Free transport is often the short‑cut or short-term option

Enlighten • Pulse #2 • 8 min
By Ingrid Labuzan By Yves Crozet Transport economist

Germany recently made the headlines when it announced its intention to introduce free public transport in five major cities. Yves Crozet reacts with firm conviction to the project which he believes is often linked to electoral promises. In his opinion, if free transport remains an isolated measure without restrictive policies on the use of private cars, it has no impact.

We hear a lot about the subject of free transport. is it a realistic project?

In France, 36 towns have decided to propose partially or totally free public transport. As an example, Niort is the second region of more than 100,000 residents following Aubagne, to propose totally free transport. Other towns concerned are smaller, with a population of under 50,000 people. In these smaller size towns, free transport is due to practical and economic considerations. Users of public transport are not extensive and the ticket cost is low. Profit margins do not account for a large part of transport costs which are financed by taxation and private companies. In this instance, offering a free service is sometimes easier and less expensive than managing a ticketing and gating system.Users of public transport have no other choice since private car use remains the overriding motorised form of transport.

The problem occurs when we transpose the idea of free transport to large regions. In such cases it is presented as a panacea to all problems of urban mobility (pollution, congestion, mobility as a civic right…), when in reality it only makes full sense when it is part of a more global policy that aims to reduce the use of private cars by tolls, dissuasive parking costs, and restrictive measures for polluting vehicles. Without these measures, free transport is surely a popularityseeking measure.

Therefore do you consider that free transport always has a cost?

Free transport presented as “the panacea” is often a short-cut or shortterm option. How indeed can we finance the daily use and maintenance of a transport system on a not for profit basis ? In small towns, and also medium-sized ones, the networks are not large and are often based on a small circuit of bus or coach routes. They use the existing highways and are not very costly. Based on what I was able to observe during my time as mayor of a small town, local authorities often have the necessary budgets to finance a policy of free transport. The capital necessary for the functioning of a network can thus come from their budget allocations, rates and taxes or also from public borrowing. On the other hand, in largescale regions, the cost of transport networks is high, in particular for underground or tram services. These towns do not have the budgets required for financing the introduction of free transport and guaranteeing a good long-term, quality service. The economic viability of free transport therefore depends greatly on the size of the town and the extent of free pricing. We should also point out that some free transport systems are no more than a facade as in reality they are truly financed by passengers. That’s the case for example in the tourist town of Chamonix, a major French winter sports resort. The shuttles used for transporting passengers to the ski runs are free of charge, but their cost is passed on in the price of the ski lift passes.

In the long run, does free transport bring about other risks or problems?

If we are discussing free transport, we need to be honest about explaining how it will be financed. And one of the probable responses is an increase in taxation. We then have to determine the extent of the increase and where the burden falls, is it on households or businesses ? An alternative possibility would be raising local public borrowing. Both these solutions have significant consequences for regions.

Furthermore, free transport may also run the risk of public transport services being misused; greater use by some parts of the population for example to the detriment of regular passengers, with the additional risk of damage and hooliganism… It is important to consider the image free transport conjures up. Non-payment has a psychological effect, it induces an absence of value for the passenger. Providing free transport could encourage citizens to take it for granted and even to misuse the service, if we push our reasoning to the extreme. Pricing gives the passenger a sense of responsibility and gives value and credibility to public transport.

Can the impact of free transport be positive for the future of transit systems?

With free transport comes the question of financing infrastructure, particularly in large regions. Developing new networks is very expensive. If we take the example of the Ile de France region, Ile de France Mobilités (formerly STIF), borrowed 1 billion (€) a little over two years ago. In the next ten years, current projects will increase this borrowing to 9 billion (€), not including investment in the Grand-Paris-Express. How can such an amount be repaid without passing on some part of this to the passenger ?

Let me give you another example, there is a project for a new underground line out to the west of the Lyon Metropole. Research shows that such a project would require investment of several hundred million euros. In this context how can we even envisage free transpor t? It is therefore hard to imagine how we could manage without passengers’ contributions when large regions today face the challenge of maintaining, renovating and developing their transport infrastructure and services. These cities must be able to respond to passengers’ current requirements, the evolution of technology, and the growth of their populations and regions they inhabit.

In France the majority of free travel experiences have been carried out in small towns, is this also the case internationally?

Several of the cases experienced in other countries have been in large cities, occasionally on the scale of the entire city, others have been on a smaller scale. Tallinn, the capital of Estonia decided to introduce free transport across the city. They have a population of 400,000. Portland, an American city of over 600,000 inhabitants introduced a travel-free zone, only in the centre of the city. In several European, Canadian or American cities, free travel exists in some zones of the hyper-centres or serving particular areas (universities, shopping malls).

Why have some of these initiatives been abandoned?

If we take the example of Portland, free travel was restricted to a zone of 3 km² in the city centre but passengers took advantage of this and continued their journey beyond the free zone. In Tallinn on the other hand, they are continuing with the policy but it is restricted to city residents, they are only 400,000 after all. Costs are passed on in local taxes.

Could an alternative to free transport be progressive and have different pricing depending on passenger profiles?

This does already exist in some cities and represents an interesting path of investigation. Pricing differentiation is generally means-related or status-dependent (students, unemployed), based on age or number of persons in a household. The system works on the principle of reduced fares but we could also imagine a system where prices are increased for those with the highest incomes and thus support the upgrading of the transport system.

There may be other criteria that make sense, for example major tourist cities could introduce higher costs for tourists than for residents. Whatever the system envisaged, it is important in my opinion to maintain the act of validating a travel ticket so as not to devalue the service provided, even if the individual benefits from an advantageous price.

In your opinion, what would be the ideal pricing system?

As an economist, I would recommend a pricing system based on the distance travelled, as is the case in several cities such as Washington or Singapore.

During the rush-hour in the centre of Lyon, between Bellecour and Cordeliers, 25% of passengers only travel one underground station on line A. This costs them nothing as they have a travel pass. Pricing based on distance would enable us to reduce congestion on the network and encourage walking, which also has a role to play within public health. But above all, it is my strong conviction that there is no ideal transport pricing system without parallel restrictive policies in relation to car use.

Would taxing car use in the city be a solution to financing public transport?

For city councils motorised mobility has a significant monetary and environmental cost (highway maintenance, signage…). However, in France car use is practically free in towns. It is essential to create restrictions on car use, like for example, urban tolls, licencing systems, expensive parking.

This revenue could then be used to finance more efficient and less costly transport systems for passengers. All too often transport and highway policies are led independently, one could even say in a contradictory manner. Only a global approach will result in a modal shift of car drivers to shared transport.

Yves Crozet

Yves Crozet

is an economist, professor emeritus at the University of Lyon (IEP) and research fellow at the CERRE (Centre on Regulation in Europe – Brussels). From 1997 to 2007, he was director of the Laboratory of Transport Economy (LET). He is chairman of the French Road Union think tank and is a board member of the French National Highway System. He is mayor of Saint-Germain-la-Montagne in France, Loire department.

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