By Justin Sanchez

EXECUTIVE SUMMARY: 

The City of New York should work with New York State to request that the MTA implement a six-month pilot of a free-fare bus system, excluding express bus service. This fare-free service pilot would be funded through a combination of congestion pricing and federal funding. This fare-free bus service would increase bus ridership, improve the quality of bus service, and strengthen the relationship residents have with the Metropolitan Transit Authority (MTA). The fare-free bus service would also reduce costs in other areas such as transit police and school fare reimbursement. In addition, the fare-free bus service would bolster the need for the completion of many of the administration’s goals, including the build-out of new bus lanes, transition to fully-electric buses, and expansion of open streets. 

INTRODUCTION:

The ongoing COVID-19 pandemic has shed light on many inequities which have long existed in the City of New York. One such issue is the lack of equitable access to transportation, particularly for communities of color and low-income individuals. Due to both health and economic concerns early in the pandemic, the MTA provided free bus service to all New Yorkers between March 20 and August 31, 2020.[i],[ii]

The free bus system became a lifeline for many vulnerable New Yorkers, particularly essential workers. This free bus service was faster and more efficient than the bus service that existed pre-pandemic.[iii],[iv] In addition, bus ridership surpassed subway ridership for the first time in New York’s history.[v]

The trend towards free public transit is not new to the pandemic era. Countries and cities around the world, including in other parts of the United States, have adopted free public transportation systems.[vi] From North Carolina’s Research Triangle to Boston, the availability of free public transportation, particularly free buses, continues to expand.[vii]

PROPOSAL: 

The City of New York should work with state officials to push the MTA to execute a six-month pilot period in which the entire bus system, excluding express bus service, is fare-free for all riders at current levels of service.[viii] After five months of implementation, there should be a review of the pilot and a determination of whether to maintain the free-fare system permanently. If the review justifies the pilot’s conversion to a permanent system, the MTA must produce a plan for public feedback including identifying sources of future funding. 

COMPARISON: 

Chapel Hill, North Carolina

Chapel Hill Transit (CHT) is a free-fare bus service system that operates 31 weekday and weekend routes with demand response accessible service.[ix] It has a fleet of 121 vehicles covering over 2.5 million miles a year in a service area of 62 square miles.[x] These buses are electric. They do not run on a 24-hour system. CHT operates in conjunction with other free transit options including the GoTriangle system which provides regional transportation service to Raleigh, Durham, Chapel Hill, and more.[xi] The transit is paid for through contracts with University of North Carolina (UNC)-Chapel Hill and Carrboro at 40 percent with state, city, and federal resources accounting for 39 percent, and the remaining funds coming from other sources.[xii] The express buses which are not fare-free account for only four percent of revenue.[xiii]

Boston, Massachusetts

Boston also made some transit options fare-free during the pandemic. The free bus route that saw its fares removed saw ridership stay steady at 92 percent of its pre-pandemic ridership levels, despite the decline in ridership on other lines.[xiv] Using $8 million in federal funding, newly-elected Mayor Michelle Wu has expanded the fare-free  options to three bus routes permanently free for a two-year period.[xv] According to the City of Boston, the pilot aims to measure the benefits of free-fare bus service, which should include “increased ridership, faster buses, less traffic, and business development.”[xvi]

New York City

Outside of the MTA’s five-month free-fare bus period, free bus service has existed in a small part of the city for 15 years. The Downtown Connection bus service provides free transportation to individuals within Lower Manhattan and Battery Park City.[xvii] With 36 stops, and a running time of 10:00AM to 7:00PM residents and visitors have a permanent free-fare service privately funded by the Downtown Alliance. This costs the organization roughly $1.5 million per year to operate.[xviii]

Potential MTA Fare-Free Bus Service

The MTA fare-free bus service would operate similarly to the Chapel Hill transit system in that the entire service area would be fare-free for all riders, excluding express bus service. Furthermore, the funding model would be a combination of the Boston and Chapel Hill examples, relying on funding from city, state, and federal allocations. Unlike the existing free bus service in lower Manhattan, the fare-free bus service would not have any reliance on private funding. 

