Free Transit
Posted by Fred Jandt
Editor, Mass Transit
Sometimes we get caught in a rut, especially when things work…well, at least work fairly well. The last week has been full of stories of people breaking out of the rut and looking at new ways of doing business.
Apple was the first one to catch my eye. While not necessarily a new business model, their iTunes model is interesting. Basically, they aren’t looking at iTunes to necessarily make money; all they need it to do is break even. The idea here is that iTunes sales will spark interest in and sales of iPods and Macs. It’s hard not to have iTunes on your Mac or PC and not think about investing in an iPod to bring it with you.
Another example came out this week from Electronic Arts (EA). Faced with rampant piracy of its games in South Korea a few years ago, EA decided to give one of its most popular games, FIFA soccer, away free online. Instead of game sales, revenue would be generated from micro-purchases of various in-game upgrades. Not only was it successful, it was so successful that EA is planning on expanding the format to games in the United States and Europe, with even more on the horizon.
Pulling this back to transit, a story came out on Thursday of a study on eliminating fares for New York City transit. The fare revenue would be replaced by increased congestion pricing — double what Mayor Bloomberg had previously proposed. According to the study this is a viable option, the basis being that increasing the cost to drive significantly by offering a free alternative in transit would cause a surge in ridership.
Free transit seems to be the buzz word lately. Portland residents vehemently opposed the idea of charging fares overnight on Tri-Met’s MAX trains in Fareless Square. And the recent funding bill in Illinois includes a provision for free fares for seniors in the Chicago area thanks to a last-minute addendum by the governor.
Would free transit increase ridership? I’m not sure. You hear transit being cheaper than driving listed as one of its benefits. Would taking that to the next level (i.e. free) overcome that last argument by people who love their cars? And what if they did? You might end up with the proverbial be careful what you wish for. Too many riders is a good problem to have, but disgruntled riders because of crammed trains and buses isn’t what any agency wants.
Now how about that micro-purchase format from EA. How about free rides, but you have to pay to access the Wi-Fi on your bus or train? Or perhaps that “quiet car” on the rail line requires a small charge to get access to. There are innumerable things to charge riders for on a transit system. Of course, that’s what people complain about on airlines, having to pay for so many different things — of course they’ve never discussed reducing ticket prices, let alone giving anything away free.
Could transit be free in more areas than it is? Yes, but the riders may also want to be careful what they wish for, because they may just not like what they get in the process.
Thanks for reading the MT Position updated every Friday,
Fred
January 25th, 2008 at 12:42 pm
I helped start two new fare-free transit systems in Montana. Streamline, in the Bozeman area, and Skyline, in the Big Sky area. You can go to http://www.streamlinebus.com or http://www.skylinebus.com to see more info. While some in the general public think it makes no sense to give a “free ride” to someone, they need to realize that their automobile trip is subsidized.
We have proved that people will ride a bus in areas that had no previous public transportation.
January 25th, 2008 at 12:51 pm
There’s a tried and (to a degree) true formula that an inverse 3-to-1 relationship exists between fares and ridership such that a 10% increase in fares may be expected to cause about a 3% decrease in riding. Thus, a 100% decrease in fares might generate a 33% increase in ridership. The impact of high(er) gasoline prices needs to be factored into this, as suggested by SEPTA’s recent fare increase and subsequent ridership growth because of $3.00+ per gallon gas.
More than a decade ago, Capital Metro in Austin, TX tried running a fare-free system for a year. Ridership was somewhat higher, but the transit system also became a de facto provider of after-school latchkey child care and a homeless shelter…maybe a “good” thing for social welfare, but a “bad” thing to the extent it may have driven away choice transit riders. Restoration of fares allowed Cap Metro to resume its legislated function of being primarily a public transportation provider.
