A Discussion on the Merits of Fare-Free Bus Service, Especially As It Relates to Montgomery County’s Ride On System

Fare-free public transit has recently gained momentum across the globe. As of 2018, there were 97 cities and towns with fully fare-free public transit, mostly in Europe. There are 27 fare-free systems in the United States, “mostly in small towns and colleges.” Reasons for this move include climate, congestion, equity, and economic development.

The ridership question

Climate and congestion benefits hinge on one outcome: free fares leading to increased ridership. A ridership increase would mean fewer people are using private vehicles for their daily trips, thus reducing greenhouse gas emissions from the transportation sector and reducing congestion. The system may also benefit from increased efficiency, as operators no longer have to stop to collect fares. But how significantly does lowering transit prices increase demand?

In the 20th century, several US cities, including Denver and Austin, experimented with free public transit in an effort to reduce car congestion, but were deemed unsuccessful because regional auto travel was “essentially unaffected” — new riders were mostly low-income people without cars. However, they did generate “an immediate and sustained ridership increase” between 20 and 60 percent in the first few months.

Recently, Olympia, Washington went fare-free, and saw a 20 percent increase in ridership over the previous year. Lawrence, Massachusetts’ bus system is fare-free for two years, which led to a 24 percent ridership increase in the first four months. Both cities are under 100,000 people. 

Outside of the US, small cities of Aubagne and Dunkirk, France have experimented with free fares. Aubagne went fare-free on 11 bus routes in 2009, which “appeared to cut car usage by 10 percent three years later, and bus ridership was reportedly up 142 percent in the same time period.” In Dunkirk, ridership increased by 85 percent in 2018, immediately after the free fares initiative was introduced.

Kansas City is the first major US city to implement free fares, starting in December 2019, and it’s expected to cost $8 to 9 million per year, offset by $3 million in savings from not maintaining a fare collection system. But ridership was already low in Kansas City and the bus system competes with a built environment heavily engineered in favor of cars. Right now, it’s too soon to tell the ridership impacts in Kansas City.

On the flip side, ridership increases in highly used transit systems could come with challenges. Jarrett Walker wrote in Human Transit, “Big-city systems are already crowded at least during the peak period and simply wouldn’t have the capacity to handle all the riders that free fares would attract.” Austin, Texas saw an increase in rowdy young riders and homeless riders while free.

In conclusion, ridership seems to increase when fares are free, but the extent of the increase is difficult to estimate. Ridership gains are more likely due to pedestrians shifting to transit, rather than drivers shifting to transit, meaning that congestion and climate benefits aren’t a guarantee.

If free fares aren’t enough to assure a ridership increase, what is? Most riders say that frequency and reliability are their top priorities, according to research from Transit Center. Luxembourg, the first country to go fully fare-free has said, “Free transport alone won’t increase the use of our network, the wider investment across all services is key.”

And how to most effectively get people out of cars? The research indicates that the best way to reduce private vehicle traffic isn’t making transit free — it’s making driving more expensive, by raising gas taxes, parking prices, and introducing congestion pricing.

Economic costs and benefits

Many transit systems are hesitant to go fare-free and give up a source of revenue. However, the “farebox coverage ratio” (the percentage of the operating budget funding that comes from transit fares) depends on the system. There can be a difference between a small bus system — like Worcester, Massachusetts, where farebox collection might be $2 or $3 million, or 15 percent of the budget — and a major bus system, like Boston, Massachusetts, where collection is nearly $100 million, or 23 percent of the budget. 

While making transit free has an economic cost, there are also economic benefits. A study from the University of Missouri-Kansas City found that “free transit would increase Kansas City’s regional gross domestic product by more than $13 million a year.” Economic benefits can come from both increased access to jobs and local spending on other goods and services.

Free fares may be especially helpful in a recession when fewer people are able to afford a private vehicle. This is why Tallinn, Estonia introduced free fares in 2012 after the Great Recession. However, only a 1.2 percent overall increase in ridership could be attributed to free fares. On the other hand, low-income neighborhoods saw a 10 percent increase in ridership.

For budget purposes, many cities choose to make fares free or reduced for low-income residents and/or to generally reduce the cost of transit, rather than eliminate fares completely. For example, the city of Vienna reduced the cost of its transit passes at the same time it introduced tougher parking regulations, and saw a ridership increase.

Furthering transit equity

This brings us to the most significant and likely benefit from free transit: equity. Across the country, bus riders are much more likely to be low-income and non-white due to centuries of discrimination, disinvestment, and instutitional racism. Therefore, any general decrease in fares overwhelmingly puts money in the pockets of those who are more likely to be spending every extra dollar towards paying bills, buying groceries, and meeting other basic needs. 

