Public transportation

Has D.C. Found the Right Way To Do 'Free' Public Transit?

Councilmember Charles Allen has proposed giving every D.C. resident a $100 monthly subsidy for bus and train rides.

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The trains and buses might not be on time, but the movement for free public transit keeps on rolling.

On Sunday, Washington D.C. City Councilmember Charles Allen announced his intention to introduce new legislation that would provide every District resident, regardless of income, with a $100 monthly stipend they could spend on public buses and trains.

Residents would have to sign up each year for the $100 benefit. Any money they don't use in a given month would be recycled back into the pool of available funds. Allen's proposal would also create a new fund to improve bus service in D.C.'s lower-income neighborhoods.

The program would cost between $50 million and $150 million a year. The final figure would be dependent on what kind of bulk discount on fares the city might be able to negotiate with the Washington Metropolitan Area Transportation Authority (WMATA), says Allen. He says that the program will be funded by excess tax revenue the city expects to collect, and therefore will not necessitate tax increases or service cuts.

Allen's proposal is different from a lot of other free transit proposals that have been proposed or passed in other U.S. cities. Those, like the program implemented in Kansas City, Missouri, in January, simply make riding public transit fully free.

The D.C. proposal, which the Washington Post reports has the backing of seven of 13 city councilmembers, would instead function more like a universal transit voucher. That's a major improvement over other programs.

For starters, it wouldn't blow a hole in WMATA's budget. Other free transit proposals that just abolish fares leave transit agencies themselves scrambling to make up the money they would have gotten from riders.

So long as these agencies are covering some of their operating costs, they should keep doing so, Baruch Feigenbaum, a transportation policy expert with the Reason Foundation (which publishes this website), said back in December.

"Whether it's 20 percent of the recovery rate or 40 percent of the recovery rate, it's a lot better than zero percent of the recovery rate," he said. "From a fiscal perspective, you should do it just because you need the funding."

By giving a subsidy to the rider, and not WMATA, Allen's bill also maintains the agency's incentive to retain and grow ridership.

"By providing a subsidy to residents, there's a market-based incentive for WMATA to earn riders. If service isn't reliable, safe, and predictable, people with options won't change their transit habits," reads a summary of Allen's proposal tweeted out by NBC reporter Adam Tuss. In contrast, if a transit agency's revenue is totally disconnected from ridership, riders become just another cost to bear.

There are still a number of problems with Allen's transit voucher idea. For starters, it's a universal benefit, meaning that even the wealthiest D.C. residents could take advantage of it. This is deliberately done to encourage ridership across all income groups. "We don't want to 'other' our public transit. It's for everyone and a shared public good," reads a summary of the legislation.

I don't quite understand how not giving a transit voucher to someone making $200,000 a year will make that person "other" public transit more than they already do, in the same way that I don't imagine giving only low-income people food stamps encourages the othering of grocery stores.

As Allen already acknowledges, wealthier commuters' decision to take transit has less to do with the price of a trip and more to do with the level of service being offered. Rather than give the least price-sensitive commuters a voucher, why not just take that money and spend it on more service improvements?

According to a 2019 survey from TransitCenter, riders—including low-income riders—prioritize service improvements over fare cuts.

The argument that the program is already paid for by excess tax revenue might be technically true but is still misleading. If the D.C. government is collecting more money than it needs for current levels of spending, the best thing to would be to undo recent tax hikes. We can then have a discussion about whether taxes should be raised to pay for additional benefits.

Allen's proposal has not been officially introduced, and will surely change as it works its way through the city council. It's better in design than many other free transit policies being proposed in other cities. It would nevertheless see a lot of tax dollars being spent on wealthy riders who don't need a subsidy to get to work.

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  1. Allen’s proposal has not been officially introduced, and will surely change as it works its way through the city council.

    I certainly hope so! At a minimum, each free $100 ride card needs to come with a stern warning printed on them that they are definitely not to be traded at the shady corner liquor store for a pint of vodka and three packs of smokes or 20 dollars cash.

    1. First the fact that every resident get a $100 pass will decrease value in the secondary market. Say the $100 pass covers 80% of my rides, how much would a pay on the secondary market for a card. Secondly if the amount of this is small who cares, think like a business. Businesses have loses, but if the programs working and the loses are small you accept them. Think MasterCard is going to close up because some cards are stolen.

  2. The effect of free ridership should be readily apparent to any kid with a lemonade stand: the best way to slow losses is to reduce service through shorter hours, less lemonade per serving, or surly customer service.

    The authors real colors show when there is the handwringing over giving something of value, vouchers, to people with money.
    It works in St. Louis, but via private enterprise. Many large employers provide vouchers to their employees for public transit. Their value is a pittance of my income, but the effect of free on my behavior and willingness to use a service is real. This despite inherent inconvenience (wait times from trains/busses), dirty and smelly environments, with a chance of random violence against me. Then I and others who would not otherwise know of or care about the condition of public transit actually do complain to the Metro system. Like it or not, people who know other people that actually run things in the community are more likely to get things changed, and all people who use the Metro benefit.

