Abstract
In this report, the research team examines both the substantial research literature on transit pricing and use and the literature on free and reduced-fare (FAR) programs. In general, we find that free and reduced-fare programs can take many forms, and the idea of “fare-free” transit is far from a one-size-fits-all proposition. Second, while reducing or eliminating fares does indeed increase ridership, all else equal, transit research has consistently found that riders tend to be more service-elastic than fare-elastic. In other words, they tend to respond more to service improvements than price reductions, which means that, at the margin, money “spent” on fare-free programs (in the form of foregone revenues) may attract fewer riders than if that money were put toward improving service. Third, the social equity dimensions of fare-free transit are many, ranging from considering the share of fare-free benefits that flow to higher-income riders to the potential racial equity benefits of reduced fare enforcement policing on transit.
