What If We Give It Away? A Look at the Feasibility of Free or Cheaper CTA service

Photo: John Greenfield
Photo: John Greenfield

[Streetsblog Chicago editor John Greenfield publishes a weekly transportation column in the Chicago Reader. We syndicate the column on Streetsblog Chicago after it comes out online.]

Last month, community organizer Jahmal Cole floated a bold proposal: Eliminate all fares for riding the CTA. As the founder of the My Block, My Hood, My City nonprofit, he often leads underprivileged youth on transit field trips to different neighborhoods.

“I think [the CTA] should be free,” Cole said during a Metropolitan Planning Council discussion of Chicago segregation, to applause from the crowd, according to a report by Streetsblog Chicago’s James Porter. “I used to ride the Red Line every day… It’s like the aorta of Chicago. I would definitely make it extended farther than 95th Street, and I would make it cheaper to ride.” He argued that providing public transportation at no cost to riders would help more Chicagoans access cultural, educational, and career opportunities.

Some Streetsblog commenters scoffed at the idea. “‘I think it should be free,’ means he thinks someone else should pay for his transportation, as nothing in this world is free,” one reader wrote.

But is it really such a crazy idea from an economic point of view? Transit helps people get to schools, jobs, and preventive health care, and if a higher percentage of current Chicago residents were well educated, employed, and healthy, that could save a lot of money for society. And coaxing more people out of cars and onto buses and el trains would mean less congestion, pollution, and crashes, which would lead to less lost productivity and property damage, lower bills for public health and first responder services, and less wear and tear on roads.

For example, a 2014 study by the National Highway Traffic Safety Administration found that U.S. traffic crashes cost $871 billion a year in economic and societal costs. Since the city of Chicago represents about 1/120th of the nation’s population, our share of that loss could be roughly $7.3 billion.

The seemingly utopian concept of free transit isn’t so foreign in Europe. Estonia’s capital city, Tallinn, population 450,000, was a pioneer in this area, rolling out free transit service for residents in 2013. City officials there say that the program is financially sustainable, since it has encouraged more people who live in the region to establish residency in the city. They say the resulting $25 million-plus gain in income tax has more than covered the $15 million in lost fare-box receipts, allowing the city to continually increase transit service to meet demand.

But could complimentary public transportation work in a metropolis as large as Chicago? We may soon find out, since in March Paris’s Socialist mayor, Anne Hidalgo, announced plans to study the feasibility of making transit free across the city of 2.2 million in an effort to boost mobility and fight pollution.

Still, when I asked the CTA about Cole’s proposal, spokesman Steve Mayberry indicated that the agency doesn’t consider the concept worthy of serious consideration. He noted that state legislation that has been in place for 70 years requires the transit system to recoup half of its annual operating budget ($1.51 billion in 2018) from fare-box revenue. “This kind of idea has zero successful precedent among U.S. transit agencies,” Mayberry added.

It’s true that Seattle ended its 40-year-old policy of free downtown transit service in 2012 as a cost-cutting measure. On the other hand, the regional transit system in Chapel Hill, North Carolina, that state’s second largest, is still free to ride thanks to funding from local municipalities and the University of North Carolina, and there are plans for a future service expansion.

Chicago transit experts and advocates were also skeptical about whether totally free transit could work here. “Due to our city and state budget problems, we are probably the last metropolitan region in the country that should considering this,” said DePaul transportation professor Joe Schwieterman. He added that if the CTA was a free resource, it would create a “tragedy of the commons” scenario where riders would be more likely to abuse the system, amplifying passenger concerns about safety and cleanliness.

Even staff from the progressive Active Transportation Alliance expressed doubt that free rides for all Chicagoans could be feasible under the current fiscal climate. But governmental relations director Kyle Whitehead said the group has been working with UIC’s Great Cities Institute about quantifying the burden of transit fares on low-income residents, and how a lack of transportation options prevents many people from getting and keeping a well-paying job. Whitehead said this research could help make the case for reduced fares for low-income residents. (The CTA currently provides reduced or free fares to CPS students, low-income seniors, people with disabilities, and members of the military.)

“Yes, yes, and thrice yes,” responded Ronnie Matthew Harris, head of the south-side transportation advocacy group Go Bronzeville, to the idea of income-based CTA fares. “I’d go further and say it should be free for all under 18. Not [just] because of it increasing access, but to help create a generational culture of use of and reliance on public transportation.”

