PHASE I—KICKOFF ACTIVITIES, LITERATURE REVIEW, AND BACKGROUND DEVELOPMENT

Task 1. Amplified Research Plan and Kickoff Meeting

Introduction

The objective of this task was to initiate the project and gain additional guidance.

Approach

Work on the Amplified Research Plan (ARP) commenced immediately after the start of the contract. This plan reflected any additional guidance received after the selection of the proposal. Upon approval, the research team conducted a virtual meeting to discuss the plan and the progression of the project. Based on insights obtained from the kickoff meeting, the research team made necessary revisions to the ARP and started to work on the technical work tasks.

Deliverables

The research team submitted the ARP, an annotated outline of Phase I, as well as the meeting minutes from the virtual kickoff meeting, including necessary revisions to the ARP.

Task 2. Literature Review/Scan and Outreach to Selected State DOTs

Introduction

The objective of this task was to scan the current literature and documentation to understand the characteristics of transit agencies that have implemented zero-fare transit, benefits, risks/costs, and outcomes.

Approach

Literature Review

Fare-free transit, also known as “zero-fare,” “fareless,” and “pre-paid” transit, refers to transit agencies that, under certain circumstances, do not collect a fare from some or all of their riders. The history of fare-free policies in the United States spans many decades, with the first instances of fare-free policies being in the 1960s (Volinski 2012). During the COVID-19 pandemic, the rate of transit agencies offering fare-free transit in the US increased dramatically. However, many transit agencies are now considering whether to resume collecting fares, especially given uncertainties surrounding fare-free transit funding, which had been easily accessed during the pandemic due to the creation of new, one-time sources of federal funding such as the Coronavirus Aid, Relief, and Economic Security Act, the Coronavirus Response and Relief Supplemental Appropriations Act, and the American Rescue Plan Act.

The primary focus of the literature review was on US-based, fully fare-free policies for which there are relatively recently published reports. While there are successful, well-documented fare-free policies implemented outside of the US (e.g., Cats et. al. 2017, Storchmann 2003), this review focused primarily on North American policies since they are most relevant to state DOTs; however, a brief review of international examples is presented first to set the global context.

Additionally, there are a very large number of US agencies that offer partial fare-free policies such as university pass programs or free rides for young children accompanying their parents. However, reports that focus exclusively on partially fare-free transit (Brown et. al. 2003, Metaxatos et. al. 2012) have not been included. This literature review focused instead on both academic and grey literature (e.g., reports) about fully fare-free policies, which are less widespread and can provide the clearest observations of the impacts of a fare-free policy. There have been a large number of government reports on US-based, fare-free policies and their impacts throughout the decades, going back as early as the 1970s (Perone 2002, Studenmund et. al. 1982, USDOT 1975). However, except for two reports, most of the papers and reports contained in the following literature were published within the last decade. The two exceptions were published in 2012 and 1994 and were included for the quality and relevance of their information. These recent reports and papers were identified using Google and Google Scholar, using search terms such as “fare-free transit.”

The literature review was split into three parts; the first part included a review of international academic literature. The second part included a review of Cooperative Research Program reports and US-centric academic literature. The third part was based on a review of transit agency and/or state DOT reports and programs in the United States.

Outreach

Based on the aforementioned review findings, multiple states were identified for outreach. The outreach effort intended to talk directly with state DOT offices and professionals directly engaged in the decision-making and operation of fare-free transit implementation. Semi-structured interviews were conducted using a virtual meeting lasting approximately 1 hour each. An interview guide was developed to lead the discussion during the semi-structured interviews.

Agencies included state DOTs and individual transit authorities, as seen in Table 1 and Table 2. The breadth of the interviews covered a range of small to large states, small to large transit authorities, and a variety of funding sources and methods. The primary interviews were conducted with the state DOTs, and the follow-up/additional interviews provided excellent insights and a better depth of understanding.

Table 1. Primary State Level Outreach

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² (Fare-Free Transit Evaluation Framework, The National Academies Press, https://nap.nationalacademies.org/read/26732/chapter/3)

COVID-19 were common, although many have ended.

• There are a limited number of publicly available transit agency/DOT reports about fully fare-free policy outcomes; to the extent of the researcher’s knowledge, the transit agency in Kansas City was the only location that had both pre- and post-implementation reports publicly accessible.
• Transit agency/DOT reports provide a good background for the current state of fully fare-free practices in the United States. Namely, many transit agencies are considering extending their fare-free practices as they begin to transition from using COVID relief funding for fully fare-free transit and are searching for relevant experiences from peer agencies in order to determine the feasibility of continuing free fares for riders.
• The advantages of fully fare-free transit span several timely themes, such as economic health, social equity, and environmental sustainability. Common benefits include ridership increases, increased access to opportunities for economically vulnerable rider groups, an increase in transit agency productivity, improvement in a community’s quality of life, driver and rider satisfaction, and a reduction in greenhouse gases.
• Potential disadvantages of fare-free transit were also identified. These included heavy passenger loads, added pressure to the budget, concerns about securing sources of funding, and at larger agencies, complaints about disruptive riders and difficulty adhering to schedules due to increased ridership.

Summary of Outreach Effort Findings

• The path forward with fare-free transit is driven in large part by the challenges due to eliminating or reducing fares. The funding mechanism to offset the loss in fare revenue and the willingness of partners to participate (or continue to participate) is key.
• State DOTs are generally neutral on the decision to implement fare-free transit with some states providing guidance, support, and funding opportunities to offset loss of fare revenue beyond the COVID relief funding.
• The complexity and scale of the operation are also important. Small transit systems that have a limited range of services are much easier to implement than large complex systems with multiple modes and regional partners. Even small systems that add new modes (i.e., micro-transit) may find it necessary to implement a partial fare-free implementation to overcome operational challenges. Larger, more complex systems also tend to approach this topic from the starting point of a partial fare-free implementation.
• Defining the objective of the implementation is critical to long-term success. Ensuring that the defined goals and commitments match realistic expectations to make the long-term sustainability of the implementation possible.

