This report presents a framework for transit practitioners to evaluate the potential benefits, costs, and trade-offs of implementing fare-free transit. This framework was informed by a transit agency survey and interviews with staff from transit agencies, community organizations, and transit advocacy groups.
The report has five chapters:
- Chapter 1: Introduction provides context for what fare-free transit is, why most transit agencies collect fares, why some transit agencies consider fare-free transit, and how transit agencies can evaluate whether fare-free transit is right for their community.
- Chapter 2: Using the Fare-Free Transit Evaluation Framework provides practical guidance in the form of 10 steps to get organized, make a plan, and evaluate fare-free transit alternatives.
- Chapter 3: Fare-Free Transit Evaluation in Practice reviews the current state of the practice of fare-free transit evaluation. This review was informed by a transit agency survey and interviews with staff from transit agencies, community organizations, and transit advocacy groups.
- Chapter 4: Transit Agency Case Studies includes case studies that represent agencies with full fare-free, partial fare-free, and not fare-free transit at different points of the fare-free evaluation process. These case studies were developed to inform the evaluation framework and provide more detailed examples of how fare-free transit has been evaluated at transit agencies of different sizes across the United States.
- Chapter 5: Opportunities for Future Research proposes opportunities for future research to support transit practitioners’ ability to evaluate fare-free transit including impacts of fare-free transit, funding for fare-free transit, and fare collection cost and revenue reporting.
What Is Fare-Free Transit?
In this report, full fare-free transit and partial fare-free transit are defined as follows:
- Full fare-free transit includes transit agencies that do not collect fares from any riders.
- Partial fare-free transit includes transit agencies that do not collect fares from specific groups of riders, on certain routes or transit services, during certain times, or in defined areas.1
Both full and partial fare-free transit can be implemented as policies or programs. A fare-free policy represents a transit agency decision or governing policy to not collect fares from some or all
What’s in a Name?
Fare-free transit goes by many names, including “zero-fare,” “fare-less,” and “pre-paid.” Some transit agencies have found that the terminology used to describe free fares can influence how the public and stakeholders view the policy or program. Proponents of alternative names refer to the fact that transit is never “free,” regardless of whether the rider pays a fare upon boarding. This report uses the term “fare-free transit” to refer to policies and programs that eliminate fares for some or all riders.
1 Section 5307(d)(1)(D) of the Federal Transit Act requires federally subsidized transit providers to provide at least 50% discounted fares on fixed route transit during off-peak hours for older adults, people with disabilities, and Medicare cardholders. Many transit agencies go above and beyond this requirement by providing discounted fares to qualifying groups during all hours of service or by providing free fares to these groups. For this reason, this report focuses on transit policies and programs that extend free fares to other groups of riders, such as youth and riders with low incomes.
riders. A fare-free program is a planned set of actions that are administered by a transit agency to achieve transit agency or other local goals, such as a program to provide fare-free transit to riders with incomes below a defined threshold or a pilot program to test the impacts of fare-free transit. While fare-free transit exists on a spectrum of fare policies and programs that includes discounted fares, this report focuses solely on the evaluation of fare-free transit.
Why Do Most Transit Agencies Collect Fares?
Historically, fares have been used as a tool to support the operation of transit service. Transit agencies in the United States have roots in for-profit, private companies that collected fare revenue in exchange for services. Even when most transit agencies transitioned to being publicly-run, fares remained an important source of transit agency revenue (Smerk 1986). The percentage of operating costs recovered through fare revenues is called farebox recovery. Farebox recovery varies by transit agency and across transit modes. In 2019, the average for all transit systems and modes in the United States was 32%, with fixed-route bus averaging 21%, and commuter rail averaging 50% (FTA Office of Budget and Policy 2020).
To fully fund transit operations through fare collection, transit agencies would need to regularly raise their fares to keep pace with inflation and changes in costs to operate service, like a business raising prices commensurate with costs. However, because local, state, and federal government officials view transit as a public service that provides valuable benefits to the community, governments are willing to subsidize transit service to keep fares relatively low. Additionally, some transit agencies can bridge the farebox recovery gap with additional revenue generated from advertisements and partnerships with local organizations and businesses.