COST ANALYSIS: 

Making the MTA buses free for all riders, excluding express bus service, will result in a significant reduction in farebox revenue. This cost analysis would presume a farebox reduction to zero.[xix] Pre-pandemic, in 2019, MTA bus farebox revenue was $224.8 million, accounting for roughly five percent of the total New York City Transit Authority (NYCTA) farebox revenue.[xx],[xxi] During the pandemic, in 2020, including the reduction to free service for five months of the calendar year, MTA bus farebox revenue fell by 67 percent to $73.2 million.[xxii] The 2020 MTA bus farebox revenue accounted for slightly over four percent of the total NYCTA farebox revenue. 

Concurrently, there would be an increase in costs because of anticipated higher passenger demand. However, before the pandemic began, MTA bus ridership has been consistently decreasing. The latest MTA bus report explicitly showed how bus ridership had dropped year-over-year since 2016.[xxiii] With a reduction of MTA bus ridership due to the COVID-19 pandemic, any increased costs from higher anticipated passenger demand would take years before reaching costs approaching pre-pandemic levels, based on the increase of the demand from workers for the ability to work-from-home and general transportation anxiety as the pandemic continues.

New revenue streams can offset the lack of farebox revenue and the increase in costs from bus ridership. Congestion pricing is anticipated to bring in $15 billion in revenue.[xxiv] Furthermore, $5.9 billion has been earmarked specifically for transit from the American Rescue Plan which has already been enacted into law.[xxv] Upon review of the pilot, the City of New York could examine other sources of funding based on private companies such as the “Jumpstart Tax” implemented in Seattle.[xxvi]

In addition, there would be savings from other areas of the city budget associated with MTA bus ridership. First, there would be a decrease in fare collection and enforcement, which currently costs the city $3 million for transit police.[xxvii] There would also be potential for reduction of school fare reimbursement for transit which costs the city $45 million.[xxviii]  

STAKEHOLDER ANALYSIS & CONFLICT RESOLUTION:  

Bus Riders and City Residents

Bus riders and residents would be extremely pleased with a fare-free bus system. The fare-free bus system results in faster times and better service.[xxix] The areas and services in which residents have fast, easy, no-cost access to in order to complete necessary everyday activities such as grocery shopping, barber shops, hair salons, and local hardware stores would also expand because of fare-free bus service. Furthermore, local business owners would potentially have more traffic and customers as access to their stores becomes less of a burden. However, there is a potential pushback from current bus riders who may have health and safety concerns with more crowded buses. However, with faster speeds and efficiency, current bus riders should also welcome the improvement in service that should offset any uncertainty. 

Transit Workers and Unions 

Unions would be split in their reaction towards the free-fare bus system. There would be the obvious concern over ways to pay for the system. With the reduced revenue, unions could be concerned over the potential endangerment of MTA’s financial position which could, in turn, threaten their jobs and pensions if cutbacks are required. However, once those concerns are dispelled, there could be an argument made as to better safety for bus drivers as was during the initial onset of the pandemic as well as more happiness with the bus system because riders would be more content with a fare-free bus system. Furthermore, with the success of a fare-free bus system, there is the potential for an expansion of the current bus system that would lead to more jobs and more support for the MTA from local and state officials.  

MTA Officials

The biggest point of contention would come from the MTA. The MTA is its own operating body and can only be forced to create a new program if a law is passed or if its officials are on board with the plan. MTA officials would immediately be concerned over the cost of a fare-free bus system and a lack of farebox revenue. However, a plan to find additional ways to cover the costs and an outline of the other benefits from a fare-free bus system can dispel these concerns. As MTA officials are also concerned about ridership levels, a free-fare bus system would immediately bolster the number of riders in buses and potentially boost subway transit. As riders become more confident with the MTA bus system, this would ideally include an increase in confidence in the ability of the transit system overall resulting in more riders to the subway system as well. 

