The business case for fare-free buses in small transit agencies

[Christian MilNeil]

Steven recently shared a rather poorly written opinion piece on this subject that was written by a college student, so I thought I'd share a more professional, quantified analysis with everyone:

https://mevatransit.com/wp-content/uploads/2025/02/MeVa_Fare_Free_Analysis_02042025.pdf

When Merrimack Valley Transit Authority eliminated fares, here are some of the benefits they received:

• Dwell times at bus stops were cut in half, resulting in faster buses (no more waiting for passengers to fumble for coins or their phones at the farebox)
• Eliminated fare collection operational costs (e.g. cashbox security, credit card fees, etc.)
• Dramatically higher ridership: MeVa's buses are carrying about 60 percent more riders than pre-Covid
• According to rider surveys, nearly 20 percent of all trips on MeVa would have been done with a private car if the bus hadn't been free. That mode shift generates nearly $1 million in savings from avoided vehicle operating costs, and another quarter-million dollars in savings from reduced regional traffic congestion.
• "The quantifiable financial benefits of the fare-free program are over $2 million annually, exceeding the amount previously collected by fares"

Christian MilNeil
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[James Cradock]

Southeastern Regional Transit Authority (New Bedford, Fall River area) extended fair-free service again through this summer. 

https://massbudget.org/2025/01/13/fare-free-srta/

Trips on SRTA grew 55.5%. 

Note the positive impacts for lower income people and minority groups. 

Thank you. 

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[Joey Brunelle]

Hear hear! 

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[Aaron L. Rosenblum]

I would hope that as a group we can agree that the "free buses aren't really free" trope is a distraction - we all understand that funding for services comes from somewhere. So I like that we're mostly saying "fare-free" rather than "free" here, which is accurate without obscuring the costs (which, again, I don't think anyone here would deny exist). Moving the costs away from the point of service has lots of advantages beyond eliminating dwell times and cash box upkeep - it's much easier (functionally, if not politically) to make sure the burden is progressive rather than regressive when it is assessed as a tax rather than a fee/fare.

What public resources we decide to make free and what we decide to charge for is astonishingly arbitrary, which in general makes me lean towards making more services free at the point of service, and certainly making transit fare-free. I worked in libraries for 20 years. In the last five years, late fees (though not replacement fees) have been abolished by most public libraries in this country, a change driven by librarians and library workers who knew the income was negligible, the time spent enforcing and collecting and handling the money a waste, and the effect mostly that people no longer visited the library or accessed vital information. You’ll notice your local library hasn’t shuttered as a result. 

More broadly - at public libraries, the books (which may require an annual acquisition budget in the $100,000s) are free but the photocopies (annual costs in the single $1000s or low $10,000s) cost $0.15 a piece, resulting in an enormous amount of calculating, money-handling, and haggling for almost no meaningful revenue. Having had hundreds, maybe thousands of these interactions across the reference desk at PPL, I can tell you that charging for copies did nothing to help the library or the patrons. At worst, with the bus or the copier at the library, it's using money intentionally to deter use of a service, which you also see whispered as an argument against fare-free transit. Okay, I know, enough about libraries. 

The friction argument is a really strong one, I think. Though I am happier to ride my bike anyway, I do sometimes consider the bus, then try to remember if they still take the Dirigo card in my wallet or if I need to get an app (inevitably, I don't think about this in advance, I think of it when I need to leave for work), whether the card has any money on it, whether they take cash anymore and if I have the right denominations...and then I just ride my bike. But the same is true when I consider the bus versus my car. 

It's also unfair to say that (local) cars use the (surface, non-restricted) roads for "free." The costs are just paid through excise and fuel taxes, not at the point of service, as would be the case with fare-free transit. And needless to say we don't assess fees directly on pedestrians at the point of service, nor on cyclists. There's every reason to treat mass transit in this way, and move the revenue generation away from the front of the bus. 

Aaron

 

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[Myles G. Smith]

Thanks for sharing, Christian!

Like the author of the WBUR piece, I went to Boston University and rode on those same painfully slow busses. My economics professors at the time did a nice job convincing me of the Free Rider Problem, how giving away a service for free degrades its quality, and how people paying for a service results in the best possible outcome. 

