A big issue for Utah Transit Authority (UTA) and other transit agencies across the country is how much to charge for fares. It’s especially important coming out of a pandemic when public transit essentially shut down and ridership has been slow to recover.
The sweet spot with fares is to keep them low enough so the cost doesn’t discourage ridership, but high enough to provide needed revenue to help maintain and operate the system.
A big question is whether an extremely low fare, or no fare at all, would encourage so much ridership that it would be worth additional taxpayer dollar investment from federal, state or local governments to make up for the lost fare revenue.
A recent article in Route Fifty, an on-line publication for state and local governments, notes that some agencies across the country are considering making public transit free for all. The new mayor of Boston, for example, campaigned on making transit free in the city and is now working to eliminate fares.
“The transit industry is divided on the (free fare) question,” notes the article. “Many agency heads see benefits to the economy and the environment and also opportunities to start addressing racial inequalities built into the nation’s transportation system. Others are more leery, raising concerns about the financial hit agencies could take if they lose fare revenue. Meanwhile, some systems are taking a middle ground, rolling out free or reduced prices for low-income riders, without eliminating fares entirely.”
UTA already has numerous programs with large businesses, government entities, universities and non-profits to provide free public transit for employees, patrons and students. It also has agreements to provide free rides to some events and other ticketed destinations. An airline ticket might provide free fare to the airport.
But with low ridership on some modes and routes during the pandemic, additional incentive might be necessary to bring ridership levels up to help relieve freeway congestion and reduce automobile air pollution. No one knows for sure if free transit would dramatically boost ridership.
What is clear is that UTA would need to make up the lost fare revenue to continue operations and pay debt. It can’t afford a significant revenue loss. But this might be a good time for some experimentation with a no-fare program because the agency is receiving significant federal funding from pandemic relief legislation and may receive even more.
It’s important to acknowledge that free public transit isn’t really free. Taxpayers are paying the costs. Of course, highways aren’t free, either. Taxpayers pay for the cost of building and maintaining roads through fuel taxes and other general fund taxes.
Boston Mayor Michelle Wu is planning to use $8 million in federal funding to eliminate fares on three popular bus routes for two years. City leaders hope the experiment will provide data showing fare-free public transit makes sense.
The Utah Legislature has indicated it is committed to public transit as Utah’s population grows rapidly and highways become more congested. If free transit boosted ridership to a level that was obviously improving overall mobility and taking pressure off the highways, the Legislature might be inclined to invest enough in public transit to make up for the lost fare revenue.
A big question is, can free public transit attract enough riders to reduce the need to build or expand some highways? If so, the no-fare investment may be worth it. But some experimentation, analysis, and learning from agencies in other states will be needed.