Multiple steps to take to mitigate push-back from MTA officials can also be pursued. First, when the Mayor recommends appointments for the City’s four spots on the MTA board to the governor, the individuals recommended should all be on-board with the fare-free bus proposal. Second, the City should work with local state legislators to expand the number of city appointees on the MTA board. As the MTA board is currently constituted, only four of the fourteen members are city appointments; the City should have at least six. Finally, the city can work with the state legislature to pass a law requiring free-fare bus transit which would require the MTA to implement the proposal. 

State Officials

State officials would have similar concerns to that of MTA officials. However, with similar methods mentioned above these concerns would also be dispelled. Governor Kathy Hochul would be receptive to the idea of free-fare bus services as it would also bolster her relationship with the city electorate and her relationship with city elected officials who would be quite responsive to the proposal. Furthermore, the state would be able to reduce costs such as a reduction in the $25 million used for school fare reimbursement. As such, the political benefits and cost-reductions in other parts of the state budget make the costs worth bearing. In addition, any state official that wants to bolster their political standing with New York City residents would be able to propose fare-free bus service and, if passed, would likely lead to political gain. 

City Officials 

City officials would likely welcome the proposal.  Due to the obvious benefit to bus riders, reduction in policing levels, and ancillary expenditure reductions in the city budget, city officials would likely see a boost in their popularity with the electorate while freeing up money that can be spent elsewhere. Neighborhoods where we expect to see the biggest ridership changes would be neighborhoods that already use the bus system as their primary source of transportation. These neighborhoods include transit deserts in the Bronx, Queens, and Brooklyn. Making fare-free buses available to these communities would further solidify existing political relationships and make potential in-roads for future challengers more difficult. 

Furthermore, the need to find additional revenue streams to help cover the cost of a permanently fare-free MTA bus system allows for politically expedient introduction of a new tax. Seattle’s “Jumpstart Tax” establishes a payroll tax on the largest corporations directly earmarked to fund economic relief and core services such as housing, local business assistance, and community development.[xxx] Seattle’s “Jumpstart Tax” applies only to businesses paying at least $7 million in annual payroll and results in a 0.7 to 2.4 percent tax on salaries and wages spent on Seattle employees who make at least $150,000 per year.[xxxi] Passing a similar tax benchmarked for New York City, would help bring in more revenue with a much lower political cost usually attributed to the introduction of new taxes. 

CONCLUSIONS AND LASTING IMPACT: 

The idea of a free-fare bus transit system in New York City is a lofty goal, but not one that is unobtainable – it requires vision and will. The lack of farebox revenue coupled with increased costs from ridership demand would be offset by revenue from congestion pricing, federal support, and potentially new revenue streams such as a New York City “Jumpstart Tax.”  This shift to fare-free would also see reduction in other city costs such as transit police, fare collection and enforcement, and school fare reimbursement. It would also expand the accessibility of the city to  low-income individuals and communities of color. 

The investment in a free-fare bus transit system also intersects with many of the new administration’s policy objectives.[xxxii] The cost of transforming the bus system into a fully-electric system would be reduced with the lack of needing to include a fare collection system. This fare-free bus system would also complement the proposed expansion of the 150 miles of new bus lanes and busways and the roll out of Transit Signal Priority Technology.[xxxiii] Furthermore, it would also help support open streets and the NYC 25×25 plan with reduction of cars that could result from the expanded use of buses. 

Overall, creating a fare-free bus system would transform the way New York City works for low-income people. It would improve the relationship of the MTA with city residents and show that New York City puts the needs of working people first.


Justin Sanchez is an Executive MPA student at NYU Wagner graduating in May 2022. He currently serves as the Chief of Staff to New York State Assembly Member Nathalia Fernadez, the President of the Stonewall Democrats of NYC, and the Chair of Hispanic and Latinx Caucus for the Young Democrats of America – in addition to being a part of the Wagner Review and the Alumni Relations Co-Chair for Wagner City Gov Network. 