The more I have learned about our massive and myriad subsidies to every aspect of driving, the more compelled I am for the argument for free transport (and higher fees on driving). Our fuel and excise taxes paid by drivers are far far lower than the cost to build, plow, and maintain our roads. The subsidy for passenger cars is at least 20%, and I've seen estimates as high as 80%. Of course, drivers don't pay for most on-street parking. People with cars have their storage provided, plowed, and maintained for free by everyone else, including people without cars. Parking passes are subsidized in taxes. The Trump Administration just passed a new tax break for buying more cars! 

The more cars you have, the bigger and heavier your vehicle is, and the more you drive, the more subsidized you are and the more you degrade the quality of the public goods - the streets, in terms of pavement, safety, air quality, livability, and access for others. Walking and biking are socially beneficial, and busses are as close to a social net benefit as you can get with motorized transportation. Buses are safer for everyone, more equitable, a more efficient use of public space, better for public health, encourage walking and biking and better land uses. We could just increase the pay-fors for driving and use it to pay for free buses! 

Politically, that's hard. Transit advocates are always playing defense, and so these arguments are logical, but they probably won't help the long-term argument that our biggest transportation problem by far is broadly subsidized private vehicle driving. 

Myles

On Fri, Mar 6, 2026 at 8:55 AM Joey Brunelle <joey.b...@gmail.com> wrote:

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[Aaron L. Rosenblum]

Yes to all that, Myles. 

I didn’t mean to imply that the amount that (surface street) drivers pay for infrastructure (relative to transit riders) is currently set as it should be, just that it’s assessed through fees/taxes rather than at the point of service during travel. 

 Aaron 

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[Rauschpfeife]

Aaron's got it completely right. The thought experiment -- why don't we charge to use the sidewalk? -- says it all. The dirty secret is class and race. And to some degree, age. Ride around on Portland buses for an hour or two and you'll see what I mean. 

One small cavil: I don't think excise and fuel taxes come anywhere near paying for the mostly free public car infrastructure. Not even operating costs, not to mention depreciation and land value and opportunity cost and the various externalities (noise, pollution, inconvenience and risk for everybody but drivers, etc.). 

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Best, 

Michael Smith

anacharsis.substack.com

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[Rauschpfeife]

No doubt to Myles' great annoyance, I insist on calling him cousin. We Smiths have to stick together. 

Of course everything he says here is correct and well expressed. I might want to insert one kinda conceptual footnote. To wit: I don't think we should ever talk about this particular source of social revenue offsetting or being earmarked for that particular social expenditure. It never really works that way. Money, notoriously, is fungible, and one greenback looks very much like another. Typically, once some revenue stream is "earmarked" for a particular category of expenditure, the municipality or agency responds by reducing the flow of funds from other sources. So earmarking typically nets out to zero (and often less).  And the whole mental exercise suggests, as an implicit premise, that total expenditure is somehow fixed (it's in Leviticus somewhere, or perhaps the Code of Hammurabi). Rather, I think we should frame it as "what do we want to spend our money on? And if we don't have enough money, where do we get more?" 

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Best, 

Michael Smith

anacharsis.substack.com

On Fri, Mar 6, 2026 at 11:23 AM Myles G. Smith <myles...@gmail.com> wrote:

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[Todd Morse]

I missed the original article but I do think it is important to be careful with bus fares.

I don't think in terms of the budget being fixed but instead in terms of what is the best way we can spend each dollar to get the best transit system we can. Portland gets about 20% of it's operating revenue from fares. I wouldn't want to cut the GPMetro operating budget by 20%. If we were able to increase the GPMetro budget by 20% to cover that cost then I don't think fare reduction would be the best place to spend that extra money. We could spend that to get service on weekends, nights, and mornings or we could increase the frequency of a key line or two. I think this would do a lot for rider experience and therefor for ridership. Time spent waiting is a real cost too. The goal is to get to a consistent schedule with 15 minute frequency and to do that we will need to eventually more than double the GPMetro budget and I think we should do that.

If you have a fare box recovery of 20% and expand service that ratio can stay the same or even increase if it drives more ridership so you are essentially paying 80% of the operating costs of that expansion as well. Without fares we would need to cover the immediate shortfall and also pay more for expansion than we otherwise would.

The math for arriving at the 2 million dollars considers things a bit too narrowly in my opinion. They consider the benefits of going fare free in a vacuum and it is impossible to compare that to a counterfactual where the service grew with fares. It is notable that their fare box recovery ratio before this was already very low so the move actually might have made sense for them but it also means the ratio will never improve. They mention they made several improvements at once so it is unclear how they are attributing the increase in ridership to arrive at those numbers.

