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Free Transit from a CX Lens


Bus with head sign that says "FREE!"
Original image by Exp691 via Wikipedia, CC BY-SA 4.0. Art by Christopher Cheung.

Much has been made about the costs and benefits of free transit. Just a sampling of recent articles include:



Many agencies have taken the free-fare plunge - including Alexandria and Richmond Virginia, Kansas City, Los Angeles, Boston, Denver, Washington DC, Albuquerque, New Mexico, and Seattle. Some programs provide universal free fares, while others focus on bus-riders-only, certain routes, temporary promotions, or free fares for students, residents of public housing, or rides taken on holidays. And even more agencies temporarily eliminated fares during the COVID pandemic.


Some commentators tout the financial relief free fares provide to struggling families and argue that many agencies don’t net much fare revenue anyway after accounting for the cost of fare collection. In contrast, others feel that free fares rob transit agencies of revenue needed to improve service. Some point to the four decades (1904 - 1948) when New York froze the fare at a nickel and did not keep up with inflation, and how that eventually caused overcrowding, deferred maintenance, unclean conditions, and eventually financial collapse (see The Fare Hike Mess - gothamgazette.com).


Few commentators, though, have looked at the free fare issue from a deeper Customer Experience (CX) lens. Let's start with the Transit Customer Journey and look at where fare payment fits in.

illustration of the Customer Journey - Plan, Access, Wait, Pay, Ride, Connect, and Egress

Fare payment touches on most of these stages, and is a source of potential friction, confusion, or technical problems that customers may experience during their journey:

  • During the Plan phase, customers typically have to absorb information about fares and discounts, and often multiple ways to purchase and validate fares. It can be a complex undertaking to choose how to pay, go to a website, vending machine, retail outlet, or customer service center to purchase the fare, and calculate how much money to bring along on the trip if you are paying cash.

  • The Access phase can add additional complexity if the customer needs to navigate additional fares or fees to access the system by microtransit, feeder buses, bikes, or scooters, or to pay for parking.

  • New or infrequent riders may find themselves anxious during the Wait phase if they are uncertain how to validate their fare to ride the bus or train.

  • The Pay phase can create more friction if, for example, customers have to wait in line in the rain to board a bus because a customer ahead of them is fumbling for change or the validation equipment is malfunctioning.

  • The Ride phase is more of a mixed bag, especially on buses. On one hand, free fares can speed up boarding, but on the other hand it can encourage short trips that cause the bus to slow down and make more stops. On one hand, riders won't be interrupted by fare checks if fares are free. On the other hand, free fares may result in more people experiencing homelessness that use transit for shelter. While free rolling shelters benefit people experiencing homelessness, they can adversely affect the health and safety perceptions of other riders.

  • The Connect phase can create further friction if additional fare is required to transfer to another service, or confusion if the transfer rules are complicated.

  • And finally the Egress phase can add complexity if payment is required for last-mile microtransit, feeder buses, bikes, or scooters.


All in all, fare payment can be a major pain point, especially for new or infrequent riders, and especially for regional travelers who may transfer from one bus or train to another.


That being said, studies have shown there are pain points that discourage transit use to an even greater degree, such as excessive wait or travel times, riders not feeling safe from crime, and cleanliness to name some common complaints. Free fares should not come at the expense of improvements in these areas, so it is essential that free fares are accompanied by new revenue sources to underwrite the costs of foregone revenue, service increases that might be needed to accommodate increased demand, security improvements, and social workers to engage with people experiencing homelessness.


Even from an equity perspective, will free fares provide financial relief to struggling families if people have to frequently "splurge" for Uber or Lyft rides due to long headways, service delays, or because they feel unsafe on the bus or train? Will free fares help family budgets, if people experience financial penalties because they are late to work or late to day care pickup? Free fares without good service does not make transit more equitable.


Another aspect of free fares that has not gotten enough attention is the negative impact on agency incentives to provide excellent customer experiences. When transit agencies depend on customer fares to help fund their organizations, they are naturally more likely to focus on the customer and strive to meet their needs. Paying for a service essentially puts power in the hands of the consumer, because the provider of the service wants the consumer's money and loyalty. So what happens when an agency no longer receives customer revenue? Will they have as much incentive to satisfy their customers? Will it tend to disempower transit customers?


CX Tip: Fortunately, there is a way to ensure transit agencies are incentivized to be customer centric, even when fare revenue is no longer a motivating factor. This requires that new, substitute revenue sources be structured in a way that incentivizes agencies to increase ridership and customer satisfaction. The entity that provides the subsidy can set a formula that bases the annual amount of the subsidy in part on boosting customer satisfaction and ridership. And a small amount of funding should be set aside for independent surveys of customer satisfaction and auditing of reported ridership figures to ensure fair play.


If, alternatively, free fare subsidies are structured as lump sums or use traditional return-to-source formulas, transit agencies will be less motivated to strive for excellence, and transit customers may find that they "get what they pay for," i.e. they pay nothing, so get low quality services in return.

woman validating farecard on transit vehicle

In summary, free fares are mostly good for CX. Free fares can make customer experiences less complicated and more care-free, and free fares can eliminate points of failure and friction. But free fares should not come at the expense of even more important improvements, and subsidies should be structured in a way that incentivizes customer-centricity.


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