Free transport: does opening up the railways make sense?

26 March 2018 (Last Updated March 23rd, 2018 15:17)

As part of short-lived, experimental initiatives in a number of cities across the world, transport authorities waived fares on certain public networks to encourage ridership and fight pollution. However, some believe this model could work on a permanent basis. Does free public transit really make sense economically?

Free transport: does opening up the railways make sense?
Nowhere in the world do passengers pay the full costs of their public transport facilities. Credit: Franz Spitaler on Unsplash

An affordable, reliable public transportation network is the backbone of every city. More than just a means to an end, it empowers citizens to lead full, productive lives and spurs social mobility, all in a relatively climate-friendly way.

But at times, the price of public transport – particularly in big congested cities where living costs rack up pretty quickly – is seen as a deterrent to ridership. As such, a growing community of advocates contend that fare-free public transport (FFPT) is a robust, realistic model for urban transit.

At its simplest, FFPT is defined as public transport funded in full by means other than collecting fares from passengers, be it at national, regional, local government level or by commercial sponsorship of businesses.

Justifications behind the idea are undoubtedly compelling. Firstly, trials have shown that FFPT does contribute to the improved mobility of certain segments of the population, such as low-income residents and the elderly. Secondly, there’s the obvious environmental gain of incentivising people to leave their cars at home.

Today, the reality is that nowhere in the world do passengers pay the full costs of their public transport facilities, as they are partly subsidised by the state. But FFPT isn’t as rare a phenomenon either, as can be seen on the Free Public Transport website, which provides a constantly updated list of cities that offer some form of free transit to their residents or visitors.

Tallinn: a leader in free public transit

Photo by Ilya Orehov on Unsplash

As the first European city to offer a completely free transport network for residents, Tallinn, Estonia is seen as the de-facto world leader in FFPT, and it provides a fascinating case study.

The city government introduced the policy in January 2013, after a public referendum favoured the scheme. The decision was taken with the purpose of achieving a modal shift from cars, as before Tallinn waived its transport fees, ridership had been steadily declining.

For the first ten months the scheme only covered buses and trams, but in October 2013 Tallinn waived fees on its commuter trains also, by signing an agreement with Elron, Estonia’s nationally owned train company, under which the city offered to pay compensation for loss of ticket income.

Five years since the scheme was implemented, Dr Oded Cats, assistant professor at Delft University’s Department of Transport & Planning, published a report into the lessons learned from Tallinn.

Cats’s analysis indicated clear benefits. A year in, public transport usage increased by 14%. During the first quarter of 2013, traffic congestion in the city centre was down 15% compared with the end of 2012, while car use throughout had been reduced by 9%.

But how did the city make the scheme work financially?

“A year into the scheme, public transport usage increased by 14%.”

The explanation lies in Estonia’s tax laws. There, a share of income tax is charged by the municipality with which a person is registered. At times, even after former residents move away, they continue to play their income tax into their city of origin.

“This is especially prevalent among students and people who migrate from the countryside and feel affiliation towards their place of origin and thus prefer to support it financially,” Cats wrote.

The FFPT model worked because, to have access to free public transport, the passenger had to be a Tallinn-registered taxpayer. Initial calculations estimated that more than 12,000 formerly unregistered Tallinn residents had to sign up to fill the gap left behind by the absence of ticket revenues. Shortly after the scheme was introduced, about 19,000 people registered – effectively generating a profit for the municipality. In fact, the city claims to have turned a €20m-a-year profit each year since then.

However, Daniel Baldwin Hess, associate professor of urban and regional planning at the University at Buffalo School of Architecture and Planning, published his own analysis, criticising the scheme. Hess argued that transit ridership increase was lowest among working-age commuters, one of the target groups, and that €15m annually from tax revenue was used to fund free public transport.

“Although it would be valuable for transport managers in other cities to learn about this experience,” he wrote, “the Tallinn fare-free public transport programme provides scant transferable evidence about how such a programme can operate outside of a politicized context, which was crucial to its implementation in Estonia.”

Would FFPT work on the railways?

Photo by Peter-Paul Moschik on Unsplash

Not only is Tallinn unique in its dedication to and breadth of FFPT implementation, but it is also one of the few cities that expanded the scheme to its rail network.

As Cats pointed out, “it is a very exceptional development among cities to include the train in the fare-free public transport. The train is nearly everywhere excluded from this kind of local [or] regional agreements”.

Indeed, many schemes that feature free public transport are heavily reliant on buses. Does the economic model change once train travel is thrown into the equation?

Campaigner Alexander Berthelsen doesn’t think so: “This has mostly to do with the fact that most cities that have implemented FFPT are smaller cities and thus only have buses,” he says. Berthelsen has been working on public transport and urban planning issues from an environmental and social justice perspective for over ten years, and runs the Free Public Transport website.

“I wouldn’t say that the economic situation changes when talking about public transport on tracks, it’s still only a question of substituting the income from ticket sales with an equal amount of money from taxes, either on corporations, land or income.”

But could FFPT truly work in a crowded capital city such as London, where daily ridership is sky-high?

“I think it would work even better in a big, congested city,” Berthelsen says. “One of the reasons for introducing FFPT is to raise the modal share of public transport versus cars, which of course would yield bigger results in a very congested city compared to a smaller city that might not have problems related to car traffic on the same scale.”

He points to examples such as Paris, Brussels, Salt Lake City or Seoul, which all organised fare-free days on a temporary basis, usually in response to dangerous levels of air pollution.

“Tallinn is one of the few cities that expanded the scheme to its rail network.”

In January this year, Salt Lake City introduced Free Fare Friday during inversion season, a meteorological phenomenon taking place in the winter months in Utah, which leads to the trapping of pollutants in the air. Throughout the day, ridership on commuter trains increased by more than 66%, while light-rail line usage was up 32%.  Although the day was considered a success, Utah Transit Authority reported that the scheme wouldn’t be feasible on a permanent basis, as it struggles with limited capacity and could not afford to cover the cost of increased service.

Seoul’s mayor Park Won-soon announced a similar scheme last year, after the city declared its struggles with fine dust ‘a disaster’. Won-soon pledged free public transportation services on high-pollution days, despite an estimated loss of around KRW3.6bn ($3.2m) a day, arguing that “the value of human beings is far greater than that of money”.

Paris, Warsaw and Brussels all had similar schemes, and in March this year, the German Government announced its intention to introduce FFPT in its most polluted cities  to cut emissions and help Germany meet its EU air quality targets.

Asked whether he believes this model would be realistic from a financial point of view – not only in Germany but everywhere else – Berthelsen is adamant: “Of course this would be realistic, it’s only a question of political will. Do we want a system where a millionaire and an unemployed person pays the same amount to use the public transport, or do we want people to pay for it in a more just way through some kind of taxation?

“To reverse your question: is it realistic from a climate perspective that people who use public transport instead of cars have to pay so much money for tickets to be able to move around freely? Shouldn’t we encourage people who make an environmentally sound choice and try to nudge people who don’t in the right direction?”