Zero-fare public transit movement gains momentum

Washington, D.C., is on the verge of eliminating bus fares for city residents, joining other U.S. cities that are working to make metro bus and rail systems free to ride.

Already, Boston, San Francisco and Denver are experimenting with zero fare. In late 2019, Kansas City, Missouri, became the first major U.S. city to approve a fare-free public transit system.

The “zero-fare” movement has garnered support among business groups, environmental advocates, Democratic leaders and others who say that public transit boosts local economies, mitigates climate change and is a basic necessity for many individuals. The idea gained traction during the pandemic, which underscored the critical role public transit plays for essential workers who don’t have the luxury of working from home.

But despite the zero-fare movement’s growing popularity, it has drawn political pushback in some areas where the policy doesn’t easily fit in with budgets or local laws.

D.C.’s zero-fare bill was proposed in early 2020 about two weeks before the Covid-19 pandemic triggered a downward budget spiral for transit agencies nationwide.

“I don’t charge you when you need the fire department, but yet we’re going to make sure there’s a fire department when you need it. That’s how you need to think about this,” Charles Allen, one of the D.C. city councilmembers who introduced the bill, said in an interview with CNBC.

The D.C. measure aims to get rid of the $2 fare to ride the bus starting in July. The city council unanimously approved the measure, and it’s awaiting a formal response from Mayor Muriel Bowser, who can either approve, veto or return the bill unsigned.

Bowser initially expressed reservations about financing a zero-fare system that would also serve Maryland and Virginia without receiving funding from those states. The mayor’s office did not respond to a request for comment. In any case, the council’s unanimous support is enough to override a mayoral veto.

The bill would allocate $43 million a year to make the D.C. Metrobus free to all riders and to add a dozen 24-hour bus service lines. The money will come from surplus tax revenue. The D.C. Council is still considering whether to add a $10 million subsidy program, which would provide every city resident with $100 of credit monthly to spend on the D.C. Metrorail.  

In many cities, the coronavirus sent ridership on subways and buses to historic lows, largely because white-collar workers were working from home instead of commuting into the office. That left essential workers, who are typically middle to low income, as the primary riders of public transit.

As fare revenue plummeted and transit agencies watched their budgets erode, state and local government subsidies along with federal Covid relief funding became necessary to preserve transportation for essential workers.

Zero-fare transit has since also become a cause among environmental groups that want to get cars off the road, labor unions that want to keep transit drivers socially distanced from riders and business groups that want to draw more customers.

Alexandria and Richmond in Virginia have successfully integrated fare-free transit into their annual budgets. Boston, Denver and others have tested pilot programs. Boston’s zero-fare experiment will stick around until 2024 for three of the city’s bus routes.

Meanwhile, Denver introduced temporary fare-free holidays like “Zero Fare for Better Air” in August and “Zero Fare to Vote” on voting days in November.

In Kansas City, zero-fare transit has become a hallmark of life.

“It feels like much more of a community space and I think that’s because it’s something you can freely enter and exit,” said Matt Staub, a founding member of Kansas City’s fare-free streetcar and a marketing business owner, who used to spend between $60 to $70 on monthly bus passes.

Kansas City first experimented with zero-fare transit in 2016 with the launch of its streetcar, a two-mile fixed rail line in the city’s downtown where riders can hop on and off, free of charge. The city is investing $400 million to expand the streetcar route to more than six miles by 2025.

Since the streetcar began construction in 2014, $4 billion has been invested into downtown development, including hotels and restaurants. Downtown’s residential population has grown from roughly 21,000 in 2014 to about 32,000 in 2022.

“The streetcar, at least from our perspective, is more than a mode of transportation. It’s more than just getting from point A to point B. It’s an economic driver,” said Donna Mandelbaum, a spokesperson for Kansas City’s Streetcar Authority.

The zero-fare bus started in December 2019 as a pilot program. Then after Covid hit, the city’s bus authority kept it in place permanently as a safety measure, since it reduced physical interactions between bus drivers and riders.

Making a U.S. city zero fare takes a combination of funding and political support.

Kansas City had both. Fares made up only 12%, or about $8 million, of the buses’ operating budget, according to Richard Jarrold, vice president of the Kansas City Area Transportation Authority. Meanwhile, the city was spending $2 million to $3 million annually on fare collection, according to Morgan Said, chief of staff to the mayor.

Similarly, D.C. fares are under 10% of the district’s transit budget, according to the Washington Metropolitan Area Transit Authority. In Richmond, Virginia, where fare-free buses have been in place since the start of the pandemic, fare revenue was just 8% of the overall transit agency’s budget.

“For some smaller transit agencies that don’t really collect much cash anyway … they’re almost spending more to collect the fare than they’re actually receiving in revenue,” said Grant Sparks, a director at the Virginia Department of Rail and Transportation.

That made the economic argument in those cities an easier sell. Still, Allen, the D.C. councilmember, ultimately wants “to move towards a fare-free system for all public transit.”

Even as the idea gains traction, zero-fare transit in America is the exception, not the rule.

In New York City, where a subway ride currently costs $2.75, officials have piloted ways to make fares more affordable. The city started the Fair Fares program in January 2020, which provides transit discounts to eligible low-income residents who apply.

But the city’s transportation infrastructure relies on fares for around 30% of its operational budget, a difficult sum to subsidize.

“Until a new plan emerges for funding public transportation in New York that would allow the MTA to be less reliant on fare revenue, there is no way to consider eliminating a vital revenue stream,” said Meghan Keegan, an MTA spokesperson.

Even in places like Virginia, which has had zero-fare success in individual cities, scaling the system to a statewide level has proven difficult. Virginia law limits how much the state can pay to WMATA, the transit agency that runs bus lines throughout Virginia, D.C. and Maryland.

Denver also plans to stick with fares for the time being, even as it deploys occasional fare holidays.

“In the absence of a significant new funding source, fares will remain an important component of RTD operating revenue,” said Tina Jaquez, a spokesperson for Denver’s Regional Transportation District. Denver’s 2023 transit operating budget is composed of 10% fares.

The conversation is happening at the federal level, too, although the debate has been split along the aisle.

As part of its spring 2020 Covid relief package, the federal government provided $25 billion in public transit funding. That summer, Democrats tried to rally support to extend the federal support. In June 2020, Sen. Ed Markey and Rep. Ayanna Presley, both Democrats of Massachusetts, introduced the Freedom to Move Act, which would provide federal grants for states and cities to institute free-to-ride public transit. It was referred to a Senate committee in April 2021 and hasn’t advanced.

Republicans have not been as bullish on the idea of going zero fare. A budget proposal in Republican-heavy Utah that would make the state’s transit system fare-free for a year met opposition from the state’s Republican House Majority Leader Mike Schultz. He said that the transit system was already subsidized enough and “nothing’s free,” according to local station KUTV.

Zero-fare transit has also drawn criticism from advocacy groups like Transit Center, a New York City nonprofit. The organization found in a survey of 1,700 public transit riders that people would rather have better transit reliability and frequency rather than zero fare.

The split debate means that a federal zero-fare policy likely won’t be established soon.

“There may be some European countries that are doing it at a national level. I don’t think we’re going to do that in the U.S., with 50 states and many more local jurisdictions,” said Virginia state Sen. George Barker, a Democrat. “We’ve got a long way to go to get into that league.”