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Fare-Free Public Transit Benefits Kansas City Residents, Businesses

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Monday, February 6, 2023   

By Jared Brey for Governing.
Broadcast version by Deborah Van Fleet for Missouri News Service reporting for the Solutions Journalism Network-Public News Service Collaboration


When Kansas City opened a new streetcar in 2016, it was simultaneously a throwback to a bygone era and a bet on the future of its downtown.

The 2.2-mile line, which runs every 10 to 20 minutes on a north-south route through the central business district, was imagined from the get-go as a tool for promoting downtown economic development. Funded by a special Transportation Development District, with an extra sales tax and special assessment on properties within a few blocks of the line, the Streetcar is sleek and quiet, and it was greeted with enthusiasm by many residents, business owners and tourists. And from the moment it opened, it was free to ride. That's because its backers calculated early on that a fare-free service would encourage more people to ride, spend money downtown and prop up the Development District.

"We did a close look at the costs and benefits of fare collection on a small system, and because of the unique nature of how we're funded, [we determined] we could generate more revenue without a fare than with it," says Tom Gerend, executive director of the Kansas City Streetcar Authority.


Six years after it opened, the Kansas City Streetcar is undergoing two route expansions that will triple its total reach. And the city's entire transit system has eliminated fares - at least partly because the Streetcar, fundamentally a different type of service than a metropolitan transit system, did it first.

Fare-free transit has become a topic of intense debate in cities big and small over the last few years. To date, Kansas City is the largest city to have made the plunge. In 2019, the City Council directed the city manager to dedicate $8 million to the Kansas City Area Transportation Authority (KCATA) to make up for lost fare revenue. While the zero-fare program was initially meant only for trips that originated in Kansas City, Mo., the Authority and partner agencies decided to make the entire system fare-free in March of 2020 as the COVID-19 pandemic took hold.

The program is set to sunset at the end of 2023, but local officials are preparing to make it permanent. They say it's been a success on nearly all the measures they care about. But the lessons they've learned may not be so easy to transport to other cities.


Why Free Fares?


Proponents of eliminating transit fares cite a variety of benefits. Most importantly, making transit free can make it more equitable, by removing barriers for low-income passengers and improving mobility for people with disabilities. It also has clear operational benefits. Letting passengers board a bus at any door, without rooting around for change or a pass, can speed up travel times and help keep buses on schedule. Those improvements have been realized in Kansas City, proponents say.

Fare elimination "dramatically reduces the friction of using transit," says David Johnson, chair of the Kansas City Regional Transit Alliance. Officials also say doing away with fares has reduced the number of conflicts on the bus, which most frequently have arisen over fare payment.

"There's a huge benefit to making the system easier to use and keeping it low cost," says Richard Jarrold, the interim deputy CEO of KCATA. "Connecting people to opportunities is a primary part of our mission."

Proponents of zero-fare transit have also argued that eliminating fares will improve ridership. The onset of the pandemic at the beginning of Kansas City's fare-free program makes that theory hard to test. Transit systems everywhere lost millions of regular passengers, which they've only begun to fitfully recover. But officials believe the fare-free program has helped KCATA recover its riders relatively quickly, to around 80 percent of pre-pandemic levels. The system had 971,666 trips in October, according to official reports - a 16 percent increase since the same time last year.

"Ridership is a tough one, but we certainly believe zero-fare has had a positive impact on how quickly our ridership has grown back," Jarrold says.


Low Fare Revenue, Important Returns


One thing that made fare elimination in Kansas City a relatively easy decision is that the transit system has traditionally collected a fairly small amount of money from riders. Typical fare collections were around $12 million a year prior to the pandemic, according to Jarrold. It was easy enough for Kansas City, Mo., to make up $8 million of that amount from its budget, notwithstanding some concerns raised by certain council members. And federal COVID-19 relief funds have helped fill in the gaps.


Moreover, eliminating fare collection has removed some costs. KCATA typically spent between $500,000 and $750,000 a year to maintain its fare boxes and to have the cash it collected carried to the bank in armored trucks. Jarrold says that prior to the fare-free program, the Authority was also looking at a system-wide replacement of aging fare boxes - a project that would have cost around $10 million. It would have cost $100,000 per station to get ticket machines for the Prospect MAX bus rapid transit line, which opened in 2019.

"We just came to the conclusion that it wasn't worth it, and it really wasn't worth it for our community," Jarrold says.

Since before the zero-fare program started, transit officials have argued that eliminating fares would have important social and economic benefits. Former KCATA CEO Robbie Makinen was fond of saying that riders could do more with the $1.50 fare by spending it on something other than a bus ride. The Center for Economic Information at the University of Missouri Kansas City (UMKC) produced a study in February 2020 estimating that the zero-fare program could increase regional gross domestic product by $13 million to $17 million. The study also concluded that fare elimination would be "a major step forward in the struggle for the Right to the City," a concept that comes out of 20th century French philosophy and that promotes the rights of urban residents to shape the political and economic life of their cities.