Works Cited:

“2021-2022 Budget.” 2021-2022 Budget: Transportation. Town of Chapel Hill. Accessed December 1, 2021. https://www.townofchapelhill.org/home/showpublisheddocument/49829/637679177052770000.

“About Chapel Hill Transit.” About Chapel Hill Transit | Town of Chapel Hill, NC. Town of Chapel Hill, NC. Accessed December 1, 2021. https://www.townofchapelhill.org/government/departments-services/transit/about-chapel-hill-transit.

Alliance for Downtown New YorkFollow this publisher – current follower count: 15. “Downtown Alliance 2020 Annual Report.” Issuu, November 1, 2020. https://issuu.com/alliancefordowntownnewyork/docs/adny_annual_report_cover_2020_full_web_format.

“American Rescue Plan Act Formula Apportionments by State.” American Rescue Plan Act Formula Apportionments by State | FTA. Accessed December 17, 2021. https://www.transit.dot.gov/funding/american-rescue-plan-act-formula-apportionments-state.

Beekman, Daniel. “Seattle City Council Passes ‘Jumpstart’ Tax on High Salaries Paid by Big Businesses.” The Seattle Times. The Seattle Times Company, July 7, 2020. https://www.seattletimes.com/seattle-news/politics/seattle-city-council-passes-new-jumpstart-tax-on-high-salaries-paid-by-big-businesses/.

The Council of the City of New York, John Basile, and Chima Obichere, Report of the Finance Division of the Calendar Year 2021-2024 Adopted Plan of the Metropolitan Transportation Authority § (2021). https://council.nyc.gov/budget/wp-content/uploads/sites/54/2021/03/MTA.pdf.

“Downtown Connection Bus.” Downtown Alliance, December 2, 2021. https://downtownny.com/about-us/services/downtown-connection-bus/. 

Guse, Clayton. “Five-Month Free Ride Is over – MTA to Resume Collecting Fares on NYC Local Buses.” nydailynews.com. New York Daily News, August 18, 2020. https://www.nydailynews.com/coronavirus/ny-coronavirus-mta-fare-bus-boarding-covid-20200818-z3ttpwhoqza3dlymahc3uz7ry4-story.html.

Goldbaum, Christina, and Winnie Hu. “Why New York Buses Are on the Rise in a Subway City.” The New York Times. The New York Times, July 6, 2020. https://www.nytimes.com/2020/07/06/nyregion/mta-buses-nyc-coronavirus.html. 

Hess, Abigail J. “Americans Spend over 15% of Their Budgets on Transportation Costs-These US Cities Are Trying to Make It Free.” CNBC. CNBC, March 2, 2020. https://www.cnbc.com/2020/03/02/free-public-transportation-is-a-reality-in-100-citiesheres-why.html.

Kaufman, Sarah M, Mitchell L Moss, Kelsey B McGuinness, Nicolas R Cowan, Charles E Ruder, Samuel I Schwartz, Meera Joshi, Daniel L Schack, and Josh Rogers. “Transportation During Coronavirus in New York City,” July 2020. https://wagner.nyu.edu/files/faculty/publications/Full%20Report.pdf. 

“Mayor Wu Takes Steps to Expand Fare-Free Bus Service.” Boston.gov, November 17, 2021. https://www.boston.gov/news/mayor-wu-takes-steps-expand-fare-free-bus-service. 

“Moving Forward Together.” Accessed December 19, 2021. https://ericadams2021.net/wp-content/uploads/2021/06/510187209-Moving-Forward-Together.pdf.

Papa, Enrica. “Would You Ditch Your Car If Public Transport Was Free? Here’s What Researchers Have Found.” The Conversation. The Conversation, June 3, 2020. https://theconversation.com/would-you-ditch-your-car-if-public-transport-was-free-heres-what-researchers-have-found-133001.


Endnotes:

[i] The Council of the City of New York, John Basile, and Chima Obichere, Report of the Finance Division of the Calendar Year 2021-2024 Adopted Plan of the Metropolitan Transportation Authority § (2021). https://council.nyc.gov/budget/wp-content/uploads/sites/54/2021/03/MTA.pdf.