Fares also have non-revenue benefits to transit agencies that encourage the continuation of fare collection. A widely held belief in the marketing and business sectors is that consumers do not value free services the same way that they value those with a price attached. The price signals to a consumer that a specific good or service has a specific value, and this belief has been echoed by some transit agency staff and members of the public during conversations on fare-free transit (Business Telegraph 2021). Charging fares is a way for transit agencies to show the public that transit service has value to a community and to remind riders of that value whenever they ride. By having riders pay fares, transit agencies can contribute to the public sense that users of transit services are paying their “fair share” of the costs.
Charging fares is also a tool to influence behavior. Fares can be used to manage demand, particularly during times of the day with the most travel. Surcharges during peak commuting hours can encourage those who have the option of traveling at other times to do so, thus easing capacity concerns during periods of high demand (Walker 2010). Fares can also present a financial barrier to entry. Some transit agencies use fares to discourage riders from taking multiple trips with no destination.
Why Are Some Transit Agencies Looking at Fare-Free Transit?
In the United States, transit agencies have implemented full and partial fare-free policies and programs for decades (Saphores et al. 2020). Full fare-free policies and programs are seen as tools to increase ridership, improve operating efficiency, save costs, advance accessibility and social equity, and reduce congestion and greenhouse gas emissions. Partial fare-free transit can be a tool to advance similar transit agency goals with less of an impact on farebox revenue.
The concept of fare-free transit has gained momentum in the United States in recent years, especially as some larger transit agencies are evaluating and piloting full or partial fare-free transit. The
recent momentum can be attributed, in part, to political and social justice movements that push for governments to focus on social equity. In this report, social equity is defined as an intentionally disproportionate distribution of goods, services, rights, and opportunities to advance traditionally marginalized groups (Deka 2004). Advocates for fare-free transit, from community groups to transit agency staff to elected officials, have petitioned for policies and programs to improve transit access by eliminating financial barriers (Kębłowski 2020). They argue that these barriers reduce the ability of people from traditionally marginalized groups to access the fundamental right to mobility (Volinski 2012, People’s Transit Alliance n.d.). Additionally, farebox recovery ratios for many transit agencies have been trending downwards in recent years while operating costs have increased. Given these trends, advocates have questioned whether spending money to collect a shrinking pot of revenue from transit riders, many of whom face multiple barriers to economic security, is worth it (Hess 2020).
Many advocates see transit as a public resource that should be fully subsidized, akin to roads, libraries, and parks (Kębłowski 2020). Transit benefits the community not only by providing a mobility service but also by providing a sustainable alternative to driving. As such, some local and state governments have cited fare-free transit as a tool to get more riders on transit and achieve community congestion and climate goals. It should be noted that there is little evidence that fare-free transit has reduced car use unless it is combined with other tools to increase the cost of driving, such as congestion pricing, parking pricing, or travel restrictions on personal automobiles. Contrary to the argument that consumers only value services that have a specific cost, many drivers continue to place value on parking spaces despite the existence of large amounts of free parking. If communities want to incentivize travelers to choose transit for their everyday trips, they can prioritize lowering or removing fares, rather than encouraging driving with parking subsidies. A central issue underlying the debate over fare-free transit is whether transit should be treated as a public good or whether it is a service for which users should pay their “fair share.”2
While some transit agencies have had success with fare-free transit, it is not a one-size-fits-all approach for achieving transit agency and community goals. As described previously, most transit agencies rely on fare revenues to fund a portion of transit operations. With limited operating budgets, transit agencies must make decisions on how to best spend those dollars. Without a sustainable source of replacement revenue, many transit agencies would find it difficult to maintain existing service levels and expand service in the future.
Even if transit agencies can fill the revenue gap from fares with alternative revenue sources, some advocates and transit agency staff argue that the additional subsidy should be used to expand transit service rather than eliminate fares. These advocates believe that transit agencies can better achieve goals of increased access, mobility, and equity through improved service quality rather than through free service. A 2019 TransitCenter survey found that, when given the choice, most bus riders with low incomes would prefer improving the quality of transit service over lowering fares (TransitCenter 2019).
