David Zipper is a Resident Fellow at the German Marshall Fund and a Partner in the 1776 Venture Fund, where he oversees investments in smart cities and mobility ventures. Following his tenure as director of NYC Business Solutions in Mayor Michael Bloomberg's administration in New York City he served as director of Business Development and Strategy for two mayors in Washington, D.C.
It may sound strange, but the esoteric topic of fare collection has become one of the most polarizing in public transportation. And it’s likely to get worse—unless we start rethinking the idea of transit fares entirely.
The controversy has focused on penalties for those who do not pay for their transit trip, thereby committing “fare evasion.” Punishment can be stiff: in the District of Columbia fare evaders on the local transit system, Metro, could get a $300 fine and 10 days in jail. That’s hard to square that with a comparably light $30 fine for an expired parking meter in the District of Columbia—especially since transit riders are more likely to be minorities or have incomes below $15,000 than the general population. According to the Washington Lawyers’ Committee for Civil Rights and Urban Affairs, 91 percent of summons for fare evasion in the District between January 2016 and February 2018 were issued to African-Americans.
A natural solution would be to remove the risk of jail time and slash the fine for fare evasion, something that the District of Columbia’s City Council voted to do in November by an 11 to two margin despite Metro’s warning that the bill would “have significant safety and financial consequences for the region.” The agency claimed to lose $25 million annually from fare evasion, and that it would be “unfair” to let fare evaders get away with bad behavior.
Mayor Muriel Bowser vetoed the bill on January 16th, prompting the ACLU to declare itself “appalled” by the mayor’s decision. On January 22nd City Council voted 10 to two to override the mayor’s veto, much to Metro’s frustration.
You might think that replacing turnstiles with an honor system for fare collection would resolve these civil rights tensions, but that’s not the case. Issues of discrimination are at least as problematic for transit agencies adopting so-called “proof of payment” (POP) systems, where passengers purchase a ticket before boarding a bus or train and must show it if approached by a spot-checking transit employee. POP systems have grown in popularity because they can speed up the boarding process, making transit service faster and more reliable. In San Francisco POP’s adoption reduced bus and streetcar per-stop “dwell times” by 13 percent.
But POP systems also draw accusations of racial bias in enforcement by the spot-checking transit employees. Transit agencies in Cleveland and Portland have both been sued on racial discriminatory grounds, with judges suggesting POP enforcement policies could be unconstitutional.
Transit officials are caught in a dilemma: they risk discrimination in the policing of fare evaders, but they will be accused of penalizing law-abiding riders if they let fare evaders get away with it.
For an outside-the-box pathway out of this conundrum, consider the tiny Chapel Hill Transit agency in North Carolina, which will never risk discrimination in fare-evasion enforcement. Why? Because it makes transit completely free to all riders in order to encourage transit-oriented living.
The idea of free public transportation isn’t as crazy as it may sound. Prompted by concerns over congestion and pollution, the European countries of Estonia and Luxembourg already offer it, and Germany is considering it. Removing fares clearly makes transit more desirable; when Talinn, Estonia’s capital, adopted free public transportation in 2013, ridership immediately spiked 10 percent. Such ridership gains would certainly be welcome in the United States, where 31 of the 35 largest transit agencies saw passenger counts dip in 2017. Unlike most goods, transit gets better with heavier usage because more frequent bus and train service will reduce wait times.
Making transit free would require money—but perhaps not as much as you’d think. American transit agencies overall get barely more than a third of their operating revenue from fares, and for smaller agencies like Cleveland’s that ratio is often around a fifth. Agencies providing free rides would reduce costs by jettisoning expensive fare collection technology and reallocating staff dedicated to payment enforcement, though that’s unlikely to fully compensate for lost revenue.
The most intuitive way to cover the gap would be to replace the current user fees funding transportation (such as the gas tax as well as transit fares) with so-called “demand management” that adjusts pricing for each mobility mode to reflect the societal costs it imposes. Privately owned vehicles disproportionately create congestion, pollution, and traffic injuries, especially if driven at peak times. Applying demand management pricing would raise funds from vehicle owners through higher taxes and fees—especially through decongestion pricing—which could be directed to transit. But raising new revenues is never easy; car owners won’t be thrilled at shouldering the cost for a mode they themselves may not use (although they will benefit from less congested roads as transit ridership grows).
Civil rights tensions over fare collection alone probably aren’t enough to spur a costless public transportation movement, but they could be a catalyst. Other policy arguments could lead in the same direction, including growing concerns of a transit death spiral in which declining ridership and worsening service reinforce one another. Removing fares could trigger ridership gains that reverse that trend, creating a virtuous cycle where better service attracts more riders, which in turn makes service even better.
Ending transit fare collection could bring other benefits as well. Inflexible transit payment systems make it difficult to connect with new mobility services like ride hail and scootershare; eliminating transit fares would remove a major impediment to integrated movement across modes. And it’s also worth keeping an eye on the nascent movement for universal basic mobility (UBM), which grants every citizen a right to travel to a job, school, or wherever else they need to go. Given the concentration of low-income residents on public transportation, providing costless rides would be a major step toward UBM.
In recent years no North American transit agency has followed the lead of Chapel Hill, Estonia, and Luxembourg to adopt free public transit, so don’t throw away your transit card just yet. But intriguing signs have begun to emerge: Milwaukee has provided free bus service for senior citizens and those with disabilities, and Vancouver is exploring free transit for youths. Transit agencies in places such as New York, Portland, and the Twin Cities offer substantial discounts to low-income passengers. At the very least transit agencies are loosening the user fee approach toward fare collection.
With the D.C. Council’s override of the mayor’s veto, the question of how to punish fare evasion is settled in the nation’s capital. But civil rights challenges to fare collection aren’t going to disappear anytime soon; discrimination lawsuits against transit agencies in Portland and Cleveland are still working their way through the courts. If these tensions continue to fester—and if transit ridership nationwide continues to fall—don’t be surprised to see transit agencies starting to question whether collecting fares is actually worth it.