In Portland, Fareless Square is limited to the central business district and immediately adjacent parts of the Central City, including the Lloyd District. The “problem” is not so much fareless square itself, as enforcement, of the boundaries iof fareless square and throughout the MAX and streetcar system using proof-of-payment fares (not an honor system; it just seems that way when riders don’t see a fare inspector for months at a time). In short, more enforcement is needed: more frequent fare inspection of passengers’ proofs of payment (passes, validated tickets, transfers), and more visible security. There is no good reason why both functions cannot be carried out by one set of people, security patrollers who double as fare inspectors.
January 25th, 2008 at 3:55 pm
People like to think they are getting something for nothing; sometimes getting them thinking that is sufficient. Is it time to re-instate tokens? Maybe using Dollar coins?
Free rides on transit invites a scofflaw element, but this is not so significant a problem when more legitimate riders fill the cars. Identifying troublemakers is a phase, a methodology of denying boardings, eventually they disappear, or settle down to keep riding privileges.
The theory of loss leader marketing is a useful part of the discussion. Anybody giving free boardings on early morning runs to get people to work, charging after lunch hour, or home direction peak?
This comes back to starvation diet for Public Transit in the USA… And, foot-dragging & obstructionism on the part of some locales that scare off investment. Case in Point: “City” of Novato, demanding EIR on entire 300+ mile Northwestern Pacific, causing delay of rehab of 50-odd miles slated for rehab to serve Santa Rosa & North Bay Communities in CA.
As part of the Post 911DAY scenario, it is time to exempt from taxation, abandoned and identified legacy rail corridor as “Homeland Defense assets”, with priority rehab status. Other interim finance tools might be sponorship tax benefits for corporates, including advertising in stations & rolling stock.
We are inexorably moving closer to some extreme rethinking of public transportation, and rail haul distribution as well, -this due to energy/climate concerns. Stay light on your feet, consultants and transport responsibles. We are at the leading edge of James Howard Kunstler’s “LONG EMERGENCY”.
Oilmen par exellence -Matthew Simmons & T. Boone Pickens allude to “shortages this summer”; read “RATIONING”. This will render these sorts of discussions about loss leader pricing for Transit passe’! Maybe Mr. Jandt will do a list of metropolitan area transit Capacity existing, vs, capacity needed when gas rationing is mandated by Federal Executive Order… Matt Simmons is accessible, interested Transit & MPO executives would do well to get update directly.
January 25th, 2008 at 9:58 pm
A lot of folks who could use transit would rather pay the car dealer, gas station, and insurance company to drive - even if transit were free. Better to add to their burden the cost of parking as a surcharge to office rent and the store bill. Even better to constrain the supply of parking.
January 27th, 2008 at 11:14 am
You state that you are not sure if free transit would increase ridership. As an MTA retiree, I and current employees already have the right to free transit. Yet many choose to drive instead to many destinations. Why not survey these people to estimate how much ridership would increase if it were free for all and also learn where this new ridership would occur?
The larger question is can the existing system handle the increase in ridership considering the times and routes these new riders would use and is there the opportunity to cheaply add additional service? In New York City, I strongly doubt that the existing system could easily handle the additional demand.
January 28th, 2008 at 11:37 am
So what happens if there is overwhelming demand for public transit (for any reason - free transit, etc.)?
The market can provide premium service for passengers who want to pay for it.
I’ve seen crush loads of passengers on buses in Eastern European cities. A bus pulls up to a bus stop - 60 people get off and 80 get on. There are privately-operated buses that charge twice the regular bus fare in exchange for all passengers getting a seat and no standees. These buses stopped to pick up passengers only when there were available seats. Therefore, the buses travelled much faster on route than a regular bus.
January 30th, 2008 at 5:40 pm
In September 2006 Everett Transit changed its modest fare of 75 cents and 35 cents, which included a paper transfer, to a single fare of only 50 cents with no paper transfer. We also allow seniors and persons with disabilities to ride free on fixed route and institued a $1.00 per ride fare on para-transit. We thought the combination of incentive and disincentive for para-transit might slow down our rate of growth on para-transit. Para-transit ridership increased 8.5%, fixed route increased 5.4%. Ridership did go up and the best part of the story is that fare revenue and sales of monthly passes far exceeded expectations.