[ii] Guse, Clayton. “Five-Month Free Ride Is over – MTA to Resume Collecting Fares on NYC Local Buses.” nydailynews.com. New York Daily News, August 18, 2020. https://www.nydailynews.com/coronavirus/ny-coronavirus-mta-fare-bus-boarding-covid-20200818-z3ttpwhoqza3dlymahc3uz7ry4-story.html.

[iii] Kaufman, Sarah M, Mitchell L Moss, Kelsey B McGuinness, Nicolas R Cowan, Charles E Ruder, Samuel I Schwartz, Meera Joshi, Daniel L Schack, and Josh Rogers. “Transportation During Coronavirus in New York City,” July 2020. https://wagner.nyu.edu/files/faculty/publications/Full%20Report.pdf.

[iv] Decline in car traffic also attributed to the increase in speed and efficiency of the fare-free bus system. However, reports from other cities with fare-free buses showed an increase in speed and efficiency. 

[v] Goldbaum, Christina, and Winnie Hu. “Why New York Buses Are on the Rise in a Subway City.” The New York Times. The New York Times, July 6, 2020. https://www.nytimes.com/2020/07/06/nyregion/mta-buses-nyc-coronavirus.html.

[vi] Papa, Enrica. “Would You Ditch Your Car If Public Transport Was Free? Here’s What Researchers Have Found.” The Conversation. The Conversation, June 3, 2020. https://theconversation.com/would-you-ditch-your-car-if-public-transport-was-free-heres-what-researchers-have-found-133001.

[vii] Abigail J Hess, “Americans Spend over 15% of Their Budgets on Transportation Costs-These US Cities Are Trying to Make It Free,” CNBC (CNBC, March 2, 2020), https://www.cnbc.com/2020/03/02/free-public-transportation-is-a-reality-in-100-citiesheres-why.html.

[viii] Express bus service is excluded from this pilot as it is a premium bus service. The service is already not included with use of the unlimited metrocard and has a higher price point of service. 

[ix] “About Chapel Hill Transit.” About Chapel Hill Transit | Town of Chapel Hill, NC. Town of Chapel Hill, NC. Accessed December 1, 2021. https://www.townofchapelhill.org/government/departments-services/transit/about-chapel-hill-transit.

[x] “About Chapel Hill Transit.” About Chapel Hill Transit | Town of Chapel Hill, NC. Town of Chapel Hill, NC. Accessed December 1, 2021. https://www.townofchapelhill.org/government/departments-services/transit/about-chapel-hill-transit.

[xi] “About Chapel Hill Transit.” About Chapel Hill Transit | Town of Chapel Hill, NC. Town of Chapel Hill, NC. Accessed December 1, 2021. https://www.townofchapelhill.org/government/departments-services/transit/about-chapel-hill-transit.

[xii] “2021-2022 Budget.” 2021-2022 Budget: Transportation. Town of Chapel Hill. Accessed December 1, 2021. https://www.townofchapelhill.org/home/showpublisheddocument/49829/637679177052770000.

[xiii] “2021-2022 Budget.” 2021-2022 Budget: Transportation. Town of Chapel Hill. Accessed December 1, 2021. https://www.townofchapelhill.org/home/showpublisheddocument/49829/637679177052770000.

[xiv] “Mayor Wu Takes Steps to Expand Fare-Free Bus Service.” Boston.gov, November 17, 2021. https://www.boston.gov/news/mayor-wu-takes-steps-expand-fare-free-bus-service.

[xv] “Mayor Wu Takes Steps to Expand Fare-Free Bus Service.” Boston.gov, November 17, 2021. https://www.boston.gov/news/mayor-wu-takes-steps-expand-fare-free-bus-service.

[xvi] “Mayor Wu Takes Steps to Expand Fare-Free Bus Service.” Boston.gov, November 17, 2021. https://www.boston.gov/news/mayor-wu-takes-steps-expand-fare-free-bus-service.

