Fare-Free Transit Evaluation Framework (2023)

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CHAPTER 5 Opportunities for Future Research This final chapter proposes opportunities for future research to support transit practitioners’ ability to evaluate fare-free transit. This report provides practical guidance for transit agencies to evaluate the feasibility of fare-free transit in their community. This framework was informed by a transit agency survey and interviews with staff from transit agencies, community organizations, and transit advocacy groups. During this information gathering, the research team identified three areas where additional guidance would be helpful: impacts of fare-free transit, funding for fare-free transit, and fare collection cost and revenue reporting. Impacts of Fare-Free Transit • Comparative impacts of discounted and fare-free transit programs. This evaluation frame- work focused on evaluating the comparative impacts of full and partial fare-free transit alter- natives. However, many transit agencies that are considering or evaluating fare-free transit are also looking at discounted fare alternatives, such as fare programs for people with low incomes. These discounted programs can provide affordability to those who need it most without as many operational and financial costs as fare-free transit. As more transit agencies evaluate the feasibil- ity of such alternatives and measure the impacts of policies and programs after implementation, further research could be completed to compare these impacts across a wider range of strategies. • Measuring the assumed impacts of fare-free transit. As discussed in Chapter 3, there are both measured and assumed impacts of fare-free transit. Assumed impacts include costs and benefits that cannot easily be measured, but that reasonable logic and sometimes qualitative information suggest are occurring. Fare-free transit can have access, mobility, equity, economic, sustainability, and congestion impacts. Limited studies have shown that some of these fare-free transit impacts are positive for riders and the community, such as the University of Missouri’s assessment of the economic impacts of fare-free transit (RideKC 2020). Additionally, some positive impacts of fare-free transit have been measured internationally, but positive impacts have not been directly linked to fare-free transit in the United States. It would be useful to have additional research into whether fare-free transit has positive impacts on riders, and if so, how and to what degree. Funding for Fare-Free Transit • The future of equitable transit funding. Coming out of the COVID-19 pandemic, the future of transit ridership and farebox recovery is still relatively unknown. Even before the pan- demic, ridership and farebox recovery had been trending downwards at many transit agen- cies. Given the unclear future, transit agencies must rethink how they fund their services. This reevaluation could open up opportunities for exploring alternative funding strategies that are 81   

82 Fare-Free Transit Evaluation Framework more equitable, such as income taxes. This strategy moves away from traditional transporta- tion funding sources that tend to be regressive, such as fares, sales taxes, and gas taxes. • Federal and state funding for fare-free transit. As discussed in Chapter 3 of this report, replacing the foregone farebox revenue from fare-free transit is one of the largest barriers to implementing fare-free transit, particularly for large transit systems. Transit agencies have used a wide variety of replacements for farebox revenue, including a corporate gross receipts tax, sales tax, municipal general funds, advertising, private partnerships, a dedicated transit tax or fee, or a combination of methods. Further research may include identifying opportunities for federal and state funding solutions for farebox replacement if fare-free transit impacts align with decision-maker goals and priorities. These solutions may include revisiting existing transit funding formulas, including an evaluation of necessary changes to federal law, to provide greater flexibility for transit agencies to spend on operating costs. Additionally, grant programs such as Virginia’s TRIP provide transit agencies with the opportunity to access short-term funding to pilot fare-free transit while staff can explore alternative funding models for longer-term programs. • Revisiting community and institutional partnerships. A barrier to transit agencies imple- menting full fare-free transit is the potential loss of farebox recovery from existing funding part- nerships, such as university and employer pass programs. These relationships are often formed around payments or contributions to cover fares for certain riders. If a transit agency eliminates fare collection, it may risk losing this substantial revenue source. Further research could explore how transit agencies can transition these fare partnerships into an agreement to pay the transit agency for providing services to the groups that they represent. Fare Collection Cost and Revenue Reporting • Cost of farebox collection relative to farebox revenue. TCRP Report 94: Fare Policies, Struc- tures and Technologies: Update (Multisystems, Inc. et al. 2003) provides estimations for capital and operating costs of fare collection systems at transit agencies of various sizes and in various contexts. This report, however, does not provide an estimation or guidance for how much transit agencies should spend on fare collection costs as a percentage of their farebox revenue. This guidance would be helpful for transit agencies to gauge whether the farebox collection system is appropriate for the size of the ridership and fare structure. Additionally, as transit agencies evaluate the costs of fare-free transit, it would be helpful to have a better understanding of whether the fare collection costs per revenue dollar are in line with the industry. For example, transit agencies with significantly higher fare collection costs per revenue dollar may be good candidates for full fare-free transit to lower their operating costs, improve operating efficiency, and simplify the rider experience. • Standardizing NTD fare revenue data reporting. Some transit agencies include alternative sources of farebox revenue in the data that they report to NTD, such as municipal, univer- sity, and local school district contributions. The inclusion of these data can make it difficult for researchers and transit practitioners to compare farebox recovery across transit agencies and may paint an unrealistic picture of farebox recovery in the United States. Further research can be completed into how farebox recovery is reported to the NTD across the country and if clearer guidance can help standardize how farebox recovery is reported across transit agencies.