Matt Wilson, an economic development planner with the Great Cities Institute, told me the think tank’s research for Active Trans found that in lower-income communities on the south and west sides, the annual cost of buying CTA monthly passes ($1,260) is more than 5 percent of the per capita income for the total employed population. In Little Village the figure is 11.6 percent, and in the Altgeld Gardens area the number is 15.1 percent—a major financial burden.

Map created by the Great Cities Institute for the Active Transportation Alliance.
Map created by the Great Cities Institute for the Active Transportation Alliance.

Wilson added that it would be “incredibly hard” to measure whether reducing transit fares could pay for itself in terms of lower societal costs. “I would imagine that if CTA or the city was to subsidize fares, it would be more of an investment for the social benefit of Chicagoans, not something where cost is intended to be recovered.”

Audrey Wennink, a director with the Metropolitan Planning Council, acknowledged that offering free transit for all Chicagoans would be an uphill battle. However, citing last month’s Paris announcement, Wennink said that if there is political will in Illinois to address climate change and economic inequality—she noted that about 71.5 percent of CTA riders are people of color and 29 percent are low-income—it might be possible to overcome the financial barrier through creative revenue strategies.

For example, Wennink said, more of the state transportation budget could be shifted from roadways to transit, or tolls could be added to all the highways in the region to fund public transportation. Another idea would be to create a new tax on employers that would be earmarked for transit. About 42 percent of the $12.3 billion annual operating budget for the Paris regional transit authority comes from a tax on firms with ten or more employees.

But if those progressive ideas are nonstarters in a broke, tax-fatigued state like Illinois, Wennink had a couple more modest proposals. The Seattle-area transit authority currently offers the Orca Lift program, with $1.50 fares for residents earning less than 200 percent of the federal poverty level, similar to Chicago’s Divvy for Everyone discounted bike-share program. Wennink added that cities like Portland, Oregon, have implemented “fare capping,” which means that riders who pay as they go for multiple rides during a given time period never spend more than the price of the equivalent transit pass.

While free CTA for everybody might not be in the cards in the foreseeable future, making public transportation more affordable for low-income residents is a no-brainer. “Making [transit] even more accessible to riders could be great for our region and really distinguish Chicago as a place with high quality of life,” Wennink noted.

  • Roo_Beav

    Corvallis, Oregon has a completely fareless bus system. It’s a fairly good system for a city its size (just over 50k). It’s a liberal college town, so the politics were favorable. An added benefit of going fareless is that dwell time is greatly reduced, so service is more attractive because no time is wasted to process payment.

  • Cameron Puetz

    Ames, IA (a similarly sized college town) had a mostly fareless bus system or awhile as well. They technically had fares, but between the free fare zones, and the groups (children, seniors, and university students) that got free fares, basically no one ever paid. Whenever someone did pay drivers seemed confused and slightly annoyed that the line was held up.

  • Cameron Puetz

    Motivated by pollution concerns, Germany is preparing for a widespread trial of free transit.

    https://www.theguardian.com/world/2018/feb/14/german-cities-to-trial-free-public-transport-to-cut-pollution

  • Random_Jerk

    One could think that second/third – whatever – city in the most prosperous country in the world could afford free transportation to it’s citizens….

  • Kelly Pierce

    Chicago is prosperous because of capitalism and the
    individual drive for economic self-sufficiency with the aspiration for a better
    material life. Free rides amount to socialism and the promotion of government
    dependency and a low output workforce.

  • johnaustingreenfield

    Yeah, I guess that explains why free transit is becoming increasing popular with all those impoverished Social Democratic countries in northern and western Europe.

  • Tooscrapps

    What do “free” roads amount to then?

  • planetshwoop

    There is a increasingly common school of thought that advocates for a “universal basic income”. This says instead of applying for benefits, everyone in society gets some funds to do what they please.

    Regardless of the merits of that, you can exchange “income” for other free stuff, like housing vouchers, or bus passes, or yeah, give it away free.

    There are also ways to make it more frictionless without having to give away access. Instead of having 1 ventra scanner at the front of the bus, have open access and let people scan on them after boarding. Same with the subway.

