Free Fares and Washington DC - Redux

Free fares having more or less the impact you might expect.

A couple months ago, I wrote an article about Washington, DC’s plans to implement free bus fares, and it seems that things are moving ahead with that plan, albeit in a very unfortunate way.

Now, to be clear I am not super up to date or in the loop with the bus plans being discussed, but I also don’t think they pass the smell test — which I’ll try to explain why, yet again, in this article!

On board a bus in DC. (Credit: Erel)

Last night, while trying to take a peaceful stroll along a rail line, I noticed a series of Tweets (1,2) from a local reporter on plans regarding the free-fare scheme. The long and short of it is that a capital project — in this case, a busway — is being scrapped in favour of a new plan that includes free fares. This is really bad, but not really all that surprising a turn of events.

To be clear, some locals seem to be suggesting that this news isn’t so bad because the proposed busway plan had gotten a lot worse, and because this new plan also includes service improvements, but I really don’t think that makes this better.

Here are the two main issues I have:

Capital to Operating Transfers are Really Bad

The first problem with these plans really doesn’t have a lot to do with free fares — it’s the use of what I would imagine is capital funding for operations.

In transit, funding streams are typically divided broadly into operating and capital funds: Operating funds are used to run the system and ideally keep things in good order, whereas capital funds are used to build new stuff and do major upgrades.

In many jurisdictions, particularly in North America, there is a tendency to throw lots of capital money at transit systems and little operating funding — that’s probably because:

1. Capital funding leads to things that you can cut ribbons for

2. Capital funding doesn’t lead to a long term consistent commitment, it’s easy to do when you find some extra funds - consistent operating funds are seen as, and to some extent “grow the state”

Transit construction in Toronto.

So capital money tends to be more plentiful but also less consistent — typically in a “one off” format. And this is why it should not be used for day to day expenses, because you want long-term consistency when planning things like staffing and operations.

One of the biggest disincentives to use transit are frequent cuts to service, required by poor staffing or insufficient funding that give a sense of “impermanence”. Using capital funding for operations can create a brief sugar-high, where service can be good and budgets can be looser, but this inevitably wears off when funds dry up. This is basic stuff, so if DC is really using any funds earmarked for capital projects (which it appears to be) for operations — that’s really bad on a basic level. Of course, this is even worse because if the service improvements lead to increased ridership ,a drop in service will throw those wins away.

And unfortunately, this move is even worse than it initially seems. Smart transit agencies — at least the ones operating in austere operating funds environments (which is most agencies) — use capital dollars to reduce operating costs, through things like maintenance and labor saving technologies, such as the electrification of vehicles. As it turns out, busways and lanes are essentially another way of “converting” capital funds into operating funds, since dedicated lanes speed up vehicles — they allow you to deliver more service at the same price, or for the austerity minded the same service for less.

A dedicated busway in Mississauga, Canada

By using capital funds for operations — especially free fares, which, as I am about to talk about, probably won’t lead to many more people using transit — is a waste of money that could have been used to provide more service (albeit less than using capital dollars as a short term funding injection), more consistently — in the long run.

More Service doesn’t make Free Fares Good

The idea that a transit plan is good because includes free fares and more service is in my eyes, illogical. The idea here is that this is a compromise between the reasonable desires of free fare advocates and advocates of more service — but obviously, from the jump, the issue is clear.

From the beginning of mainstream discussion about free fares, the most common response I hear from free fare advocates to criticisms that riders want more service (as evidenced by lots of academic literature, and by many “practical experiments” — Hong Kong, Stockholm, Paris, and any number of other great transit cities do not do universally free fares) is that we should just have both

But this plan shows the issue with that idea. In the real world, funding is not infinite — it’s good to marginally expand transit service, but all those funds used to make transit free for people who could and would happily pay for good service could and should just be used to pay for better service.

Fare gates in the Montreal Metro

Another thing that often comes up from advocates is the idea that because fare box recovery (the amount of transit funded through fares) in many cities across the United States is low, including in Washington DC, that there isn’t much to lose by going to a no fare system, but this is just cynical. Low fare box recovery indicates that a system is poorly used or inefficiently operated. If your fare box recovery is in the single digits, then you should not be asking how to get rid of fares, but where you lost the plot. There’s clearly systems like the TTC that are overly reliant on fare box revenue for their funding (making them susceptible to ridership drops), but this is just the complete opposite problem and it makes systems like DC’s buses very vulnerable to funding challenges — even when demand for transit is high!

While it’s sometimes suggested that an aim for reasonable fare box recovery will lead to exceptionally high fares, that’s probably unlikely given the wide range of non-transit transport options that exist in a place like DC. If you price transit unreasonably high, then people just won’t take it! Of course, low-income folks and other need to be considered carefully, but, most major cities already offer free or discounted fares for people who are low income, and clearly the best outcome for low-income folks dependent on transit is also just better service! As the quote goes that “a developed country is one where the rich use transit”, you want all strata of society using transit — but, most people in that situation can and should pay.

The temptation driving a lot of the free fare policies — including in cities like Boston and Washington who clearly can and should be spending these funds on fixing their existing systems and service — appears to be that you can pretty easily implement free fares (which sound good), but good policy and good transit is higher risk and harder. I discuss this more in my previous article, but this is the type of advocacy and policymaking we should be discouraging: It’s short term-ism!

Ultimately, looking at the situation, all of this should be pretty obvious: Almost the entire developed world has better transit than the US, and also does not have universal free fares. It feels… wrong for American cities to pretend they have discovered something the rest of the world simply does not know, and in reality I fear these policies will continue to be implemented, edging out real improvements while gaining lots of attention.