Task 3. Phase I Report and Virtual Project Panel Meeting

Introduction

The objective of the Phase I Report was to document the research findings obtained so far, including the input received in Task 1 and the findings from Tasks 2 and 3. The key objective of the virtual project panel meeting was to review the Phase I findings and prepare for the completion of Phase II-IV tasks.

Approach

The research team developed the interim report covering the methods and findings of the first phase of the project. The follow-up virtual panel meeting provided a great opportunity to have an interactive discussion with the NCHRP staff and project panel and gain feedback on the findings so far, gaps to be addressed in Phase I, and any initial guidance on the development of the scenarios that will be developed and evaluated in Phase II.

Deliverables

The research team submitted the Phase I report, minutes from the virtual project panel meeting, and an annotated outline of the Phase II plan.

The results of both the literature review and the outreach provided excellent insights that were most helpful in progressing the project forward. Specifically, the findings helped guide the development of the annotated outline, analysis scenarios, and the design of the practitioners’ tool. It was particularly important to understand how these findings could frame the development of the tool, highlighting, for example, the importance of addressing a range of possible alternatives in a variety of settings. It emphasized the need to assess not only the benefits of implementation but also the challenges, particularly considering that some impacts may not be initially intuitive (second-order impacts) but critical to understand for managing the expectations of policymakers.

While there have been many steps between this stage in the project and the tool development, the initial findings began at this stage to shape the direction of the effort. The following provides a summary of initial ideas that were used to set how Phase I findings help set the stage for the tool’s development in the next phases of this project:

• Understanding the “Design User”: It is first helpful to consider the “design user” of the tool. In this case, it appears that the user is a staff member at the DOT or transit agency tasked with evaluating the decisions associated with fare-free policies and preparing a thorough presentation to their leadership or a governing board. The transit community is very helpful and freely shares their experiences. Many issues, while new to a staff member or an individual agency, are not new to the industry. The first step is often to reach out to peers to find out how they worked through the evaluation process. It is hoped that the tool in its final form will be a comprehensive and thoughtful guide to evaluating the options for fare-free implementation in a specific setting. While agnostic in perspective, the tool should provide the ability for the user to evaluate the impacts of this policy implementation and establish/manage reasonable expectations for the policy body.
• Adaptability to a Wide Range of Options: Fare-free service has been implemented in the US in a broad range of forms and settings. A consistent answer regarding the success of fare-free service is “It depends.” This includes a system completely without fares to a system that has partial implementation in various forms. These partial implementations include pass options for specific groups (low-income, youth, etc.), fare-free service by mode (bus, rail, micro-transit), and fare-free service by time of day (peak, off-peak, evening). Understanding these options and the particular setting or scenario is critical to a comprehensive review.
• Consideration of Justice, Equity, Diversity, and Inclusion: On the surface, the provision of a fare-free system can and will address equity issues associated with lack of funds,

unbanked riders, riders without credit cards or smartphones (or lacking data access). Looking a little deeper to understand the second-order impacts, such as limiting the ability to expand service to a traditionally underserved area or impacting service reliability and vehicle condition (funding choices), needs to be considered as well for a comprehensive review.

• Understanding Perceived/Actual Impacts and Proper Mitigation: There are positive and negative aspects of fare-free service. The tool should not only identify these attributes but also provide options to mitigate the impact. An example is the possible increase in the occurrences of disruptive passengers in a fare-free setting. Disruptive passengers are a part of the provision of transit service with or without fare-free service. While this issue does not appear to be overwhelming in fare-free implementation, it can at least be perceived as a concern/issue. Mitigation strategies such as increased security and policies such as limiting the ability to remain on the vehicle for more than one circuit on the route without exiting the bus and waiting for the next vehicle need to be included. The tool should aid the user with not only the awareness of issues but the guidance on options to lean forward and bring solutions before they manifest as problems.
• The Role of Funding Sources: There are many sources of funding for transit operations, with farebox revenues being just one. In some settings, the funding to offset the can be provided by the state or local communities. In some settings, the farebox revenue is very low, particularly relative to the cost of fare collection and processing. It is very important to understand the impacts of losing this revenue stream in areas such as local matches, the impact on university/employer funding programs (why participate if it is now free for our group), requirements for fare recovery rates, and bond covenants.
• Understanding Ridership Impacts: Fare-free service has the potential to increase unlinked passenger trips. Depending on the setting, this may be an increase in usage by the same passengers on the system now or new passengers. It may or may not increase the shift away from single-occupant vehicles. The tool should provide a better understanding of the possibilities to manage expectations going into an implementation.
• Providing Evaluation Techniques: The tool should provide the means of calculating the benefits and costs holistically. An interesting example of a perspective on fare-free service is calculating the cost per new rider. The tool should provide options to present the choices for policymakers with both quantitative and qualitative aspects.
• Understanding Second-Order Impacts: Providing fare-free service on buses currently experiencing lower ridership may not be a hard decision. What is the impact on service for disabled passengers (doubling a zero-fare is still zero)? Is the increased service demand affordable? How does this implementation impact regional service and fare agreements? Does this implementation impact the funding formulas for Non-Emergency Medical Transport? The tool should provide the right questions to ask at a minimum.