Why Fare-Free Buses Would Benefit Athens

Athens-Clarke County has struggled with an extremely high poverty rate for years. In fact, our 38% poverty rate is high enough to make us the poorest metro county in the entire US (1). A decade ago, the group Partners for a Prosperous Athens was formed to find ways to combat poverty in Athens, then standing at 29%. A few years later, the financial crash of 2008 forced local governments everywhere to start cutting their budgets, and poverty increased significantly nationwide. Local government funding for Athens Transit has dropped from a little under $3 million in FY 2009 to $1.8 million in 2014 (2) at the same time fares have increased from $1.25 to $1.75 and service has been cut (3).

ATFunding2Recently, the recession has begun to ease, and our local government has had additional revenue available for spending — $2.6 million extra in 2015 (4). If public transportation is considered a priority by policy makers, the budget of Athens Transit will be restored in coming years as requested by Transit Director Butch McDuffie. We in Athens for Everyone feel that now is the time to strongly consider eliminating fares completely and moving to a fare-free system as Clemson, SC and Chapel Hill, NC have done.

Fare-free public transportation would benefit Athens-Clarke County in numerous ways. First and foremost, it will alleviate the burden on Athenians in poverty or without cars or other means of transportation. Some say that our large student population somewhat inflates the poverty numbers in Athens, but no one denies that it is a large and growing problem. It is important to remember that UGA and Piedmont College students already have access to fare-free transportation, but poor locals and those attending Athens Tech do not receive this same privilege. This is a source of frustration for many people, which is somewhat damaging to town and gown relations in certain areas of the county. Furthermore, we estimate that families in poverty would need to spend roughly 18% ($3,276 of $18,552) of their income on bus fares each year, which is a significant burden.

It seems likely that most of the $3,276 spent by families in poverty on bus fares would not be saved after switching to a fare-free system, rather, it would be spent and recycled into the economy. This would be a significant boost to local merchants, and part of the profits would end up back with the city government via sales taxation. The American Public Transit Association claims that every dollar spent on public transportation generates $4 in economic returns for the community (5). In some areas that have switched to fare-free systems, local businesses are an integral part of the financial support which makes eliminating fares achievable (6).

Another reason to support public transportation is that mass transportation causes much less carbon dioxide pollution per rider than do individual vehicles. Therefore, environmentalists have every reason to support fare-free transit, which has increased ridership significantly everywhere it has been tried. Typically, ridership increases by 20%-40% in just a few months (7). Ridership increases are simultaneously the greatest promise of going fare-free and also the most significant difficulty in implementing such a system. Transit capacity has been strained in some areas trying fare-free buses, causing them to bring back fares simply to keep down ridership and avoid capacity-building expenses. Most transit systems, however, find it difficult attracting riders. Athens Transit has been losing riders lately to the new (fare-free) UGA bus going along Prince Avenue. Athens-Clarke County even requested that the UGA bus be converted to an express route to force riders back on the city bus, but this request was withdrawn in the ensuing public uproar (8).

Just how much would going fare-free cost Athens-Clarke County? The answer depends on what you count as an expense. In this analysis, we will include the income Athens Transit gains at the farebox and the cost of collecting fares, but it will not include the increased sales tax revenue and economic activity sure to result from removal of fares. It will also not include additional capacity-building expenses that may result from greatly increased ridership.

Athens Transit claims to have received a little over $2 million in fares for 2014 (9). However, this number is somewhat misleading since roughly $1.2 million of this is received as a quarterly payment from UGA based on a three-year ridership average and is not literally obtained from the farebox itself. Athens-Clarke County has a contract with UGA that is often re-negotiated. In previous years, UGA paid a flat fee each year based on the number of students and faculty at the university. Currently, UGA is contracted to pay the standard bulk rate of $1.41 each time a member of the university rides Athens Transit, and this is considered a “fare” by the local government instead of a “fee.” This does make it easier (or in fact possible) for Athens Transit to meet its 35% “at the farebox” budgetary goal (set by the Mayor and Commission), but we believe this contract could be renegotiated and that the entirely arbitrary 35% rule should be dropped. We do not consider UGA’s contribution to be a part of the revenue gained at the farebox. This leaves an $800,000 per year funding gap before fare-free could be achieved, or 0.4% of the county’s $199 million budget.

