Considering Fare-Free Transit in the Context of Research on Transit Service and Pricing: A Research Synthesis

Research Team: Brian D. Taylor (lead) and Jacob Wasserman

UC Campus(es): UCLA

Problem Statement: Public transit systems allow urban areas to thrive, and they provide mobility for those unable (financially, physically, etc.) to drive. Given the critical social service role played by public transit, whether and how much to charge passengers can be a thorny philosophical, economic, and practical question. Equitable fare policy entails decisions about the similarities and differences in treatment afforded to various groups. It also involves decisions about the extent to which travelers are expected to pay for the costs of the service they receive. This is of particular concern with regard to low-income, largely non-White, travelers, who are both disproportionately likely to use transit and to be burdened by the monetary costs of transit use. As such, there is growing public and scholarly interest in making public transit systems “fare-free.” Eliminating or reducing fares lowers the immediate monetary costs of transit use for low-income travelers and may reduce the costs of enforcing fare payment as well the controversial role of policing on transit systems used disproportionately by people of color. On the other hand, those advantages must be balanced against the loss of revenue that might otherwise be used to improve or increase service.

Project Description: This project examined both the substantial research literature on transit pricing and use and literature on free- and reduced fare (FAR) programs. In general, the researchers found that FAR programs can take many forms, and the idea of “fare-free” transit is far from a one-size-fits-all proposition. Second, while reducing or eliminating fares does indeed increase ridership, all else equal, transit research has consistently found that riders tend to be more service elastic than fare elastic. In other words, they tend to respond more to service improvements than price reductions, which means that, at the margin, money “spent” on fare-free programs (in the form of foregone revenues) may attract fewer riders than if that money were put toward improving service. And third, the social equity dimensions of fare-free transit are many, ranging from considering the share of fare-free benefits that flow to higher-income riders to the potential racial equity benefits of reduced fare enforcement policing on transit.

Status: Completed

Budget: $10,000

Policy Brief(s):