Transit Passes Are Better But Free Fares Are Good Too.

My take on Zohran Mamdani's plan for free bus fares.

I am 100% convinced that the likely new mayor of New York City, Zohran Mamdani is a urbanist Twitter lurker so there’s a good chance he may read this Substack.

As we all know, Mamdani has proposed making New York City’s bus system free. Writer Matt Bruenig makes the case for Mamdani’s free bus idea on the basis that school bus systems and libraries are already free and he asked for a more of an enlightened debate on the utility of bus fares rather than a hyper-charged culture war. Well, I’m here to do that!

I helped start a group called East Bay Transit Riders Union in 2020. Socialists members quickly realized that the organizers were all YIMBY liberals so they made their own socialist version: People’s Transit Alliance (PTA). While EBTRU focused more on technocratic things like bus lanes and service, PTA prioritized organizing with the transit workers union and popularizing free fares. In my article on this divide, I wimped out on taking a direct position, mainly because it felt like a culture war issue and those are boring.

So I’m going to take a position here: free bus fares is not the optimal approach to easing low-income rider burdens, but it’s a well-intended idea and would have mostly positive benefits if implemented. I don’t think Mamdani is actually concerned with the optimal decision for transit agencies but rather the politically optimal decision to build his movement — and that’s not bad.

I usually support free buses for certain lines rather than systemwide or if the system is:

1. A shuttle or feeder line to more frequent bus or rail service competing with free or cheap parking.

2. The riders are irregular riders such as the Yosemite bus shuttle or a hotel shuttle.

3. The farebox revenue is so low that it costs more to operate and maintain fare collection equipment than what is returned by fares. Places like Kansas City where public transit is exclusively a extremely low-income service fit the bill.

Nothing in NYC is 2 or 3, but every system has a few lines where it’s 1. In these cases usually a free transfer suffices but alternatively the line can be made free. Usually made free through some business or office tower tax or some local area that benefits from the service.

The free transit debate is almost always about buses and not rail lines because buses have a low farebox recovery, meaning that buses already require a lot of subsidy to operate and fares make a small share of revenue. Rail line fares come much closer to paying for their service and are harder to swap out for more subsidy.

Most research on free fares shows that:

• Transit riders tend to ride transit more when the bus is free, increasing overall ridership.

• There’s fewer fights between drivers and patrons who can’t afford fares.

• Buses can board faster because less time is spent fiddling with cash or passes.

• Transit agencies get their funding in advance rather than depending on farebox and ridership.

The issues with free fares are that:

• It’s very consistent that free fares does not compel many non-transit users onto transit compared to service improvements, therefore it has a little impact on reducing CO2 emissions.

• Revenue that could’ve gone to improving service is used to subsidize fares, when agencies already receive little federal funding for operations.

• Buses can be slowed down with increased patronage by transit riders who would’ve limited their rides.

• Transit agencies have to get more funding, not just to compensate the loss of fares from existing ridership, but for increased ridership and thus increased service demand.

The last point is often forgotten in this debate but it will be an issue if NYC makes buses completely free. Transportation expert and congestion pricing leader Charles Komanoff— who otherwise wrote a positive analysis about New York’s free fare program — notes the disproportionate increase in service needs compared to riders:

WILL WE NEED MORE BUSES? We can expect NYC Transit buses to become more crowded if fares are eliminated and our projections are borne out. Simple math suggests that a 23 percent increase in bus patronage paired with only a 12 percent increase in overall bus speeds (mostly from reduced dwell times) will result in 9 to 10 percent more passengers per bus, on average. 24 Insofar as NYC Transit buses aren’t generally overcrowded, a barely double digit increase in per-bus riders shouldn’t be detrimental. On the other hand, such an increase could attenuate the calculated reduction in dwell times — a rebound that was beyond our scope here but merits pondering and perhaps modeling.

In Bruenig’s case for free transit, he argues that fare are just one way to collect a tax and that induced cost issues like these don’t matter in the debate. If libraries and school buses don’t require fares, Bruenig argues, then there isn’t a case that bus service needs them either. I think it’s worth examining why completely free fare transit is a fairly uncommon thing in the world and is more common in the United States where transit ridership is low.

The issue isn’t a matter of public services being free but how large those public services are, what they serve and how volatile or static the demand is. The goal of a school bus networks is to shuttle children who do not have wages to school during select hours of the day. Does it make sense to collect fares? No, children don’t make any money and their ridership is deterministic so their parents pay for it through property taxes. When kids grow up and go to college, they do pay for bus fare through tuition, and generally get a local free bus pass or service. While libraries are incredible public features, they aren’t infrastructure services and they’re not usually swarmed to the extent a user fee is needed.

When a public service really starts scaling to something everyone uses as an essential utility, we generally have user fees for it especially if its variable. Sanitation and sewers are essential utilities to every day life and you’re expected to pay for them. Why do these rates exist? They discourage excessive use and put the cost of maintenance on users who use it. That’s generally the idea behind user fees and fares.