    Given the headlines earlier in the week about the senior who fatally struck a pedestrian, I think free transit for seniors and students is seriously worth considering, and yes, I would pay more to support that.

  • Chicago60609

    This idea is stupid enough that it will probably be implemented in one way or another in Chicago, home of stupid governance.

  • Chicago60609

    Illinois drivers paid $6.4 billion in fuel taxes in 2017.

    http://tax.illinois.gov/Motorfuel/Mft/mfgallonage.pdf

  • Tooscrapps

    My comment just went right over your head didn’t it?

  • johnaustingreenfield

    Yep, but fuel taxes don’t even come close to covering the costs of roads: https://usa.streetsblog.org/2015/11/25/its-time-to-stop-pretending-that-roads-pay-for-themselves/

    Sure, we all benefit from products being shipped by truck, the ability to take intercity buses, etc. But, partly due to federal and state gas tax levels that have been stalled since the early 1990s, those of us who don’t own cars are paying more than our fare share to subsidize roads for those who do, via sales, income, and property taxes.

  • Chicago60609

    …and that map…

    Minimum wage in Chicago is $11. $11 X 40hrs X 50 wks = $22,000

    A monthly pass for unlimited rides is $105 X 12 = $1,260

    $1,260 / $22,000 = 5.7%. Of course students ride free to school, and a senior pass is discounted.

    If you’re not working full time, would you need a monthly, unlimited ride pass every month of the year?

  • Tooscrapps

    $105 is only 45 one-way trips (say average $2.375 per trip).

    If you couldn’t afford a car, I would 45 trips in a month might be low.

  • Batboy

    Maybe not impoverished today, but you might want to look at their debt. The bill will come due soon. Capitalism has made the US dollar the world’s reserve currency. Why do you think China even has a shot at replacing us? Their continued march for communism?

  • johnaustingreenfield

    CPS students don’t ride for free:
    https://www.transitchicago.com/reduced-fare-programs/#students

    Nor do university students:
    https://www.transitchicago.com/upass/
    U-Pass will be going up to $158 for the school year — still a great deal, but not free.

  • johnaustingreenfield

    As stated in the article, city officials in the Estonian capital report that the free transit policy is resulting in a net revenue gain.

  • Bucktown

    And fares don’t even come close to cover the cost of the CTA. This is an asinine idea.

  • Bucktown

    Do you mean those nations with homogeneous populations where taxes are well over 50% of income? The cost of the CTA is not what is keeping people from riding it. It is because the service sucks. If you take more money away from it will suck more.

  • johnaustingreenfield

    Right, subsidizing transit is the rule in cities all over the world, because it has many societal and economic benefits, as detailed in this article. On the other hand, having a car-dependent transportation system has many societal and economic costs. The annual $871B figure for U.S. crashes I mentioned is just the tip of the iceberg — there are also all the public expenses related to congestion, pollution, climate change, sedentary lifestyles, and more. As such, it makes perfect sense for us to spend less money subsidizing driving and more money subsidizing transit.

  • Chicago60609

    $105 is for unlimited rides.

  • johnaustingreenfield

    The racial and ethnic diversity of the Paris region, one of the cities that’s currently considering free transit, likely approaches that of Chicago. And without getting too far off on a tangent here, in countries with high tax rates, citizens tend to benefit from excellent transportation infrastructure, essentially free healthcare and higher education, long family leave and vacations, affordable childcare, and the some of the highest standards of living and happiness rates in the world, so you get what you pay for.

    I’m not advocating for simply eliminating CTA fare box revenue, which pays for 50% of the system’s operating budget, without replacing that funding. As detailed in the article, there are lots of ways we can raise that money and actually increase funding for the CTA and improve service. I also noted that Tallinn, Estonia’s free transit policy has resulted in more tax revenue, which has allowed them to increase transit service to meet demand.

    Of course, we need the political will to shift our focus from keeping driving (which we want less of) artificially cheap, to making transit use (which we want more of) an affordable, appealing option for more people. For starters, it’s pretty absurd that the Illinois gas tax has been stuck at a flat 19 cents a gallon since the early ’90s.

  • Chicago60609

    It’s not “free” – it would just be paid for in another way.

    The beauty of a market with prices, is that prices convey information, both to the rider and to the ride provider.

