Why Not Offer Free Bus Service?

Panos Prevedouros, PHD
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BY PANOS PREVEDOUROS PHD – That’s a question that comes up often in public forums I attend. Why don’t we make public transit like Honolulu’sTheBus free?

The Transportation Research Board, a unit of the National Academy of Engineering has just released a report titled, Implementation and Outcomes of Fare-Free Transit Systems.


The quotes below help us conclude that tiny systems like the one on the Big Island are better of being free because it costs more to collect money than the money that will be actually collected. Large systems like Honolulu’s can’t be run for free. They will run out of funds quickly and they’ll likely become movable homeless shelters. Recall that TheBus is cutting routes because it cannot afford its fuel bill.

Actual ridership of free bus systems also showed that free bus does not translate into less traffic congestion because even at zero cost, too few motorists switch to the bus.

Here are the main findings of the report:

  1. No public transit system in the United States with more than 100 buses currently offers fare-free service. (Honolulu TheBus has over 550 buses.)
  2. The largest jurisdictions currently providing fare-free service are Indian River County, Florida, and the island of Hawaii, both with populations of approximately 175,000. (The free bus on the Big Island basically transports workers from Hilo to resorts in Kailua-Kona.)
  3. Fare-free public transit makes the most internal business sense for systems in which the percentage of farebox revenue to operating expenses is quite low. In such cases, the cost associated with collecting and accounting for fares and producing fare media is often close to, or exceeds, the amount of revenue that would be collected from passengers.
  4. Providing fare-free public transit service is virtually certain to result in significant ridership increases no matter where it is implemented. Ridership will usually increase from 20% to 60% in a matter of just a few months. (Note: It’s worth exploring a low cost bus fare between the Waianae coast communities and the Kapolei transit center.)
  5. Some public transit systems that have experimented with or implemented a fare-free policy have been overwhelmed by the number of new passengers or been challenged by the presence of disruptive passengers, including loud teenagers and vagrants.
  6. Systems offering fare-free service in areas of higher potential demand for public transit need to be aware that increased ridership might also result in the need for additional maintenance, security, and possibly additional equipment to provide sufficient capacity and/or maintain schedules.
  7. A relatively small percentage of the additional trips (from 5% to 30%) were made by people switching from other motorized modes. Most new trips were made by people who would have otherwise walked or used a bicycle, or would not have made the trip if there was a fare to pay.





  1. A fare-free experiment need not to be all or nothing. Providing fare-free express buses, perhaps during rush hour only, along the intended rail (or tramway, according to Senator Inouye) route, without increasing the number of planned stops, would be an excellent way of forecasting its effectiveness in reducing traffic. I doubt these potential new riders would have either walked or biked to work.

    • Actual sophisticated fare systems have a Peak and Non-peak fare scale and Peak fares are twice or more expensive that Non-peak period fares. In this way the spike in demand is incentivized to spread in the Non-peak times. If we have free Peak fares then we would need to “double” the bus fleet and number of drivers for only 3-4 hours a day of peak use. That’s a wasteful proposition for scant public resources.

      More along your vein of thought would be a pilot free-lunchtime-bus from 11 to 1 on normal weekdays so fewer people would drive around in the midday.

  2. While logistical isues could indeed result from increasing peak hour loads, my suggestion is not intended to level overall demand but rather is meant to specifically assess the potential traffic impact of rail. A better cost comparison between an expanded bus service and rail could then be performed. Daily commuters do not necessarily have the work flexibility to shift their schedules to take advantage of off-peak fares. The current political vogue is to encourage public transit, which translates into getting more riders, regardless of time period. Smoothing the demand curve comes later.

  3. The problem is that with a free bus in peak hours a lot of people who do not have to go to work or school will also use it, thus creating heavy demand and overcrowding that will be too expensive to mitigate. The high peak fare is designed to encourage discretionary trips away from the peak hours.

    I’d rather not mix bus and rail. Bus serves 100% of the island whereas rail serves ~10%.

  4. For once I find myself agreeing with something Panos has written on public transportation except for one thing he missed on. There is one U.S. bus system with over 100 buses that is fare-free. That is the Chapel Hill, NC system which operates 121 buses, both fixed route and paratransit. Chapel Hill Transit is something of an exception since it serves the area where the Univ. of North Carolina – Chapel Hill is located. Chapel Hill's base population is only about 58,000 but the University of course boosts that number but not to the 175,000 threshold Panos cited. The University and the town support the free-fare transit operation. One interesting side note is that the people of Orange County, NC where Chapel Hill is located voted last Nov. to tax themselves to help build a light rail line connecting the area with Durham, NC where Duke Univ. is located and where residents also voted in 2011 for a tax to build the rail line.

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