[xvii] “Downtown Connection Bus.” Downtown Alliance, December 2, 2021. https://downtownny.com/about-us/services/downtown-connection-bus/.

[xviii] Alliance for Downtown New YorkFollow this publisher – current follower count: 15. “Downtown Alliance 2020 Annual Report.” Issuu, November 1, 2020. https://issuu.com/alliancefordowntownnewyork/docs/adny_annual_report_cover_2020_full_web_format.

[xix] If the free-fare bus service excludes express buses, then farebox revenue would not be zero. However, for an understanding of what the total free-fare bus service generally includes, a presumption of zero is necessary.  

[xx] NYCTA is the subsidiary of the MTA that specifically services New York City buses and subways.

[xxi] The Council of the City of New York, John Basile, and Chima Obichere, Report of the Finance Division of the Calendar Year 2021-2024 Adopted Plan of the Metropolitan Transportation Authority § (2021). https://council.nyc.gov/budget/wp-content/uploads/sites/54/2021/03/MTA.pdf.

[xxii] The Council of the City of New York, John Basile, and Chima Obichere, Report of the Finance Division of the Calendar Year 2021-2024 Adopted Plan of the Metropolitan Transportation Authority § (2021). https://council.nyc.gov/budget/wp-content/uploads/sites/54/2021/03/MTA.pdf.

[xxiii] The Council of the City of New York, John Basile, and Chima Obichere, Report of the Finance Division of the Calendar Year 2021-2024 Adopted Plan of the Metropolitan Transportation Authority § (2021). https://council.nyc.gov/budget/wp-content/uploads/sites/54/2021/03/MTA.pdf.

[xxiv] The Council of the City of New York, John Basile, and Chima Obichere, Report of the Finance Division of the Calendar Year 2021-2024 Adopted Plan of the Metropolitan Transportation Authority § (2021). https://council.nyc.gov/budget/wp-content/uploads/sites/54/2021/03/MTA.pdf.

[xxv] “American Rescue Plan Act Formula Apportionments by State.” American Rescue Plan Act Formula Apportionments by State | FTA. Accessed December 17, 2021. https://www.transit.dot.gov/funding/american-rescue-plan-act-formula-apportionments-state.

[xxvi] See Supra 

[xxvii] The Council of the City of New York, John Basile, and Chima Obichere, Report of the Finance Division of the Calendar Year 2021-2024 Adopted Plan of the Metropolitan Transportation Authority § (2021). https://council.nyc.gov/budget/wp-content/uploads/sites/54/2021/03/MTA.pdf.

[xxviii] The Council of the City of New York, John Basile, and Chima Obichere, Report of the Finance Division of the Calendar Year 2021-2024 Adopted Plan of the Metropolitan Transportation Authority § (2021). https://council.nyc.gov/budget/wp-content/uploads/sites/54/2021/03/MTA.pdf.

[xxix] Kaufman, supra note 3

[xxx] Beekman, Daniel. “Seattle City Council Passes ‘Jumpstart’ Tax on High Salaries Paid by Big Businesses.” The Seattle Times. The Seattle Times Company, July 7, 2020. https://www.seattletimes.com/seattle-news/politics/seattle-city-council-passes-new-jumpstart-tax-on-high-salaries-paid-by-big-businesses/.

[xxxi] Beekman, Daniel. “Seattle City Council Passes ‘Jumpstart’ Tax on High Salaries Paid by Big Businesses.” The Seattle Times. The Seattle Times Company, July 7, 2020. https://www.seattletimes.com/seattle-news/politics/seattle-city-council-passes-new-jumpstart-tax-on-high-salaries-paid-by-big-businesses/.

[xxxii] “Moving Forward Together.” Accessed December 19, 2021. https://ericadams2021.net/wp-content/uploads/2021/06/510187209-Moving-Forward-Together.pdf.

[xxxiii] “Moving Forward Together.” Accessed December 19, 2021. https://ericadams2021.net/wp-content/uploads/2021/06/510187209-Moving-Forward-Together.pdf.

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