The Center for Economic Information produced another report for the Urban League of Kansas City in 2021 measuring the quality-of-life impacts of zero-fare transit. The Center surveyed nearly 1,700 riders about how fare elimination affected their lives, including their ability to get to medical appointments and shop more frequently for food and other essentials. Responses were more than 80 percent positive in every category. Linwood Tauheed, director of the Center for Economic Information, notes that more than 85 percent of respondents said free fares had made them feel that Kansas City leaders were concerned about their needs.

"We would hope that that would provide an incentive for Kansas City leaders to continue this program," Tauheed says. "Because this program has a sunset and this is an indication that the citizens appreciate what KC leadership has done."

Another UMKC group is currently working on a study related to fare elimination and public health outcomes, according to KCATA.


A Limited Transit Network


The benefits to riders of Kansas City's zero-fare program are perhaps overshadowed by the limited reach of its transit system. Less than 13 percent of Kansas City's low-income households live near a bus route, according to one report. And only 3 percent of Kansas City residents use public transit at all, according to another. The system is sorely lacking in east-west transit routes, a problem for which the Authority has begun exploring solutions.

Free though it was, the opening of the Streetcar only reinforced the sense that Kansas City's transit system only really serves a small portion of its residents. KC Tenants Power, an advocacy group that has focused on housing issues but which is planning a much broader platform ahead of upcoming political races, recently posted a flier suggesting that downtown amenities like the Streetcar were "Not for us." Jarrold acknowledges the opening of a free streetcar focused on downtown development put the rest of the fare-collecting system in an awkward position.

"Part of our conversation has always been, why should the streetcar have a $0 fare and yet our local bus system that's carrying people to work every single day - why would they have to pay a fare?" he says.

Making the bus system free has improved the experience for riders, but it hasn't necessarily allowed it to serve more people.

"Kansas City doesn't have very good transit," says David Bragdon, the executive director at TransitCenter, a New York-based advocacy group. "It used to have not-very-good transit that charged $1.50. Now it has not-very-good transit that's free. It doesn't really move the needle on the things that really matter to people."


Are Free-Fare Programs a "Gimmick"?


Part of the reason why Kansas City was able to implement a zero-fare program is because it didn't make much money from fares. That's not the case in many other big cities. The Bay Area Rapid Transit system in San Francisco collected about two thirds of its budget from fares before the pandemic. Fares also provide a huge portion of revenue in Boston, where political leaders have pushed for free transit, and in New York, where the Metropolitan Transportation Authority runs one of the most extensive transit systems in the world.

"Half the revenue [in New York] comes from fares," Bragdon says. "To just tell the MTA to go find billions of dollars is not a realistic political proposition."

More importantly, Bragdon says, it's not the cost of the ticket that prevents most people from getting on the bus. He cites a pre-pandemic University of California, Los Angeles study which showed an increase in car ownership among transit riders in Southern California - a much more expensive option than riding the bus. Eliminating fares is a "distraction from doing the really important things," he says.

"It's sort of a political gimmick that some elected officials use to make it seem like they're doing something when actually they're not doing a whole lot," Bragdon says.

Transit officials and advocates in Kansas City acknowledge that the system needs major improvements. A big obstacle to those improvements is the lack of regional funding, says David Johnson of the Kansas City Regional Transit Alliance. Kansas City, Mo., contributes much more funding per capita than other area governments, many of which only provide limited transit service in their areas, he says. But that's not an argument in favor of collecting fares.

"The operational cost of each agency running a unique fare-collection system is high and the recovery of revenue is low - in addition to the customer friction that leads to fare disputes," Johnson says. "The only reason agencies still charge fares is due to the history of transit agencies being for-profit enterprises."

Kansas City Council member Eric Bunch, who sponsored the effort to help fund the zero-fare program, declined an interview request. But officials have said they're committed to keeping the bus system fare-free after 2023. Even if they do, it won't necessarily be a proof of concept for other metropolitan transit systems. While Kansas City is the biggest city to go fare-free, its transit system is still comparatively small, and eliminating fare collection didn't come at a very great cost.

"[Fare-free transit] is something that can be really beneficial," says Matt Casale, environment campaigns director at U.S. PIRG, a public-interest advocacy group. "But you've got to make sure that frequency of service, convenience of service - that's the thing that's the guiding star. If this is a part of that, it can work really well. But if it's a net loss of operating dollars and results in no improvement, it just doesn't help anybody."



Jared Brey wrote this article for Governing.


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