Wednesday, February 25, 2009

Is There Such Thing as a Free Way?

Posted nearly side-by-side today on Planetizen's news feed are two articles which should be read as parts of the same story.

Why Is Fare-Free Transit The Exception Rather Than The Rule? explores the thoughts that go into transit planners' decisions to charge fares for their service. Congressman Revives Effort to Ban Freeway Tolls discusses the efforts of Pennsylvania Republican Glenn Thompson to make sure nobody is ever charged to use the Interstate freeways.

Freeways and public transit systems are both pieces of transportation infrastructure, which we depend on for our economic vitality
The Interstate Highway System -- the greatest public works project in history -- was built with federal funding to unite our nation. The Interstate Highway System's profound effect upon the American economy has contributed significantly to development and improved quality of life through increased economic efficiency and productivity. The Keeping Americas Freeways Free Act will preserve this notion and allow for the free flowing of commerce not only in Pennsylvania, but across the nation. -Glenn Thompson
And that statement is just as true if you replace "Interstate Highway" with "Municipal Railway." But we don't think that way, and Dave Olsen argues that it's to our detriment.
Now given that public transit is a public service, it could make sense to maximize the public good that that service brings, which is exactly what Island Transit and other Fare-Free systems have done. However, I'm writing "could" here because in the mad rush to privatize and maximize profit for anything that moves (including public services) this playing field has been fundamentally altered over the past few decades. -Dave Olsen
Transit operators have been asked to meet two goals: to locate revenue sources and to increase ridership. But increasing fares pits one of these goals against the other, often at the expense of both. Raising fare rates drives down ridership, thereby offsetting any potential revenue increase. What's more, the costs of collecting fares often approach or exceed the revenue they bring in.

No transit agency can run on fare revenue alone, and fare increases are a bad option for financially pinched transit operator. What fares and tolls do well, however, is suppress the demand for the transit service. Normally that's not something you'd want to encourage, but it can be a useful tool.

Congestion pricing on roads, higher bridge tolls at peak commute hours, and even variable fares for transit during peak commute hours can make a transportation network run more efficiently. Progressive funding strategies for New York's transit network include higher subway costs during commute hours to keep the system's capacity from being overwhelmed, but off-peak rates would go down to zero.

Here in SF, a study of the cost per revenue of Muni's fare collection pretty much killed any hopes of our largest transit agency going fare-free. Unlike most agencies, Muni collects significantly more in farebox revenue ($112 Million) than it spends on collection ($8.4 Million). Personally I wonder whether the latter number includes fare enforcement, but I doubt those inspectors cost $100 million per year.

But most of the argument provoked by that study revolved around the increased costs to Muni for the extra service it would have to provide. Which raises the question, shouldn't providing more service be a priority for Muni? I understand Nat Ford and the folks at the MTA lack the luxury of making that decision themselves - they're hamstrung by the hurdles that we in California have to go through to raise new revenues in this state. But maybe we're all too resigned to the status quo.

It's time for policy makers to get behind a real initiative to increase transit ridership and service levels. Yes, that will mean raising money. And yes, some of that should come from those who use the system at its peak load times. But we need to stop pitting the goal of raising revenue against the goal of increased ridership.

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