A Review of Reduced and Free Transit Fare Programs in California

Research Team: Jean-Daniel Saphores (lead), Deep Shah, and Farzana Khatun

UC Campus(es): UC Irvine

Problem Statement: Free or reduced-fare transit passes have the potential to increase transit ridership, enhance the mobility of disadvantaged groups, make it easier for children to go to school and participate in after-school activities, and reduce the environmental footprint of transportation. Under the right conditions, these programs can also reduce traffic congestion and motor vehicle use. Transit agencies all over the world have been experimenting with offering free or reduced-fare transit for decades, yet there are still substantial concerns about the ability of such programs to boost ridership, and especially their cost and impact on the fiscal health of transit agencies. Some of these concerns linger partly because the number of rigorous academic studies on free and reduced-fare transit passes is still quite small.

Project Description: Researchers at UC Irvine surveyed California transit agencies with a focus on members of the California Transit Association (CTA) during November and December 2019. Fifty-nine agencies, representing a broad cross-section of California transit operators, responded. Three quarters of respondents offered one or more free or reduced-fare transit pass programs in fiscal year 2018-19. While most respondents stated that free or reduced-fare transit passes increase ridership, many had concerns about the effect on their agency’s farebox recovery ratio, and to some extent on the fiscal health of their agency, though almost half of the respondents did not know the actual impacts. Those agencies offering student pass programs funded by student fees or employee programs funded by employers did not report any negative impact on ridership or on farebox recovery ratios. This confirms that free or reduced-fare transit pass programs structured like insurance programs (where a large group of potential transit riders—such as all students at a college or all employees in a large firm—periodically pays a lump sum to a transit agency while only a subset of that group actually uses transit) can be good for both riders and transit agencies. Free or reduced fare pass programs have an important role to play in transportation policy in California, but we should not ask too much from these programs. To achieve their full potential, they should be integrated into comprehensive policies to achieve California’s social and environmental goals.

Status: Completed

Budget: $62,818

Policy Brief(s):