The Politics of Transit Fares

This is a reaction to Oh the Urbanity’s video about transit fares, https://youtu.be/0L4g8AbfLTM. I think it’s the best pro-fare piece I have seen. I broadly agree that given political constraints, transit agencies have no choice but to collect fares. So why disagree so strongly otherwise?

Because the war on cars is about gaining and using political power. To a first approximation we know all the technocratic answers, anti-car advocates need to go further.

I do appreciate this video being the first pro-fare argument I recall acknowledging that transit can be more expensive than driving. That's a sign of good faith.

I’m writing from an American perspective. Which is largely similar to the Canadian perspective, and largely different from other countries with better transit. I’ll note differences as appropriate. I would suggest that people making arguments about transit funding while ignoring the circumstances of the locality are making a mistake, and the video contains a clear example of that.

Again, it’s a good video, a steelman case for fares.

Here’s what the video says about cases where transit fares can exceed the costs of driving:

The cost of fares versus driving is acknowledged but basically brushed aside as insignificant. Although, again, credit for acknowledging that marginal costs exists, as opposed to people who look at the total cost of ownership of a car and think that means each extra trip is more expensive than transit fare. This is really key for understanding the politics of both existing low income transit riders who do find fare to be a burden, and the difficulty fares present for inducing mode shifting. So it’s important to establish. Most households in America do already own a car, and we’re never going to get them to go car-free if we can’t get them to ride transit in the mean time. Many people do take trips in groups, especially families who have been systematically pushed out of American cities and into car dependent sprawl. We’re absolutely never going to get them to go car-free if we can’t get those kids in the habit of riding transit. Solving for these two cases, of appealing to choice riders who have access to a car or are traveling in a group, is really important for getting cars out of cities.

Transit passes are cheaper than owning and operating a car. But looking at the total cost of ownership of a car is irrelevant until transit gets so much better that people can go car free. Until then, mode shifting means getting choice drivers onto transit. Making as many trips as possible better on transit than driving. That means both making transit service better and also making transit cheaper per trip than driving.

Also, transit passes evade the problem. Is it important for passengers to pay to sustain the system? Then the worst thing to do would be passes with zero marginal cost for regular riders disproportionately likely to ride at peak times during work commutes. I think cities should respond to excess crowds on transit by building more transit. But from the perspective of people arguing that fares are needed to cover operational costs overall, there is a tension about also highlighting passes as a way to avoid costs for riders most likely to contribute to peak crowds. As the video explains at 5:45, higher fares disproportionately reduce riding at off peak times. Unmentioned, but almost certainly part of the explanation is that riders at peak times are disproportionately regular users who have passes, ie are indifferent to fare costs per trip.

Passes are really convenient for somebody with steady work who commutes to work every day, but cities have other people. That focus on the idealized transit user is a bias among many transit professionals with email jobs, often without childcare responsibilities. Some people taking transit to low wage service jobs are underbanked or have irregular hours, and I often see them pay in cash. Other riders are not going to work at all. Transit should not exist solely as a way to get people to work! Designing cities just for work but not for families, not for a variety of life stages, not for leisure, leads to car dependent sprawl.

The video’s comparisons of countries with good transit systems that use fares ignores the cost discrepancy between driving and transit facing riders in each system. The fare v free transit discussion does depend on alternatives. In some countries that tradeoff is different due to marginal costs per trip, like higher gas taxes or prevalence of paid parking. Or implicit restrictions on car ownership, like higher sales taxes or the requirement to have off-street parking before getting a car, limit how many people can have the choice to drive. Better testing and licensing also restrict who has the choice to drive. In America where everybody is expected to have a license and taxes are low, it’s harder for transit to compete.

As the video notes, many drivers who could choose transit care more about the speed advantage of driving, versus the cost savings of driving. But speed and cost are related! Manhattan has excellent transit, relative to the rest of America, and also extremely slow buses due to drivers. Improving bus service also depends on making driving more financially expensive in transit footprints so fewer people choose to drive and cause traffic. It harms service for driving to be cheaper than transit, and fares have that effect.

Relying on fares makes transit pro-cyclical. The example in the video is that COVID, among other harms, reduced transit ridership and thus fare revenue and thus transit service. The video does not seem to do much analysis about that aspect of fares. There is a mention of at least one other country with more stable revenue from taxes. But clearly pro-cyclical public service funding is bad! Transit service should not decline when people are otherwise struggling! Even from a technocratic perspective this is a strong reason to make sure operations are not funded from fares.