Fares are not the only cost riders pay; they also pay with their time. If the loss of fare revenue resulting from the implementation of fare-free transit were to result in service cuts, riders’ mobility would be more restricted, despite increased financial access. Furthermore, the additional ridership from fare-free transit could put a strain on existing transit services and require a significant short-term investment in additional service, vehicles, and facilities.
On the other hand, some transit agencies and advocates do not view fare-free transit and quality service as mutually exclusive. Multiple transit agencies that have implemented fare-free transit policies and programs have done so at the same time that they have increased service. Implementing both
Fare-Free During the COVID-19 Pandemic
The COVID-19 pandemic has fueled conversations around the benefits and feasibility of fare-free transit. Many transit agencies suspended fares during the pandemic, initially to reduce contact between riders and operators. Some transit agencies extended fare-free transit, even as public health concerns lessened, as a strategy to recover lost ridership and provide financial support to transit riders in the wake of an economic downturn. For many transit agencies, temporary fare-free transit was made possible through additional local and federal funding, such as the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Coronavirus Response and Relief Supplemental Appropriations Act, and the American Rescue Plan Act of 2021 (ARPA) (FTA Office of Communications and Congressional Affairs n.d.). Larger systems with a greater reliance on passenger fares, or high farebox recovery, saw significant budget gaps as ridership plummeted at the start of the pandemic and remained below pre-pandemic levels into 2022. This instability has prompted some transit agencies to re-evaluate the potential of fare-free transit and investigate opportunities for more resilient funding sources, such as community partnerships or tax revenue (Sullivan 2021).
2 A public good is an economic term that refers to a good that is both non-excludable (cannot be limited to paying customers only) and non-rivalrous (one party using the good does not reduce the ability of another to consume it). While transit can be seen as a good that benefits all community members, not just those that use it, transit that charges a fare cannot be a true public good because it excludes some users.
policies at once requires a shift in how transit agencies are funded at all levels—local, state, and federal. If decision makers are willing to provide long-term financial support for quality service that is also free, then riders can benefit from both.
How Can Transit Agencies Evaluate Whether Fare-Free Transit Is Right for Their Community?
This report provides an evaluation framework for transit agencies to use in evaluating whether fare-free transit is feasible or desirable for their community. The framework walks interested parties through 10 steps to set the context, plan the evaluation, and analyze fare-free transit alternatives (Exhibit 1-1). The framework may also be used by community partners, including staff from related organizations, for instance, municipal departments, metropolitan planning organizations (MPOs), or neighboring transit agencies. Step-by-step guidance, including examples of the framework in practice and opportunities for stakeholder and public outreach can be found in Chapter 2 of this report.
What Is an Evaluation Framework?
In this report, an evaluation framework is understood to guide individuals and organizations in developing a systematic process to make decisions about the feasibility of a policy or program. Evaluation frameworks are used by practitioners across a variety of fields to plan new programs, improve existing services, and demonstrate the results of resource investments.
The Centers for Disease Control and Prevention (CDC) developed an evaluation framework for public health programs in 1999 that can be applied to evaluation efforts in other fields, such as transportation. The framework was intended to be practical and nonprescriptive by summarizing and organizing essential elements of program evaluation (Centers for Disease Control and Prevention 1999). Exhibit 1-2 shows the framework’s six steps for program evaluation and four standards for effective evaluation. The framework also identified five important questions to answer prior to starting an evaluation:
- What will be evaluated? (That is, what is the program and in what context does it exist?)
- What aspects of the program will be considered when judging program performance?
- What standards (i.e., type or level of performance) must be reached for the program to be considered successful?
- What evidence (data) will indicate performance on the criteria relative to the standards?
- What conclusions regarding program performance are justified by comparing the available evidence to the selected standards?
Evaluation has also been used in the transit industry to assess existing service performance (Hassan et al. 2013), plan for future service (Hansen et al. 2021), and test new technology (Bartin et al. 2018). Recently, Hansen et al. developed a Performance Measurement and Evaluation Framework of Public Microtransit Service to provide guidance on developing a performance measurement process for microtransit service (2021). The recommended framework uses service standards and goals that are applicable to different types of neighborhoods and distinct from fixed-route and other demand-response service standards. Hansen et al. (2021) designed the framework to be integrated into transit agency service standards to measure the success of microtransit neighborhood zones and to plan future service.