Do we have an excessive transit rider problem to warrant fares? Sometimes. At peak hours in major cities on certain lines, yes. Fares can help keep people who don’t need to take the bus from doing so. For example, I live 19 minutes on foot from my local subway station in Berkeley. I could take the bus and transfer, but I’d be crowding it up during rush hour so I just walk. The fare helps convince me that it’s unnecessary to board a bus for 10 minutes and clear up space and dwell times for those who need it. Free fares have a clear effect of convincing people to use transit for short trips.

However, in favor of free fares, I do not pay a fare to flush the toilet or turn on the faucet every time. I don’t pay on trash day every time I take out cans. I pay for these things monthly, which psychologically just doesn’t feel as prohibitive as paying a fare. Motorists do not pay to get on the freeway every time or use public roads, although New York congestion pricing is changing that dynamic and in the correction direction. There is a point that collecting fares not only discourages first-time transit users but rate-limits transit riders in a country where transit ridership is poor.

Is collecting fares at the farebox the best way to conduct a user fee? Maybe not. Perhaps everyone should just pay a monthly fare via taxes and you get a free transit card. But not everyone uses transit or not everyone uses it at the same rate, which might warrant fares to extract extra taxes on those who do. We do have different transit agencies and it’s not always clear who should pay what tax for what service, such as cross-jurisdictional commuter lines.

But what’s the goal behind free fares? For socialists, its primarily motivated by reducing hardship for poor people by eliminating their transportation costs. I’m a supporter of universal transit passes for low-income households on all modes of transit, and I think it reaches this goal better. When I was in college I could clearly see how significant the role of free buses played in the mobility of poor college students. When they lost their passes they were far less inclined to ride the bus. In Berkeley, developers of new apartments offer transit passes rather than parking spaces near transit lines.

I’m happy to pay for transit because I’m funding a service that I use a lot and my income is high enough that it’s not a burden. How else can middle and higher-income renters pay for transit? Not through property taxes because renters like me don’t pay those. Income or payroll tax perhaps? The federal government doesn’t fund transit operations to a significant extent and they take my income tax. Trump’s new bill will make the transit fiscal crisis even worse. At least subsidized fare passes can also more easily be expanded to rail lines whereas the free fare discourse is exclusively about bus service.

Although I support low-income fare passes over free fares, they both accomplish the same benefits for low-income riders. At least free fares rids the embarrassment of the very poor who have to beg a driver to ride. There’s also downsides to means-testing as well like income-cutoffs and complicated paperwork trying to sniff out fraud that ultimately discourages more low income households from getting passes.

There’s also a major psychological angle to free fares which is its biggest draw. Unless you’re extremely poor, frankly most low-income households are not harmed by paying a bus fare, especially a flat local fare. Most low-income households in the United States (not NYC) own cars which cost much more in registration, insurance, gas and premiums than a $2 or $3 daily bus fare. Since operating a vehicle doesn’t have a fee every time you use the car, it psychologically feels better than paying for every bus ride. Because you can mentally de-tangle and budget around car payments from your car use in a way you cannot for buses.

This free fares vs. transit pass debate is like debating whether I should eat out on my break or bring a lunch to work. They both have trade-offs and unique benefits but whichever I chose I’m not going to die either way. I know I should probably make more lunches because its cheaper, but its more laborious and doesn’t taste as good. That’s the equivalent of using money to improve service and target subsidies for low-income riders. Eating out tastes better, takes less time and makes me happier but it costs more money — that’s like free fares. Whether the service is better or the buses are free, I don’t think in either scenario for New York City’s bus system will have major consequences.

Mamdani prefers to lean on populism to build a political movement and I don’t see an issue with it. I suspect that Mamdani isn’t making a decision based on what’s most fiscally optimal but what’s most popular. People like free buses. Mamdani is running off the idea of reducing people’s daily costs. Yes, running more service or expanding low-income passes would benefit low income riders likely more than a free fare, but psychologically, they resent paying the fare. Eliminating it makes them feel good and they ride the bus more, which could in turn build political support for increased funding. People should like their transit agency, not resent it.

Mamdani ran a campaign on affordability above all, and if that’s your priority then it makes sense to focus more on bus fares than service improvements. Most transit experts would disagree on making fares free as a priority for transit riders, myself included, but the goals are simply different and the debate just simply misunderstands this.

Fundamentally, there’s an issue with public transit agencies like New York’s, which is the backbone of New York’s economy, having to beg for funding from the state and federal government. In Japan, it was incredible seeing how much the train company owned real estate like offices, hotels, apartments around their stations. The train companies directly collected income from the economy and returned it to riders in the form of cheap fares. But in the United States, the NYC Subway, DC Metro, SF BART etc. owns so little land despite contributing so much to the value of land. Their fares are higher and their agencies more dependent on subsidies as a result.