Even the $800,000 number is an overestimate of the cost of going fare-free in Athens. This is because a large number of tickets are in fact purchased by the school board and by local nonprofits who get some of their funding from the local government. We do not think that money the local government pays itself should be considered “revenue” and believe it is more accurate to subtract this amount (roughly $200,000) from the cost of going fare-free, leaving the amount at about $600,000.

Again, the $600,000 number is an overestimate because the cost of collecting fares has not been considered. These fareboxes cost between $500,000 and $800,000 for the city’s bus fleet and last about 10 years before they are scheduled for replacement, a cost of at least $50,000 per year. Additionally, parts, repair, and licensing for the boxes costs another $75,000 per year or more. Ticket printing expenses are about $10,000 per year. Lastly, the city must pay employees four hours of labor a day simply counting the money itself, which (at $10/hour) amounts to perhaps $12,000 a year. Collectively, this means that another $150,000 must be subtracted from the cost of going fare-free, leaving the total at $450,000, or 0.23% of the city’s yearly budget. This is entirely affordable for a city of our size.

We have demonstrated that the biggest expense in implementing a fare-free system in Athens would not come from the lack of fare revenue, but rather from the potential vast increase in ridership and resulting capacity-building expenses. Yet, even this cost would likely not be as high as in other areas, due to the presence of an already fare-free system in the same county (UGA Transit). Additionally, most riders on Athens Transit itself are associated with the university and already ride free, further reducing the odds that there would be a budget-crushing increase in ridership since these riders are not sensitive to fare prices (12). As much as we at Athens for Everyone would love to see a massive number of new riders after switching to fare-free, it seems likely that increases in ridership would be manageable. As a way to demonstrate this, we are currently asking the local government for a three-month fare-free trial period to take place in 2016, similar to the one in Asheville, NC in 2006 (13). The cost of the trial period would be roughly $200,000, an amount we know is affordable because it is the same amount the city has already allocated for the 2015 Transit Study.

Asheville performed the trial period simply as a way of marketing their transit system, but took detailed notes which are of use to us as we hopefully consider a similar move. They saw a 60% increase in ridership, which overwhelmed their system and caused complaints to increase and on-time performance to suffer. Nonetheless, their experiment was considered a success because even a year after the trial, ridership remained up 9%. If Athens has a similar experience after conducting a fare-free trial period, we would have a choice: we could either greatly expand our transit system to accommodate the new riders at the expense of millions of dollars while maintaining fare-free service, or we could bring back fares and accept the increase in fare revenue that the new riders (however many remain) would bring. Only the taxpayers of Athens can decide, but whichever path is chosen, Athens would seem to be better off, even in the unlikely scenario of a massive increase in ridership during peak hours.

Fare-free public transportation is not a new idea in the southern US. Clemson-Area Transit has been fare-free since its inception in 1996. Chapel Hill Transit in NC has been fare-free since 2002, and AppalCART in Boone, NC has been fare-free since 1981. Yet, in the minds of the public and even many policymakers who are unfamiliar with the idea, it often seems an unrealistic fantasy. This is unfortunate, because fare-free public transportation has the potential to revolutionize ACC transit, improve our economy, reduce carbon dioxide emissions, and provide a hand up to thousands living in poverty. Athens-Clarke County seems an ideal candidate for adoption of the policy, and in fact, we have already adopted it for the vast majority of riders on both UGA Transit and Athens Transit. UGA Transit gives fare-free rides to over 11 million riders a year (14). Athens Transit likewise gives over one million fare-free rides a year. The remaining riders paying a fare represent only 5.5% of the total yearly transit trips in Athens-Clarke County, yet somehow it is considered “unrealistic” to extend the fare-free program to these additional residents, and we have instead chosen to raise fares twice in three years. We at Athens for Everyone consider this to be unacceptable.

Chris Dowd
January 8th, 2015

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