    As I said in my initial comment here, the people running Chicago are definitely stupid enough to adopt this idea. What will inevitably happen is that public transport will mimic the Chicago experience with public housing, and we all know that turned out.

  • Chicago60609

    I stand corrected.

  • Chicago60609

    People don’t pay in “tax levels,” they pay in dollars and cents. Motor fuel revenue is high as it’s ever been, it’s just that money is used for things other than roads.

  • Batboy

    Unfortunately, John, your reference to Tallinn is not a one-sided story here:
    Cats also found “mixed evidence” whether the scheme has “improved mobility and accessibility of low-income and unemployed residents … [and] no indication that employment opportunities improved as a result of this policy”.

    According to Cats, free public transport is not the no-brainer everyone might initially think it to be. “The idea still faces political opposition and visitors who use public transport are less satisfied with having to pay more for it than locals.” But in the case of Tallinn it is almost exclusively used by residents, not tourists – who rely on private buses, taxis and most recently Uber.

    There is also a risk, says Cats, that free public transport could lead to less investment in the service. “In the event of an economic depression, investment in public transport will be more exposed to potential budget cuts if they are not earmarked,” he says.

    —–

    Also, it’s not really “free” since residents are being taxed more for it (relative to the commuters coming in from outside the city). It’s essentially a compulsory membership. And tourists have to pay a fare. Truly free transportation would be not taxing but, of course, benefiting from the externalities. That’s not what’s happening in this case.

    https://www.theguardian.com/cities/2016/oct/11/tallinn-experiment-estonia-public-transport-free-cities

  • Tooscrapps

    And you asked why someone who doesn’t work full time would need an unlimited pass. 45 segments is your break even point. If you can’t afford a car and don’t ride a bike, 45 segments in 30 days is pretty doable for all sorts of people.

  • CIAC

    I don’t think the U-Pass is optional for students. The price is included in their tuition, from my understanding. So by the logic that you are using, that there is such a thing as “free transit”, it is free. Your suggestion of the possibility of “free transit” is for the price of this transit to be included as part of the tax dollars we pay. So I don’t understand why that logic wouldn’t also apply for U-pass users who pay through tuition costs and why you are resisting the use of the word “free” in that circumstance.

  • CIAC

    Fortunately, the CTA (as well as the city as a whole) is required to lay out a budget and has to account for whatever it cuts from the system when it takes away half of the operating revenue. Given that reality, it’s not likely to happen. But that probably really is the only major thing stopping it. When the government doesn’t have to account for the effects of what it does it has no problem deciding to impose major burdens that hurt the economy and its people. For example, the implementation of the $13 minimum wage by next year that means that it is harder to employ people and operate a business. There’s no way to see the jobs that are lost and the revenue that isn’t created because of that so the city gets to pretend that these things are not there. It wouldn’t have that luxury with free transit. Everybody can easily see the revenue that is lost and what services have to go as a result. It’s a main reason why there was enough political pushback for Blagojevich’s free senior rides to be (largely) repealed.

  • CIAC

    There’s not the slightest bit of evidence that that senior would have been using public transit if it were free. This occurred on the relatively low transit northwest side (from my recollection) at a strip mall.

  • CIAC

    “I’m not advocating for simply eliminating CTA fare box revenue, which pays for 50% of the system’s operating budget, without replacing that funding. As detailed in the article, there are lots of ways we can raise that money and actually increase funding for the CTA and improve service.”

    If the CTA is able to convince elected leaders to provide significantly more funding, why wouldn’t you want that to go to service improvements rather than for eliminating fares? That’s the choice. I don’t see why a small fare of about the price of a cup of coffee at Starbucks (and half that for seniors and students) is such a huge deal that somehow eliminating this would do much at all for anyone or for society at large. This is a tiny portion of what anybody spends per day. It is unlikely to change people’s transit choices very much. It’s clearly better to use this money for other purposes. And of course, that’s even before one even considers the reality that the legislature is going to be much less likely to provide increased funds if it goes to giving everybody free-rides than it would if it would improve the system at large.

