“Study the past if you want to predict the future”, these words of the Chinese philosopher, Confucius, were pronounced some twenty-two centuries before the appearance of the appearance of what we could call the first collective transport system in history: the first bus that travelled through the streets of Paris in 1662. It was the work of the French scientist, physicist, philosopher, and mathematician Blaise Pascal. Pascal left us countless contributions on the theory of probability, fluids and even the first mechanical calculator, but perhaps few people know that he was responsible for the world’s first urban public transport company.
The service was operated by horse-drawn carriages with a fixed route, frequency, and fare (5 soles). The carriages had eight seats and departed every seven and a half minutes. The service was initially very popular, so much so that the parliamentarians in Paris wanted to assert their privileges by depriving the lower classes of access to the service. This shook the financial balance of the company, which was forced to raise the fare to 6 soles because of the reduction in passengers and made the service more unpopular. All this led to the failure of the service and, with it, the first collective transport system in history. It was perhaps also the first example of public transport fare intervention with interests that had little to do with the improvement and accessibility of the system.
Today, almost five centuries after the end of the five-sun carriages, the COVID-19 crisis has shown that drastic changes in transport patterns and services are possible. We have seen how, overnight, a percentage of workers performed their daily duties at a location other than their workplace and the journey from their place of residence to the workplace was cancelled. In this context, a public policy related to transport has burst onto the scene: free public transport.
Free public transport is not a recent development. It emerged in the United States in the 1970s and has since spread to all five continents, reaching its peak in post-COVID times. Public representatives try to curry favour with citizens in a scenario of inflation and soaring energy prices, citing social equity and the fight against polluting emissions as the main reasons for the measure.
In Europe, the first European capital to introduce free public transport was Talinn in Estonia. Citizens have been able to use public transport free of charge since 2013. In 2022, the Estonian government’s own evaluation of this policy was made public, and here was the surprise: it had generated many additional trips by public transport, but, on the other hand, it had not managed to reduce the number of old people in cars (even after tripling the price of public parking). The same thing happened in Santiago de Chile. And let me stop in Santiago. If there is a city where transport is planned and we could even say that it is the world cradle of Transport Engineering, it is Santiago de Chile, with the Secretariat of Transport Planning (Sectra) and the Department of Transport and Logistics Engineering of the Catholic University of Chile at the head. Both institutions are world references in the scientific field of Transport Engineering. In this city, the researchers of this department, Owen Martín Bull and Juan Carlos Muñoz, demonstrated that free travel had generated trips mainly for leisure purposes and on non-working days, with no significant impact on car use. The experiment had consisted of analysing the behaviour of a group of people who had been provided with a free pass compared to another group without a free pass. The research also showed that public transport generated more trips during off-peak periods. Basically, journeys that did not occur in the early morning or in the evening to coincide with the return to work and school.
These days we see public transport advocates claiming that the measure has increased journeys, but the harsh reality is that to date we have no rigorous study to support the claim that they come from journeys that were previously made in private vehicles. On the contrary, studies are accumulating that suggest that these new trips come from other public or private modes such as cycling or pedestrian or are simply new trips generated. Indeed, whenever transport engineers survey public transport users, the cost of the ticket is never the main complaint, the quality of the service (accessibility, frequency, and journey time) being the subject of these complaints. That said, of course the fare does influence the demand for public transport, but more and more public transport advocacy organisations are beginning to openly oppose this measure, such as the Transit Center in the United States, a non-profit organisation that concludes that even low-income users prefer a more frequent and reliable service to a policy of fare reduction. Reduced, not free.
As this is an economic measure, we need to know how public transport systems are financed. The financing of public transport is based on two main sources: fares and public funding (and third-party resources in the case of concessions). It should also be noted that practically all public transport systems do not cover their operating costs with fares, and public resources become an essential source of funding. Thus, the reduction or elimination of fares makes it necessary to immediately increase public resources. In other words, we must be cautious with the measures to be implemented as we could compromise the viability of the transport system itself.
Continuing with the fare system, let us see whether the empirical results we saw earlier, and which are repeated all over the world could have been foreseen. To do so, let me briefly explain the mathematical concept of elasticity. It is nothing more than the variation of one factor, in this case, public transport users, as a function of another, in our case, the cost of the ticket. Simplifying a lot and, although it is a value that is replicated all over the world, we could say that the price elasticity of the public transport fare is -0.3. That if we increase the fare by 10%, we do not lose 10% but 3%. In other words, it is an inelastic demand. But we do see differences depending on the period of the day, with the elasticity increasing outside the peak period. This makes perfect sense, since outside this period trips are no longer “forced”, mainly work and studies. This means that a fare increase or reduction generates higher losses and gains of passengers in these periods. They are more price-sensitive trips, we could say.
In addition, the short-term elasticities (first year) are higher than the long-term elasticities, hence the problems of congestion of services at peak hours that we are seeing. This fact, together with the generation of new “non-compulsory” trips in off-peak periods that free travel is causing, could increasingly affect and require more investment to maintain service capacity (this type of travel had already increased due to the explosion of teleworking). If governments around the world were well advised, they should know that when they make 100% fare reductions, they are causing an increase in travel, especially new off-peak trips unrelated to income levels, while keeping the level of private vehicles largely unchanged.
Finally, if we look at the relationship between free public transport and environmental sustainability, the second great argument in favour of the measure. First, we must not forget the commitment to climate neutrality that the European Union has established for the 2050 horizon, with a target of 55% by 2030. Moreover, given that 40% of all road transport in the EU takes place in urban areas, urban mobility has a key role to play. It is essential to plan an integrated policy that combines environmental and social sustainability with an efficient and attractive public transport network for citizens. If emissions in the transport sector are to be reduced by 90% and free public transport does not have an impact on the reduction of trips in private vehicles, this does not seem to be a policy that is in line with this objective. On the contrary, it seems more logical to implement a comprehensive modal strategy that increases the costs of private vehicles and improves public transport networks, without preventing us from favouring more inclusive fares for specific groups, rather than generalising free public transport.
In conclusion, public transport fare policy should be based on achieving equitable access (social and affordable fares, complemented by specific income-related measures) and a more balanced modal split between public transport and private vehicles. The strategy must inevitably involve planning public transport networks that are attractive in terms of supply, travel time, frequency, and quality, in line with climate commitments, making public transport more attractive than the car. This would avoid decisions reminiscent of those taken by French parliamentarians in the 17th century, which ultimately led to the end of the “five sols carriages”.
Jorge Rodriguez | Technical Director
References:
[1] https://www.sciencedirect.com/science/article/abs/pii/S016604622030301X
[2] European Passenger Federation, 2018. Free public passenger transport: an appealing but useless idea with underestimated perverse effects.
[3] https://transitcenter.org/should-transit-be-free-part-two/
[4] Elasticidades de la Demanda del Transporte Público Urbano: Síntesis e Interrelaciones. Antonio Gschwender y Sergio R. Jara-Díaz Universidad de Chile, Dpto. de Ingeniería Civil.
