development of the guide and tool yielded several important considerations for state DOTs when discerning the best path forward. Six key considerations are detailed in the following.

Consideration 1: Customer Needs and Goals

Transit is, at its core, a people business. Understanding customer needs and challenges is essential to a successful transit system. For example, providing fare-free services for a system focused on traditional commuters may not address the needs of a rider who does shift work or needs to run multiple linked trips during the day in their role as a caregiver. Removing the cost of the service will certainly help those in need, but it may not solve all of their challenges as a stand-alone effort.

Consideration 2: Transportation Equity Benefits

Fare-free transit services can address many transportation equity challenges. Passengers who do not have credit cards or smartphones, who are unbanked, or who have limited funds available will be helped. This aspect is likely the biggest driving force in favor of fare-free transit services.

Consideration 3: Operational Benefits and Cost Savings

Almost universally, fare-free transit services increase ridership to some degree. This increase may be attributable to the same riders (particularly low-income riders) taking more trips rather than to new riders shifting modes from motorized vehicles to transit. Boarding is not hindered by fare collection, and boarding through front and back doors is an option. Many of today’s driver–passenger conflicts are eliminated without the need to debate transfers, fare discount policies, and so forth. Costs associated with fare collection operations/maintenance, fare media, farebox/ticket vending machine purchases, cash counting, and armored car services can be eliminated. While these costs may not fully offset the loss in fare revenue, they are an important consideration. In areas with infrequent users, such as vacation or tourist destinations, riders do not need to understand the fare structure or the process for buying tickets to take advantage of the transit services.

Consideration 4: Replacement Funding Requirements

With some exceptions (clarified in the tool), the implementation of fare-free transit services will likely result in a net cost to a state DOT or transit agency. The magnitude of the net cost is particularly difficult to overcome as the size of the agency increases (as well as the more urban an area is). The long-term success of a fare-free program is often based on the availability of a sustainable funding source as an alternative to fares. Deferring capital investments and some maintenance costs to offset lost revenue might work for a short period but is untenable in the long term.

Consideration 5: Potential Disbenefits and Second-Order Impacts

Real or perceived security issues concerning the increased occurrence of disruptive or all-day riders are potential disbenefits of fare-free transit services. These security issues, and the potential increase in passenger–passenger conflicts, need to be addressed from the outset with reasoned policies and appropriately scaled enforcement assistance (i.e., the use of armed security personnel/police should not be the first action). Many, but not all, state DOT and transit agencies participating in this study reported observing no significant change in these incidents, but proactive efforts can head off problems and build public confidence.

Second-order impacts can result from the loss of available revenue for the expansion of services or the timely replacement and maintenance of vehicles and facilities. While not widely reported as an issue, limited resources might prevent the purchase of additional vehicles to meet demand if overcrowding were to occur. Paratransit fares are typically twice the regular bus fare. In this case, if the bus fare is zero, then the paratransit fare is also zero. If a large latent demand for paratransit services exists, overall operating costs may need to increase to meet the demand associated with fare-free services. A similar phenomenon may occur for microtransit services. Thoughtful policies for no-shows are very important.

Consideration 6: Full Versus Partial Fare-Free Transit Services

In cases where full or universal fare-free operations are not practical, partial fare-free operations offer an alternative. Partial fare-free transit services typically target specific riders, modes (e.g., bus, rail), areas, routes, or times of day in an effort to address community needs and equity concerns. Defining the zero-fare eligibility parameters requires care to balance the partial reduction in fare revenues with the cost savings from reduced fare collection expenses.