  • david vartanoff

    So CTA is required to have 50% fare recovery. This is high compared to a national average circa 18 IIRC. How much does CTA spend on fare collection–turnstiles, fareboxes, coin counting, ventra card readers, cards, personnel whose entire jobs revolve around fare collection and processing? If the total costs approach a significant fraction of the recovery rate, the math is clear–junk the fare. The speed up of all door boarding on buses alone will be an improvement. The immediate jump in discretionary spending–particularly among those in the map where fares are the highest % of their incomes will be a shot in the arm to the city economy. Secondly, we should expect greater usage which firstly means more citizens able to travel to more destinations, and secondly more riders in off hours which is useful for security and is currently unused capacity.
    Let’s see the numbers.

  • CIAC

    ” How much does CTA spend on fare collection–turnstiles, fareboxes, coin counting, ventra card readers, cards, personnel whose entire jobs revolve around fare collection and processing? If the total costs approach a significant fraction of the recovery rate, the math is clear–junk the fare. ”

    There’s no way in the world that those costs would come anywhere close to 50% of all operating costs. If you look at the very end of the document linked to first you this page, you will see the operating costs separated into general categories: https://www.transitchicago.com/documents/?pg=2 The CTA spends about $120 million or so a month in operating expenses. For the full year, the operating budget is about $1.5 billion. And actually, it appears that not a single cent of that is spent on the things you mention (though as you can see by looking at the catagories listed, it would be a very small percentage of operating costs if this was included in those numbers). That’s because all of the fare collection costs are paid by Cubic, the vendor that operates the Ventra system. The CTA’s contract with Cubic, which goes from 2014 until 2024, was for $454 million and includes the agreement that Cubic pays those costs: https://www.secureidnews.com/news-item/chicago-transit-awards-454-million-contract-to-cubic/ So over the ten year contract that’s $45.4 million a year. That’s basically the fare collection expenses for the CTA. That’s around 3% of the CTA’s operating costs per year. So no, it doesn’t approach a significant fraction of the recovery rate.

  • Sally Wright McLinn

    The CTA fares are already some of the lowest in the country due to subsidies. Take away the subsidies and we would be payinr $5-6 a ride. Ask New Yorkers. They pay some of the highest fares.

  • Sally Wright McLinn

    Exactly. We would pay with higher taxes. Maybe an “entrace” fee into the CTA station. However, we the taxpayers would pay.

  • Dennis McClendon

    Austin’s Capital Metro tried free transit for about 18 months in the mid-80s, but dropped the experiment when their buses became rolling homeless shelters. Isn’t that even more likely in our climate?

    Of course, if there’s no charge to re-enter, maybe the guys who live on the Blue Line would actually leave the train when they need to use the bathroom.

  • Wanderer

    Improved service increases ridership more than low fares. If CTA somehow got enough $ to
    eliminate fares, it would be better
    spent on making service faster, more frequent and more reliable.

  • rentpayer

    Owners of tall buildings provide “free” elevator service, because it makes their tenants more willing to pay higher rent. Likewise, a city could provide “free” transit and recover the cost from a land value tax. However, as noted by others here, there are practical problems in a city with many homeless. And, as also noted by others, the abysmal quality of transit service here — it is uncoordinated, slow, operates limited hours, and provides poor connections to many job centers — means that improving the service is probably a better use of funds than eliminating fares.
    However, there is something to be said for charging higher fares for rides which are expensive to serve — peak hour, peak direction trips — while cutting fares for off-peak and crosstown trips, which might net benefit low income people.

  • Chicago60609

    Like Lyft or Uber using surge pricing…they won’t like that idea here on StreetsBlog.

  • Chicago60609

    Why subsidize either?

  • Kelly Pierce

    Drivers pay for “free” roads through taxes on gasoline and vehicle
    registration.

  • Kelly Pierce

    Thanks John for educating me about the roads and the user
    fee myth. At one time, nearly all road spending was paid for by user fees but
    no more. Congress does not want to raise taxes but it refuses to reduce road spending
    either. Now, roads are a public good like public transit.

  • Tooscrapps

    And everyone pays for them through taxes, user or not, just like City residents pay for portions of the CTA.

ALSO ON STREETSBLOG

How Can Chicagoland Fix Its Regional Transit System?

|
In the wake of the recent Metra patronage scandal, the Regional Transit Authority has come under intense scrutiny. Many journalists, elected officials and policy experts have argued that the current system of separate boards for the CTA, Metra and Pace, overseen by the RTA, lends itself to interagency competition and corruption that gets in the […]