Fare-free transit also ensures that everyone, regardless of income, can access public spaces, job centers, and other amenities. Better access to jobs can contribute to socioeconomic mobility. Commute times are the “single strongest factor in the odds of escaping poverty,” meaning that it’s not enough to just make transit free — service must also be frequent, fast, and reliable.

Due to the consistent demographics of bus riders, instituting means testing by targeting free or reduced fares creates an administrative burden and can place a burden on riders to seek out specialized programs. These costs could potentially outweigh the benefit of continuing to collect fares from moderate and high income riders.

One important equity consideration is the source of transit funding, if not from fares. Advocates argue that fare-free transit doesn’t necessarily have an equity benefit if fares are replaced with a regressive tax, such as a sales tax.

Part 2: Background on Ride On

Ride On is Montgomery County, Maryland’s local bus provider, and is the largest suburban bus system in the United States by ridership, with 21.5 million unlinked passenger trips in 2018. It has an average daily ridership in 85,000 and 80 routes. Ride On’s annual ridership has been decreasing since 2013, which is in line with national bus ridership trends. In FY20, budgeted fare revenue was $20 million, less than 10 percent of total revenue of Montgomery’s Mass Transit Fund. Most funding comes from the Mass Transit property tax and state aid.

Source: National Transit Database Agency Profiles, 2013-2018

Montgomery County has relatively high transit usage: nearly 16 percent of county residents commute using public transit and about nine percent carpool. There has been no recent demographic analysis of Ride On users, but it can be assumed that characteristics are similar to Metrobus riders in the region, of which Montgomery County residents make up 23 percent, the second highest percentage after the District of Columbia. Metrobus customers are 52 percent low-income, 55 percent do not own a car, 24 percent have limited English proficiency, and 81 percent are non-white.

Source: Bus Transformation Project, Bus System Today, January 2019

In 2019, the Montgomery County Council created the Kids Ride Free program, which extends to anyone aged 18 or under. The Kids Ride Free program saw a 57% increase in students using the county’s Ride On buses in the first six months. The program also extended to certain Metrobus routes, leading to a 51% increase in students on Metrobuses. 

Other existing programs include: 1) free or reduced fares for seniors and persons with disabilities, depending on the time of day, 2) free fares for current Montgomery College students, and 3) the free Route 28 VanGo Circulator in downtown Silver Spring.

Ridership gains have also come from increased express service. Limited-stop Ride On ExtRa Route 101 from Bethesda to Gaithersburg saw a 12 percent ridership increase along the route between 2018 and 2019. An analysis of Ride On’s weekday service shows that there’s a moderate correlation between short average AM/PM headways and riders per platform hour, with a correlation coefficient of -0.63. 

Source: Montgomery County Council, FY20 Ride On Route Profile

Part 3: Should Ride On stay fare-free?

Yes, there’s a strong case to be made that Ride On would benefit from free fares. Ride On is a good candidate due to its moderate budget and ridership — potentially hitting a sweet spot in between 1) systems that are too big to publicly cover farebox costs and too heavily used to handle a sharp increase in demand and 2) systems that are small enough to cover farebox costs but lack the service quality needed to attract many new riders.

Due to those factors and its rider demographics, if Ride On were free, ridership would likely improve and people of color and low-wage workers would most directly benefit. However, as evidence indicates, both free fares and service improvements together would result in the most ridership, climate, congestion, equity, and economic development gains.

This is why we’re launching a “Free & Frequent” Ride On campaign. Here are our demands:

1. Keep Ride On free throughout the public health emergency.
   1. Next budget cycle: Extend free fares for Ride On in perpetuity.
2. Redesign Ride On and Metrobus service in Montgomery County with a focus on frequency and reliability, in a budget and job neutral way, with a service improvement plan.

These demands are especially important given the current public health emergency and recession. Transit has continued to prove that it is an essential public service, ensuring that our front-line workers are able to get to work and that those without private vehicles are still able to get food, prescriptions, and other necessary goods.

As we begin to “reopen” the county’s transportation network, we have the opportunity to do so in a way that increases our climate resiliency, furthers racial and socioeconomic justice, and aids our economic recovery. These goals cannot be achieved without transit. We don’t have to go back to the same congestion, dangerous roadways, and air pollution. Free and frequent Ride On will help to rebuild trust in public transit by making transit attractive, easy, and safe.