What Happens When Public Transit Becomes Free?...

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Have you heard that in Tallinn, Estonia, public transportation is free for residents? Not only has it been free since 2013, but it also works great. According to The Economist, “The buses are on time, the trams are shiny and new, and passengers usually get a seat.” And that’s not all. Far from draining city finances – go figure – the city is turning a profit. Allan Alaküla, the Head of Tallinn’s EU office, says, “There’s no doubt that we not only cover the costs, but also come out with a surplus. We earned double as much as we have lost since introducing free public transport.”

Tallinn is a tech hub with a reputation for innovation, so perhaps its free public transit experiment isn’t surprising. But who knew that by 2016, Tallinn could declare a profit of €20 million a year?

This is how it works: As long as you are registered as a resident of the city, if you buy something called a “green card” for €2, you can ride the city’s entire network of trams, buses and trains at no cost. Visitors still need to pay to ride the system. Single-ride paper tickets are €2 and electronic QR tickets are €1, though you can also get a day ticket or other passes that appeal to tourists. In any case, Tallinn’s system has been such a success that Estonia now is extending free transport across the country.

For Tallinn, the finances have worked out because since it introduced free public transit, some 30,000 people have stepped up to become new city residents. Residency entails paying the municipality €1000 -- a tax that more than makes up for the loss in ticket sales and leaves funds for refurbishing tram lines and keeping things spic and span. Essentially, Tallinn’s “free-riders” pay for transportation in the cost of their residency.

This clearly isn’t a setup that will work everywhere. Still, that hasn’t stopped other cities from trying or at least thinking about it. Luxembourg is moving to free transport by March 2020. Paris is studying the possibilities. And cities from Bucharest, Romania to Chengdu, China have been in touch with Tallinn to learn from it. Tallinn’s city website even has a page dedicated to the study of free public transportation with research resources and a conference schedule.

And why not? Intuitively, free public transportation does sound great. If you can raise public ridership, you would naturally reason that you could reduce auto congestion, improve air quality, help out lower-income residents, stimulate local businesses and possibly revitalize city centers.

Unfortunately, the reality isn’t that simple, and free public transportation doesn’t always work. Several years ago, Joe Pinsker wrote in The Atlantic that even when public transport becomes free, it often doesn’t work because it doesn’t get enough people to stop driving. In the U.S., experiments in free public transportation in Denver, Trenton, and Austin all failed in that they increased ridership among those who walked or biked, but not those who drove. Likewise, Rome tried free public transit in the 1970s to alleviate heavy city traffic, but it found that this wasn’t enough to get people to abandon their cars.

Very large cities, in fact, may not be the best suited for free public transit. Smaller cities with certain layouts or college towns or resort communities where populations swell seasonally do better. And Tallinn, with a population of about half a million, may be just the right kind of city for success. It’s not a terribly crowded city, and most rides aren’t longer than 15 minutes. What’s more, Tallinn is a vibrant tech hub where residency is attractive.

But even in Tallinn, it isn’t clear that free public transportation has helped city congestion or air quality. Alaküla, the head of Tallinn’s EU office, says that congestion in the center is getting better, but this may be due partly to higher city parking fees or other factors. And while public transit ridership has increased, there isn’t good evidence on whether it’s replacing walking or driving.

Still, it’s hard to knock a city public transit system with an approval rating close to 90%. If it’s clean and you can usually get a seat, I’d say that sounds pretty good.