    1. Wait, you’re telling me that you use public transit because you get a voucher? Rather than just driving? Is your time so unvaluable?

      1. My time is valuable. I can read the morning paper on my bus commute, something I could not do driving.

  3. Kinda funny that this is preferable to just stop charging fees. With buses, the usual argument for free bus rides is to speed up service: get rid of fumbling for change, get rid of squabbles over whether a transfer is still valid, get rid of the people sneaking in the back doors who block people trying to get off. I haven’t ridden a city bus in a long time, so maybe some of these have been alleviated by swipe cards of some sort, but I doubt all.

    Running buses is another one of those things where the case for government funding is distinct from the case for government running.

    1. Not only that, but fare collection has costs.

  4. Of course, this only applies to residents of D.C., so the folks who commute from Virginia and Maryland will be supporting D.C.’s “free” riders. Also, if the city is taking in so much excess tax, how about lowering the tax rates?

  5. No. Of course they haven’t.

  6. Has D.C. Found the Right Way To Do ‘Free’ Public Transit Anything?

    Um, no.

  7. IF the government provides any benefits, they should all be in the form of vouchers to avoid interfering with the market.

    1. So that means vouchers to drive cars on public roads?

      1. It’s called your registration papers.

        1. No it’s not you idiot. Vouchers means rationing the miles you drive or the number of times you get on the road.

      2. No, that means no public roads.

        1. So what planet are you on where roads are private? The only place I can think of is in the middle of a huge logging area where there are no roads – and no people – and no activity in winter/mud months.

  8. Is this the kill Uber plan?

    1. No.
      Uber still comes when you want, where you want, and takes you to your destination, not the nearest-within-a-couple-miles-place you don’t want to be.

      1. And at times you don’t want.

        I remember taking public transit as a lad. It could take two hours to cross the city and you had to catch the bus at specific times – and you were out of luck overnight. 15 minute trip in a car, ready to go when you were.

  9. would instead function more like a universal transit voucher. That’s a major improvement over other programs.

    For starters, it wouldn’t blow a hole in WMATA’s budget. Other free transit proposals that just abolish fares leave transit agencies themselves scrambling to make up the money they would have gotten from riders.

    The voucher thing completely misses the point – and is at core corrupt – so will fail. The original point of changing the public transport model in Estonia (the first to head down that road) was to blow up the existing muni systems and have the existing land value tax go to munis rather than national. At the national level, the LVT was just used for roads. At the muni level, that ‘roads solution’ then becomes a traffic/congestion problem. Change muni transit to more of a fixed-cost system than a variable-cost system (like ‘free’ libraries or ‘free’ parks) and it is much easier to match those tax revenues to transit costs. Reducing the variable-cost elements also should reduce the rent-seeking of public transport unions.

    I don’t think Estonia has gone to the next – more libertarian – step re public transit. Which is for the free muni-operated routes to focus on the core mass-move routes (spoke to spoke) – and to lease loading/unloading slots at those spokes to smaller private options that can then schedule ‘last-mile’/shuttle type stuff.

    But neither the KC or DC model is doing anything more than trying to shuffle money around within an existing public transport agency. Rather than actually rethinking the entire transport issue re both roads and public transport.

  10. Has D.C. Found the Right Way To Do ‘Free’ Public Transit?

    DC transit makes a loss. Massive losses. Its heavily subsidized – like all public transit in the US. That, by definition, means that its existence destroys wealth – even if it betters the lives of some people, it is making other’s worse.

    So giving vouchers will just increase the amount of money that is thrown down that pit.

    There is no reason why public transit should be free. There is no reason why riders should not bear the full costs of operation.

  11. Why is there “excess tax revenue” in the first place?

    1. Because democrats are doing the math.

  12. “For starters, it’s a universal benefit, meaning that even the wealthiest D.C. residents could take advantage of it.”

    Part of the advantage would be that there’s no need for means testing and hence no bureaucracy needed to means-test. Same reason behind UBI being “universal” basic income.

    1. Its also a nice in to really raise progressive taxes in D.C. and rates on out of D.C. commuters when the system really starts the death spiral in NYC fashion.

  13. “……with a $100 monthly stipend they could spend on public buses and trains, or trade for crack.”

  14. So the users and the payers of the service are not the same? Wow anyone with a basic understanding of economics knows where this is going fast..the Metro will raise their prices and increase their bureaucracy so fast….just like healthcare and universities…

    This is idiotic…the Metro should be privatized and run based on route marginal profit…

    Again if any libertarian thinks this is a good idea they need to go to the Mises Institute for a severe lesson in basic microeconomics

  15. There is no “right way” to do free public transit. This way (like all ways) just spreads the inevitable and inescapable high cost of public transit over a broader group of taxpayers who don’t benefit from it.

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