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The case for free public transportation

The case for free public transportation

We all love getting stuff for free.

Free pizza, for example, can lure you to a meeting that you don’t really want to attend or even entice you to get a COVID-19 vaccine. And free items posted on Facebook marketplace are usually gone in a matter of minutes. There is magic in getting something you value — and in some situations would pay for — free of charge.

Now how would you feel about free public transportation? I mean totally free. No turnstile gates, no conductors, no lineups to renew monthly passes, no worrying about having the right change for the bus.

Free. Frictionless. You jump on and off the bus whenever you want.

The residents of Luxembourg apparently feel quite good about it. Since March 1, 2020, all forms of public transport — buses, trains and the brand-new tram — are free of charge throughout the entire country.

“The great advantage of free public transport is the ease of use of the system,” Kim Vo, a communication officer with the Department of Mobility and Transport in Luxembourg, wrote me in an email.

“The switch to free travel has put public transport in the public eye. It has certainly helped to make people who previously did not consider public transport as an option for their trips aware of the existing offer,” Vo added.

Vo said that since the plan went into effect — only 10 days before the first COVID lockdown — it is tricky to compare current ridership numbers with pre-pandemic numbers. But data from the first 10 days of March 2020 show a dramatic 30 per cent increase in the number of passengers compared to before public transportation was made free.

Recently, in neighbouring Germany, Parliament passed a similar scheme, albeit not entirely free. For just 9 euros per month (about C$12), riders have unlimited access to any bus or train nationwide with few restrictions, during June, July and August.

Early reports from Germany show that the so-called 9-for-90 ticket (9 euros for 90 days) led to a sharp increase in ridership numbers, exceeding industry expectations. Berlin and Brandenburg, for example, recorded in June a 25 per cent increase in passengers on certain routes, a German media outlet reported.

Even Montreal launched a mini free-fare program, offering free weekend and holiday rides this summer at seven popular metro stations.

While attempts by authorities to change people’s habits and prompt them to ditch their cars have been made before, they rarely went all the way by fully subsidizing public networks. The initial upfront big cost gave politicians and policymakers cold feet as they lacked the vision and courage to make investments that go beyond a straightforward return-on-investment calculation.

But Guillaume Tremblay-Boily, a researcher with The Institute for Socioeconomic Research (IRIS), a progressive, Quebec based think tank, says if one takes into consideration the total social cost and externalities of using cars — pollution, wasted work time, road repairs, etc. — then subsidizing free public transportation would actually be cheaper.

And now, three factors — the severity of the climate crisis, the pandemic and inflation — have prompted policymakers to re-evaluate the traditional return-on-investment equation and sparked a trend of fare-free public transportation that is gaining momentum around the world.

“There is no better time to introduce free public transportation,” Tremblay-Boily tells me in a phone interview. “The system would be able to absorb it quite easily without creating a shock in terms of the infrastructure since ridership is still much lower than pre-pandemic levels,” he explains.

But what about the cost of subsidizing such an ambitious program? Where will the money come from?

To give this theoretical discussion a practical context let’s consider some numbers. Based on the annual report of the regional authority for metropolitan transport (ARTM) in Montreal, during 2021 the total amount of collected fares paid by passengers was just shy of $450 million.

At the same time, Quebec’s premier, François Legault, announced that a one-time payment of $500 will be sent to 6.4 million Quebecers (90 per cent of the adult population) who make less than $100,000 a year as a measure to help with the rising cost of living. The total cost of the program is $3.2 billion.

In lieu of this populist measure (which comes just before the provincial elections in the fall) the Quebec government could have financed more than seven years of free public transportation in a metropolitan area with about 4.3 million habitants.

That could be a real game-changer for someone paying $94 for a monthly metro pass.

The Luxembourgian experience shows us that “the power of free” can prompt a change in people’s commuting habits. Introducing such a measure in Canada will show real commitment to reducing greenhouse gas emissions, will significantly ameliorate traffic congestion and reduce pollution and will improve the financial well-being of those who rely on public transportation and are struggling to cope with inflation.

If Germany — a role model for fiscal discipline — found the funds to introduce an almost free three-month pilot, we should be able to do the same. Canada needs to fight its car culture and all we need is a little daring and some vision.

Amir Barnea is an associate professor of finance at HEC Montréal and a freelance contributing columnist for the Star. Follow him on Twitter: @abarnea1