Free Public Transportation: The Next Frontier in Corporate Giving

Business leaders who want to expand their community service portfolio have long relied on public libraries, parks and other cultural-recreational platforms for corporate giving. Now a movement is afoot to make urban public transportation systems free of charge, and that could provide another high-profile opportunity to exercise corporate social responsibility on the broad platform of universal public benefit.

Free urban transit as an all-of-public benefit

The free urban public transit movement faces some difficult headwinds. From a corporate perspective, one obstacle is the perception of misplaced charitable giving.

The fact is that universal, free public transit would directly benefit many people who don’t need charitable giving. Urban mass transit provides a vital service for many people who can’t afford a car, but it is also a major convenience for upper-income residents and commuters, who save considerable time and expense by keeping their cars at home. 

On the other hand, public libraries and parks have set the stage for providing free transit to all. From an all-of-public perspective, free urban transit is a matter of open access to a framework that supports the whole community. Just as a city needs libraries and parks, it needs open-access transit.

Why eliminating fares for public transportation makes bottom-line sense

One factor working in favor of free mass transit is the bottom line. That may seem counter-intuitive, but on average, transit systems rely mainly on subsidies. Fares account for just a fraction of revenue, and that income is chipped away by the expense of collecting and processing those fares. 

Fare enforcement is another expense, one that can go beyond the transit agency to have an impact on any municipal budget. The decriminalization and legalization of marijuana provides a good analogy in that regard: When social costs outweigh any benefit from enforcement, it’s time to re-examine the status quo.

To the extent that race or socio-economic status influence fare enforcement, the prosecution of fare-beaters also raises profound equity issues in the criminal justice system.

The COVID-19 effect

Before the COVID-19 pandemic, free urban transit was already becoming common overseas. It was also beginning to take hold in the U.S., though just barely.

Just before the pandemic erupted in the spring of 2020, reporter Abigail Johnson Hess of CNBC took a deep dive into the free transit issue. She described how the “Zero-Fare Demonstration Project” under way for public buses in Olympia, Washington, arose from bottom-line considerations, including the loss of fare box suppliers and increased costs for plastic fare cards. Cashless apps were considered, but rejected as too expensive.

The pandemic has now prompted more cities to look into fare-free transit to help restore ridership.

Last summer, Pew Research took note of the bottom-line feasibility of free urban transit, using Kansas City’s “ZeroFareKC” program as an illustration. The city adopted fare-free rides in stages, beginning with students and veterans prior to the pandemic before moving to an all-free system.

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Critics of such fare-free systems have argued that homelessness and crime would go up and chase riders away. However, the Kansas City transit system recovered ridership more quickly than other systems on the heels of the pandemic. Additionally, Kansas City reported a 35 percent drop in public safety issues, mainly because the vast majority of incidents previously involved fare disputes.

The city also countered the prospect of unsheltered people endlessly looping rides all day by requiring all passengers to disembark at the end of a route.

Planning is everything

The ZeroFareKC program has become something of a test case for free urban transit in the U.S. As noted by Pew, the experiment appears to be an overall success, but transit planners need to be wary of pitfalls.

Making urban transit free is the easy part. Making free transit serve more people, more conveniently is the more difficult part of the equation. Rides that are overly long and complicated are not useful, even if they are free. In addition, transit needs can change as cities change and grow, requiring constant adjustments to routes and schedules.

Transit planners also need to consider the size of their workforce. Earlier this year, National Public Radio took note of driver shortages in urban transit systems. In addition to sick callouts from COVID-19, drivers are reporting burnout from dealing with passenger incidents.

How corporate leaders can get ahead of the free transit curve

Blue Cross and Blue Shield of Kansas City set the stage for corporate giving in the free transit area by partnering with the city and other transportation partners to launch ZeroFareKC.

Blue Cross and Blue Shield cited better access to healthcare and quality of life improvements as its motivation for supporting the program.

ZeroFareKC is also soliciting additional corporate support to keep the initiative afloat. From a bottom-line perspective, planners argue that the free fare system contributes to the city’s image as a world-class destination for employers. They also note that riders would spend $1 million monthly on bus fare without the free ride program. Instead, they can distribute that cash throughout the local economy.

Free transit and the parking conundrum

Of all the reasons for corporations to advocate for free transit, the issue of access to urban parking could be among the strongest. Car culture has created many opportunities, but it also ensnarls urban employers in car-centered infrastructure. On-site parking lots and garages can eat up valuable real estate, and finding space in public parking lots can be a challenge.

Employers don’t necessarily have to wait for a universal free fare program in order to encourage their employees to take mass transit. Some employers already provide incentives for their employees, and now Philadelphia’s SEPTA transit system is taking the idea a step farther by incentivizing employers.

Last March, SEPTA announced the launch of its “SEPTA Key Advantage” program with the participation of Drexel University, select Penn Medicine facilities, and Wawa convenience stores in Philadelphia.

“The benefits extend to everyone traveling in the region, not just those who use SEPTA,” Drexel explained. The school noted that the program “will help alleviate demand for parking, particularly at facilities such as hospitals where spaces are needed for patients.” 

The fare cards can help resolve part of the problem. A more holistic solution, though, would be to eliminate fares for everyone. Instead of deploying valuable law enforcement on fare disputes, municipal budgets could focus on more serious crimes and social solutions.

In addition, rail and bus service are just two elements in a much larger picture. Urban employers can also help advocate for a more expansive view of transit options by lobbying in favor of walkable planning and bike lanes, too.

Image credit: Danylo Istominov via Unsplash