Free transit: a solution for Waterloo Region?

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A new candidate , John Wolf, has officially entered the race for Regional Chair. Wolf claims that as Chair, he would try to cancel light rail, and as an alternative, investigate making transit free in an effort to boost ridership.

Last month, TriTAG investigated the claims of (as of yet unregistered) Regional Chair candidate Jay Aissa concerning the light rail project. Today, we will explore the issue of free transit and try to address two questions that arise from Wolf’s platform: is free transit a viable alternative to light rail and rapid transit, and what would the impact of free public transit be on Waterloo Region?

Is free transit a viable alternative to light rail and rapid transit?

No. Free transit may have its own merits, but it does little to address the Region’s intensification needs or the capacity concerns Grand River Transit will face in the coming years.

As part of its Growth Management Strategy, the Region needs rapid transit to encourage development along the central transit corridor and slow the pace of sprawl. Anticipation of light rail has drawn hundreds of millions of dollars of investment into the cores. Free transit would not provide the same kind of incentive to develop in core areas.

Transit ridership has also been growing rapidly, already exceeding forecasts for 2016. As ridership grows, and parts of the central corridor see as many as 48 buses per hour, conventional buses have begun facing limitations. Buses can only hold around 50-60 people, and when these become full, people get left behind to wait for the next bus. More buses may be added to routes to meet passenger demand, but we’re quickly approaching the limits of what we can add. When there are too many buses on the road, they tend to bunch up, snarling up traffic and leading to significant delays in following their routes.

Light rail as a transit technology addresses these capacity concerns. Light rail vehicles can hold over 200 people (or 400 doubled-up). Since the trains will run in their own separate lanes, they won’t get slowed down by cars or other buses, nor will they interfere with traffic. Making buses free on the other hand, doesn’t do anything to improve the capacity of transit vehicles or the free movement of buses and traffic.

In fact, if free transit is successful in Wolf’s stated aim of increasing ridership, then the need to increase the capacity of the Region’s core routes becomes all the more urgent. Buses would become overcrowded, as would our roads with frequent “bus jams.” Consequently, free transit has the potential to escalate our need for light rail.

What would the impact of free public transit be on Waterloo Region?

If we assume that GRT maintains the exact same level of service after making fares free as before, TriTAG estimates the average annual property tax bill would need to increase by about $150. (For comparison, this is 4-5 times last year’s property tax increase.) If ridership were to increase and service levels had to also increase to keep pace with demand (more on that in a moment), even greater tax increases would be required.

Wolf expects that free transit would increase ridership. To evaluate this claim, we can look at cases both locally and globally.

In 2013, the Estonian capital of Tallinn made its transit network free to residents. The city is the largest thus far to attempt free  public transit, with a population of 430,000, which is smaller than, but still comparable to Waterloo’s. Unfortunately, the ridership increase attributed to the gratuity was estimated at a meagre 1.2%. It remains popular despite not appearing to have had a significant impact on traffic.

(Several smaller European cities have also introduced free public transit, with greater success. However, the smaller size of these municipalities make them more difficult to compare with Waterloo Region.)

A recent study of employees in Washington D.C. investigated the impacts of commuter benefits such as free parking or free transit passes. The study found that if an employer provided free parking, it resulted in reduced transit usage from no commuter benefits, even if free transit was also offered. This suggests that the costs and difficulty of driving may have a greater impact on transit ridership than the cost of transit itself.

Locally, we can consider the impact of providing all University of Waterloo and Wilfrid Laurier students with bus passes. (While not strictly ‘free’, the inclusion of a bus pass with tuition means that every full-time student has unlimited access to transit.) It’s undeniable that since UWaterloo adopted the pass in 2007, student and young adult transit ridership has grown considerably. U-Pass use accounted for 30% of GRT passenger trips in 2013, up from 23% in 2010.

However it’s difficult to say for certain how much of these increases are the direct result of students having ‘free’ transit, and not the improvements in service that the Region has implemented using revenues from the program. Furthermore, the uptake in ridership follows demographic trends which suggest young people are likely to drive less and take transit more than previous generations did.

Finally, what about the social impacts? Would free transit bring greater benefits to those who need the most help paying for transportation? In Tallinn, one district with high unemployment saw a 10% ridership increase, suggesting this is possible.

Our guess though is that the impact here would be modest at best: the Region already provides free transit tickets as part of certain social programs and Out of the Cold, and offers a reduced price monthly pass to those on social assistance. While free transit would certainly provide further assistance, those that would benefit the most from the gratuity would be those who can already afford to pay their fares. It may be worth discussing whether our current subsidies are sufficient for those who need them the most, but targeted subsidies are a much more cost-effective way to address social equity.

None of this is to say a public debate over free transit isn’t worthwhile, it’s just important that we fully understand the limitations and trade-offs as we do so. It’s certainly no replacement for light rail.

4 thoughts on “Free transit: a solution for Waterloo Region?”

  1. From the Tallinn study:

    “The results indicate that the [free-fare public transport] measure accounts for an increase of 1.2% in passenger demand with the remaining increase attributed to extensions made in the network of public transport priority lanes and increased service frequency.”

    In other words, Tallinn’s ridership is affected more by the improved quality of the service and the introduction of dedicated space for transit than the fact that the fare is free.

    GRT’s ridership has been increasing remarkably over the last decade, and that has come from service improvements. I think it’s safe to assume the introduction of ION and the continued implementation of iXpress will demonstrate a strong positive effect on ridership.

  2. If you’re interested in how we arrived at our estimate of the cost of free transit, read on.

    The regional budget estimate passenger revenues for 2014 in the amount of $31.8 million (source, page 181). We assumed that because free transit would be free for all users (current cash and pass customers, U-PASS holders, and so on), this amount would drop to 0.

    On the same page, the “Net Levy” for public transit for 2014 is budgeted at $42.8M, with an “average household impact” of $203 per year. We used this to estimate the impact of an additional $31.8M being added to that Net Levy:

    $31,836,202 / $42,821,823 * 203 = $150.92

    This number is based on an “average home” assessed at $291,500, a value that was used throughout the 2014 budget. It doesn’t account for any changes to transit service level. It also doesn’t account for any operational savings from not having to inspect and charge for transit. If you would like to help us improve this estimate, please contact us here or directly.

  3. I used public transit as a student at UW. It was perfect for when I only went between my apartment, university, and the mall. After I left Waterloo, I lived in Toronto, Ottawa, and Montreal, using public transit daily. When I moved back here, I was fully ready to continue using public transit, but the buses weren’t a practical option. Trying to get from RIM to the mall to my apartment took me 3 hours one night. Making transit free won’t change my decision – only new and faster routes.

  4. I am a UW student so it is “free” for me to take the GRT (i.e. the marginal cost per trip is 0). But I hardly ever take the bus, mostly due to the relatively poor service frequencies. I am not willing to risk standing on the curb for up to 30 minutes waiting the bus when most trips I take are less than 10 min by bicycle.

    Speed is also a more significant factor in my travel choice, especially for commuting.

    The options for my commute are as follows, noting their marginal costs:
    Bicycle: 8 min – very cheap (vehicle wear)
    Drive: 12 min – very expensive (vehicle wear, insurance, fuel,parking)
    Bus: 18 min – free
    Walk: 20 min – free (maybe shoe wear?)

    Even though cycling is more expensive than riding the bus, it is far more attractive to me due to its speed and flexibility. I suspect that if students had the financial resources to drive, or if there were attractive cycling infrastructure, they would abandon the bus despite it being free.

    The primary factor that deters people from taking transit in Waterloo is the quality of service, not the cost.

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