The economics of free buses

By Felix Salmon
August 11, 2009
Dan Ariely wonders how the New York bus system could cope with the extra demand created by making crosstown buses free. (Actually, he does more than wonder: he simply asserts that it couldn't.) But Charles Komanoff has already run the numbers, and as far as anybody knows, they do work.

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Dan Ariely wonders how the New York bus system could cope with the extra demand created by making crosstown buses free. (Actually, he does more than wonder: he simply asserts that it couldn’t.) But Charles Komanoff has already run the numbers, and as far as anybody knows, they do add up.

Comments
5 comments so far

According to this paper (pdf file) free fares are a bad idea because they attract undesirable riders:

Based upon the findings of this synthesis, it is concluded that a fare-free policy might be appropriate for smaller transit systems in certain communities, but is ill-advised for larger transit systems in major urban areas because experience shows that in larger systems, a tremendous amount of criminal activity, as well as a sharp increase in ridership, caused higher maintenance costs, labor costs, and operational costs and drove away existing riders.

Over here in the Bay Area they tried the same thing. It was called “Spare the Air”. Genius!–as long as you ignore the overcrowding and overwhelming stench of homeless people taking up entire rows of seats to nap during rush hour. Other than that, it’s all gravy. Kudos to you, New York.

Posted by ardyan | Report as abusive

Nothing is ever free, has to have an end cost somewhere. But Felix is more inclined that paying for bus use is evil, and the pig capitalist that charge for bus use should be shamed.

Posted by Dogma | Report as abusive

When I was in school, Austin figured out it was cheaper to make the buses free than to spend money to advertising the bus service. It was a great deal in a congested city.

Posted by Brad Ford | Report as abusive

According to the link I gave above the Austin experiment didn’t work out:

A medium-sized transit system that experimented with total fare-free service was Austin, Texas. The experiment ran from October 1989 to December 1990. Ridership increased 75 percent during the experiment, but expanded service accounts for some of this percentage (5), and the People for Modern Transit (PMT) technical Committee (29) claims that once the ridership increase is adjusted for normal growth and addition of University of Texas student passengers, the initial jump really only amounted to a 10 percent increase. This experiment was regarded as both successful in terms of increasing ridership and disastrous in terms of attracting problem riders who drive away quality ridership and caused system losses due to criminal activity (29). In response, 75 percent of transit drivers petitioned to have the farefree program discontinued immediately, due to the abuse they were experiencing at the hands of problem riders (20).

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