[Rauschpfeife]

Todd puts the matter in a sensible way: i.e. consider fare reduction along with service improvement as desiderata, and then rank 'em. In that context, I personally would probably choose service improvement over fare reduction. But the implicit scarcity argument still lurks, I think, and eliminating fares makes a larger political, cultural, even ethical point. 

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Best, 

Michael Smith

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[James Cradock]

Thanks for this. 

Fare-free transit can significantly increase use of transit. See GRTC (Richmond, Va.) in addition to the other systems in this thread. 

Thank you. 

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[Maya Lena]

For my family, the largest barriers to METRO use are 

• frequency
• reliability
• safety of both accessing and waiting for the stops

We live in Nason's Corner, very close to the stops for the #4 bus. We almost never use the bus because the times we have, we have had to wait 20-30mins, even when we arrived at the stops on time.

We need to improve frequency to 10-15mins. When will Portland ever prioritize METRO as a viable option for MOST of its citizens?

Maya

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[Joey Brunelle]

I'd like to take this opportunity to plug the real time bus tracking app that Todd Morse at the Urbanist Coalition made: https://transit.ucop.me/

You can use this to figure out exactly when a bus will come (including when it's late or early) do you can time when you arrive at the stop. 

I have this bookmarked and added to the home screen on my phone so it's effectively like an app. It's pretty awesome. 

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[John Schreiber]

Maybe this has changed since the last time I tried, but when I rode with my family, there was no way to pay for more than one ride with the app, which added a lot of friction. 

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[Damon Yakovleff]

I completely agree with John, the app has a lot of shortcomings. It would be fantastic if it could be upgraded to allow for multiple fares, especially with a differential for children / seniors. 

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[Rauschpfeife]

VERY cool. 

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Best, 

Michael Smith

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[John Clark]

The app (and fare cards) started allowing for "ten-ride passes" a couple years ago where you prepay for the pass (at a 10% discount on fares) and can use them to tap/scan twice and cover more than one rider at a time. As someone who rides the bus 2-4 days a week, I find it this option to be worth it as I wouldn't ride enough to benefit from the fare cap, and I can tap in friends/family when they are riding with me. Unfortunately I don't think they account for reduced fares for children/seniors though. 

I'm assuming that if/when they implement new fares later this year, they'll also implement the "tap-to-pay" with any credit/debit card functionality that they've had in the pipeline for a little while now - we'll see what that does to options like the 10-ride pass/covering multiple people on the same card...

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John Clark (he | him | his)

[Joey Brunelle]

I think we're talking about different apps - the one I linked to is not the official METRO app, it's a homemade one made by local Todd Morse that just tracks busses, it doesn't handle fares.

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[Damon Yakovleff]

Good clarification. John and I are referring to the "official" Umo app.

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[James Cradock]

I second the UCP Transit Times app. 

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[Wes Pelletier]

I tend to agree with Todd's analysis, while still hoping that we can get service/funding to the point at which free fares makes the most sense. w/r/t to the app, tap to pay is coming soon, which I think and hope will remove a lot of friction for most folks.

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[Zack Barowitz]

Are credit card payments on the horizon? I find that most convenient. I also think a pay want you want system could work. 

And then there are fares based on length of trip, which make sense. 

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[Joey Brunelle]

PS two days of Trump's Iran war would pay for 8.5 years of free busses in New York City. We have the money, it's just a question of how we allocate it.

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[Myles G. Smith]

Lots of great points here. My argument is probably closest to Wes's - that fare reduction / elimination should be a goal and talking point, and as Joey points out, should be feasible. It is not currently, for the reasons Michael explains, and we have a lot of work to do to get people to view public transportation as a public good rather than a government service. Until we get there, I tend to agree with Todd and Maya, that improving the service frequency and duration while maintaining the fare recovery ratio may make more sense. The poorest folks with the fewest alternatives - would they rather the bus just arrive when they need it and pay an extra 25 cents? I would put consolidation of transit services (maps, routes, schedules, vehicles, signage, markings, etc) and reduced/integrated transfers at the top of my list. 

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[Rauschpfeife]

Given actual political/cultural circumstances, this seems about right. I like the idea of agitating for free transit, though, just to be aspirational and thought-provoking (hey, the sidewalks are free, why isn't the bus?). 

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Best, 

Michael Smith

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