From time to time the topic of free public transport comes up, most recently because of changes in Estonia.
I think it’s a distraction from far more important issues.
I just wanted to address a few points about it. Apologies for the rambling.
Would it be a good idea in Melbourne and/or Victoria?
I don’t think so.
The first point is the cost: the PTV Annual Report indicates around $800 million is collected in fare revenue every year.
Even allowing for the running costs of the ticket system and fare enforcement, hundreds of millions of dollars would have to be found to cover that.
That’s money that wouldn’t be available for upgrades, which are a far higher priority, because the main reason people don’t use public transport isn’t the fares, it’s the service quality.
If the system goes free, assuming that at least some of the shortfall is via higher taxes, you’d have a lot of people paying more for a service they can’t practicably use, which brings me to the next point.
Would free PT get more people on board?
Melbourne’s existing free public transport is an indicator of what would happen if the whole system was free.
The usable, frequent services would be swamped with people. They’d need upgrades to keep up with growth — upgrades which would be far more difficult if revenue isn’t growing with patronage growth. Example: the Free Tram Zone; free New Years Eve trains.
You’d also lose any peak/off-peak pricing mechanism that can moderate peak demand and help encourage off-peak travel. This is used heavily on V/Line (30% discount outside peak, and for all trips that don’t go through Zone 1), and also on Metro (100% discount before 7:15am on weekdays), though arguably this could be used more extensively.
The infrequent, less usable services — such as suburban buses — still wouldn’t get a lot of use. Example: Seniors and Myki Pass-holders on weekends. Some use the buses, but plenty would rather drive, even if they can use public transport for free (or for no extra cost with their weekday ticket).
And that’s a problem if one of the prime aims is to increase public transport usage. Those middle and outer suburban areas where most people travel day to day is where public transport is failing to win market share, thus driving dominates. It would continue to be the case.
If a suburban bus is once an hour (and plenty are), then it’s not suddenly a compelling service if it becomes free. They need more services, not free services.
It costs more to collect fares than the revenue
No, completely wrong.
Myki was an expensive system to build; around $1.5 billion including ten years running costs = $150 million per year.
It’s still expensive. The recently signed operations contract is $700 million for seven years = $100 million per year.
(Sydney’s Opal card system is also expensive, at $1.2 billion for 15 years. That’s a bit cheaper, but these systems can be very expensive when they involve coverage of a large network, requiring lots of hardware — whether or not it’s established technology or being built afresh.)
So yes, ticket systems cost a lot of money. But even if you supposed that on top of the $100-$150 million per year for the ticket system, ticket inspections were costing another $50 million per year (and assuming those staff aren’t needed anyway for other purposes such as safety), that’s still around $600 million per year lost if fares aren’t collected.
Or to put it another way: if Myki hadn’t been built, instead the system could have been fare-free… but only for about two years.
There would be some benefit from going fare-free: better passenger flows in and around stations, as fencing and gates are removed, and on and off trams and buses. But at a huge cost, and these issues can be ameliorated in other ways.
But Estonia has free public transport!
No it doesn’t. If you look beyond the headlines, you’ll discover that recent changes have made regional buses in Estonia free.
Free journeys will be available for all Estonians using county buses, but won’t be available on trains (although enhanced subsidies will make tickets on the state-owned rail network cheaper). And in Estonian cities outside of Tallinn, all passengers will still have to pay to use all modes of public transit, including buses. — Huffington Post
It’s apparently not even all county regional buses:
To date, not all Estonia’s 15 counties have taken up the offer, though the free-fare zone is set to cover large areas of the country. — European Sting
So it excludes rail services, and city (suburban) buses — which would account for the majority of passengers.
Tallinn, the capital of Estonia (population 610,000) does have free buses, trolley-buses, trams, ferries and trains within the city limits, but only for residents.
People still use a smartcard, but the cards issued to local residents give them free rides. Which means the system still incurs the cost of running the ticketing system. In fact Wikipedia notes that services are stopped during ticket checks (though this practice may not still be current) — so it’s really not a fare free system at all.
Problems aside, was Tallinn’s free public transport a success? That depends on how you define success:
…a 2016 analysis of the Tallinn scheme found it didn’t really encourage many people to stop driving.
In 2014, a year into the experiment, the use of public transport had increased by 14%. However, car use only declined by 5%.
In fact, it was walkers who hopped on buses, as the number of trips made on foot dropped by a staggering 40%.
And while the share of car use marginally decreased, the average distance travelled by car actually went up. — European Sting
Wales has free public transport!
No it doesn’t. Wales has free bus services on weekends only… but only for 9 regional bus routes run by one operator, the Welsh government-owned Travel Cymru. It appears to be a measure designed to stimulate tourism.
The scheme excludes rail services, and all other bus services — including bus services within cities.
Hasselt, Belgium has free public transport!
No it doesn’t. They had free buses (not other modes) from 1997 until 2013 when they scrapped the scheme because of cost — in part the costs of running services to cater for higher patronage. The buses are still free for those under 19.
Hasselt isn’t a big city, in any case – it has a population of only about 71,000 people. That means it’s not a good example to point to when arguing for a large city to go fare free.
The (socialist) Mayor of Paris has proposed it, but the idea has been opposed by others.
As far as I can make out, as of 2018, there is no major city in the world (of say more than a million people) where all public transport is free.
But the roads are free
Toll roads are an obvious exception, but even “free” roads aren’t actually free. They are heavily subsidised, but motorists still have to pay fuel tax at the pump, and registration and licencing fees.
Public transport is subsidised too of course. This is no reason to cut out fare collection and make the subsidy even bigger.
Chris Hale recently wrote in The Age that: “a public dollar frittered on fare discounting is invariably a waste, whereas that same dollar invested in better off-peak service gets great results.”
Fares certainly need to be affordable. Part of that is addressed ensuring there are concessions to those who need them.
But in any big city, even those hailed as having great public transport, service and infrastructure improvements are needed.
In fact the best public transport cities tend to get into a growth spiral of patronage – they need ongoing investment. It costs, but it’s good for their city.
All of which means that in any city, with even a moderately successful public transport network, given the huge amount of money raised from fares, it’s very difficult to envisage a time when making the service free would be a priority, or even desirable.
- More reading: PTUA – Myth: Making public transport free will encourage use and political support
- Update 2021: Estonia’s National Audit Office studied the free public transport in Tallinn, and concluded that it did not fulfil the goal of reducing car journeys.
- Update 2023: PTV fare revenue fell during the pandemic, but has now recovered somewhat to $617m for 2022-23