Are free buses closer than they appear?
The Gateway Cities Journal
Free buses may be the bold idea Massachusetts needs to rebuild a culture of public transportation as we emerge from the pandemic in 2021.
Considered a fantastical notion just two years ago, pilot projects in Worcester and Lawrence provide an enticing glimpse of the idea’s viability. The potentially dramatic improvements to ridership, equity, convenience, and the environment have changed minds, while the economics are more feasible than one might expect. Leading state legislators have filed multiple bills to make it happen, led by Sen. Joe Boncore’s “New Deal for Transportation.”
In the years before the pandemic, the Worcester Regional Transportation Authority (WRTA) faced a troubling decline in passengers. Passenger trips plummeted from 4.2 million in FY2016 to 3.2 million by FY2019 after a 2017 fare increase.
The Worcester Regional Research Board (WRRB) looked at the problem in May 2019 and again in November 2020. It found that fares in 2018 made up only 14% of the WRTA’s total revenue—well behind municipal assessments, federal grants, and state assistance. The opportunity to completely rethink the public transportation system became clear.
Meanwhile in Lawrence, when Mayor Dan Rivera discovered that it would cost only $225,000 to make the city’s three busiest bus routes free for two-years, he announced in September 2019 that the City would allocate the funds from its municipal reserves. Ridership on the free routes increased by 24% in the following months, exceeding expectations.
Dollar for dollar, the benefits of fare-free buses may be far greater than any comparable transportation investment, particularly for smaller systems like the RTAs. According to IDTP, the lowest-earning fifth of Americans spends nearly 30% of their income on transportation, and the next fifth of the population spends 22%. With the average cost of car ownership in the US over $9,500, buses are a lifeline for the poor and those who can’t drive. Surveys revealed that 90% of riders on Lawrence’s free bus routes had salaries under $20,000. With the price of a single bus ride $1.25 in Lawrence and $1.75 in Worcester, cost can be a real barrier.
This data suggests that if transit agencies can resolve the funding challenge, the benefit to families and individuals could be extraordinary. During a time when transit authorities struggle to carry out their basic mission, the failing status quo calls for a paradigm shift.
So far, transit authorities in Massachusetts appear reluctant to embrace fare-free buses. Fares are one of the few sources of income they control, so change is unlikely without a predictable stream of replacement revenue.
But the cost of fare collection itself is high. The WRRB estimates that the WRTA spends at least $850,000 annually to collect the $3 million it takes in from fares—nearly one-third of the total.
With transit agencies eyeing cashless, next-generation fare collection systems, that expense promises to escalate significantly. We have already seen the Automated Fare Collection project (AFC 2.0) for the MBTA balloon to a billion dollars. If smaller RTAs adopt similar technology, it is very possible that it will cost them more than they collect.
The state has discouraged RTAs from reducing fares by requiring Regional Transit Authorities (RTAs) to prioritize “farebox recovery ratios” as a key performance metric, and bound them to it through Memoranda of Understanding. A better metric would be cost per rider per mile, which would more accurately measure each RTA’s effectiveness. When free buses increase ridership, the cost per rider goes down.
Bus fares themselves don’t produce a tremendous amount of funding. Setting aside the MBTA, bus fares collected by the other 15 RTAs in the state generate a total of $32 million. If we deduct 30% for fare collection expenses, the net revenue comes down to $22.4 million.
To put these numbers into perspective, six RTAs produce annual fare revenue about equal to or less than the cost of purchasing just one electric bus ($750,000 in 2019).
The WRTA went fare-free as a health precaution against COVID-19. Thanks to activism by the Zero-Fare WRTA Coalition, its board voted to extend the program until July 1st of 2021.
The WRTA is expected to receive $36.3 million from the American Rescue Plan Act, which follows the $37.2 million it received under the CARES Act. In total, transit authorities in Massachusetts are about to receive over a billion dollars for the second time in a year.A fraction of this federal money could provide support for up to two years of free buses, giving agencies time to study it and allowing state legislators the chance to complete a transportation revenue bill.
As traffic congestion increases by the week, and businesses hoping to return to their offices, it would seem that one of the best ways to bring people back to public transportation would be to make the buses free.