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Chapel Hill has been a fare-free system since 2002 and is still going strong.

Earlier this year the Estonian capital of Tallinn became the largest city in the world — with a population exceeded 400,000 — to make its transit system free. Tallinn marks the latest in a growing trend toward fare-free transit on the Continent. The city is joining others to form the Free Public Transport European Network in an effort to spread the idea even farther.

It seems unlikely that American cities will take a cue from Tallinn, but those considering a fare-free system have a ready example in the United States: Chapel Hill. Since going fare-free back in 2002, Chapel Hill Transit has seen ridership increase from around 3 million passengers a year to just about 7 million. The system is now the second-largest in North Carolina and helped Chapel Hill win a City Livability Award back in 2009.

"It's not uncommon for us to get calls or emails from folks saying, How did you go fare-free?, and Can we make this work in our community?" says Brian Litchfield, interim director of Chapel Hill Transit. "I'm always careful to say this is a community decision. It's not something the agency or transit system can make necessarily by itself."

The agency considered shifting to a fare-free system back in 2001 after recognizing that its farebox recovery rate was quite low — in the neighborhood of 10 percent. Most of its revenue was already coming from the University of North Carolina, in Chapel Hill, in the form of pre-paid passes and fares for employees and students. To go fare-free, the agency just needed a commitment from a few partners to make up that farebox difference. The university agreed to contribute a bit more, as did the taxpayers of Chapel Hill and Carrboro, and the idea became a reality.

Today, says Litchfield, the agency's budget is around $19.5 million. According to a recent funding breakdown [PDF], U.N.C. puts up about 38 percent of that total, followed by 18 percent from Chapel Hill itself, with another 7 percent from Carrboro. State and federal assistance combines for 28 percent, with the remainder coming from small charges and fund transfers. The budget grows about 8 percent a year in wages, benefits, and fuel costs, says Litchfield, and the partners must find ways to increase their share by that much — and even more if they want service expansion.

"We look at it as a pre-paid fare program," he says. "The university is paying for all their employees and students to ride. The town of Chapel Hill and Carrboro are pre-paying their fares via property tax and vehicle registration fee. So while there's not a fare to get on the bus, it's definitely not a free system."

The original decision to go fare-free was part of a larger push by the community toward a transit-oriented lifestyle. In addition to eliminating bus fares, Chapel Hill Transit decided to expand service by about 20 percent. Meanwhile the university reduced parking on campus, Chapel Hill adjusted parking requirements in the downtown area, and the entire community made a push for denser development in the transit corridors. The ridership growth since 2002 can be seen as the result of all these efforts combined, says Litchfield.

"All of those kinds of went together," he says. "It wasn't just a decision — if we take fares away a bunch of people are going to ride."

Some of the benefits are obvious. Road congestion would be much worse, with many if not most of the 35,000 weekday trips provided by Chapel Hill Transit traveled instead by single-occupancy vehicle. Space devoted to parking has been reduced, as (presumably) have carbon emissions.

When speaking to detractors of the fare-free system, Litchfield likes to point out the measurable savings as well. The transit agency saves money that would be spent on fare collection, in terms of both staff and equipment (the system has 99 buses, and farebox devices sell in the area of $15,000 each). Advertising costs are down, since Chapel Hill Transit doesn't have to promote its pass programs, and the system also saves money that would have gone toward low-income ridership assistance. Last but not least, the buses save time because they no longer have to check passes or wait for fare swipes.

"When you tell folks that they go, Oh, ok," he says. "It makes a little bit more sense."

That's not to say going fare-free is necessarily the right move for all cities. Litchfield emphasizes four points to communities that approach him for advice. The first is obviously finding a committed funding partner. The second is that service quality must be maintained; if you take away fares but can only send a bus on a route every hour, that does no good.

The third challenge is funding para-transit service. Systems that provide fixed-route bus service must also provide para-transit service, but instead of being able to charge twice the normal fare, the fare-free financing structure must now cover these programs too. Last, you have to account for policing the system, with an emphasis on removing joy-riders.

"There's a very real cost for providing the service," Litchfield says. "But again, the benefits for that outweigh the cost of that in our minds and in the minds of our partners."

Image courtesy of Wikimedia Commons

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