Means testing is an option, like the video mentions discounted or free fares for low income riders. But this is bad for all the typical reasons that means testing is worse than universal programs: cost to administer, paperwork burden is a hassle for people who most need the help often letting them fall through the cracks, criteria will never be perfect, etc. But it also contradicts the nominal point that fares are a necessary funding source. If we can use general revenues for operational expenses (of some riders) then it’s clearly a political decision about expanding it to all riders. Progressive income taxes are kinda the best thing we have going, with higher income earners paying a higher percentage from a larger income and people with no income paying no income tax at all. Clearly using income taxes to fund sidewalks is better than charging people a fee per walk or a monthly fee for sidewalk access. Using income taxes to cover transit costs would likewise be superior than these bespoke means testing programs.

The video mentions how some free fare proponents come from anti-poverty or environmental perspectives but lack a knowledge of transit systems, and that's fine to note. Outside of the video but to the extent that free fares are topical because of Mamdani’s election, that is precisely backwards. Mamdani did not get appointed to technocratically run transit. He ran for office in a democracy on a platform that included fast and free buses and voters picked him. Transit professionals should ask themselves, if their alternatives are so much better, why no winning politician pitched them. Or why, maybe, voters do not believe they’ll be delivered. Politically it would be a disaster for transit if Mamdani abandoned his iconic promise, for the sake of transit construction that could be cancelled by the next mayor before anybody benefited. Building trust with the electorate is important in a democracy, deal with it.

The concept of trust is relevant to 12:12 in the video, that says free fares make sense if it is “politically and financially feasible to combine the introduction of free transit with a big service boost”. But that’s backwards. Riders getting bad service today should not pay more than riders getting hypothetically getting good service tomorrow. As I wrote,

Now, maybe it's a chicken and egg situation for a transit agency if better service that would be worth higher fares, can only be provided using extra revenue from higher fares. But politically, for a city or larger government that objection doesn’t work for two reasons. First, if the government fails to deliver improved service, the cost of a failed project should hit general budgets and not be imposed on transit riders. Second, if bus service is slow because of traffic, that's not a transit agency problem. If the rest of the government allows buses to use roads without being blocked by car traffic, by raising costs on drivers, then the government can collect transit fares for the improved service without making transit more expensive than driving. I am not being ironic at all with this suggestion. It would be better, although I acknowledge it is not realistic. Outside the scope of the video, but to the extent transit riders with a free service have historically objected to fares in exchange for better transit service, that’s evidence that fares are a significant burden to them and politicians are right to acknowledge it.

The comparison to other service fees (healthcare, childcare) are valid, and good for Canada, but misses the context of transit competing with more subsidized driving.

This video does not mention it, but some pro fare advocates will admit it's about excluding people who have nowhere else to go, i.e., homeless people who make other transit riders uncomfortable. Which I disagree with but it does help when people admit true goals so they can be discussed directly. First, I don't really buy it. I've seen libraries take steps to acknowledge the problem and handle that balance between intended patrons and people who have nowhere else to go, without imposing entrance fees. Also I think this complaint to a large extent is actually about an insufficient quantity of transit riders from higher socio-economic status, the eyes on the street of urbanism. But excluding poorer people will not automatically make richer people come. Those are largely separate problems.
But maybe I’m wrong. A transit agency could use fares for this reason . For a city it's nonsensical, because those people still exist even if they avoid transit. On a broader scale, the same political dynamics of car dependency in America that keep subsidizing drivers while refusing to provide adequate transit are the same ones causing housing scarcity, withholding funding for healthcare and welfare programs, etc. That doesn't mean we have to solve them all at the same time, it’s okay to fix transit ASAP. But we can at least acknowledge these things are all bad. We can acknowledge that one of the bad things about car culture is that it lets wealthy drivers go door to door through a city and ignore the economic inequality generated by the system they're winning. It's impossible for transit, where riders will still walk on the sidewalk from time to time, to ever provide as sanitized an experience as driving. It sets transit up to fail to pretend otherwise. Better to lay the blame on the political actors responsible.

There's a difference between calling for a transit agency to cut fares at the cost of operational budgets (which I am not doing) and making a broader policy case that fares are bad. Our world is full of necessary evils. Even if fares are a mild one, it’s better to acknowledge the downsides objectively. Acknowledging that makes it clear that if a politician goes and finds outside revenue to reduce fares, that’s good actually. A billion dollars of lost fare revenue for transit is a billion dollars of extra wealth for transit riders. One component of fares being bad is it implicitly means tracking of human beings who ride transit. One advantage of acknowledging that specifically is contrasting the hypocrisy of drivers who don’t care to raise taxes to adequately fund transit, while they whine about their cars being tracked as they drive dangerously or commit hit and runs.