Transit Advocates Are Wrong About Free Fares

The general consensus among transit advocates and other transit pundits has been against free buses. Matthew Yglesias has consistently argued against the proposal, largely basing his critiques on the work of transit experts Eric Goldwyn and Alon Levy, who are also both critical. I respect all of these guys a lot when they talk about public transportation. Say what you will about Yglesias, but he certainly cares a lot about transportation issues. For their part, Goldwyn and Levy are experts to the max. Their work at the Transit Cost Project and NYU’s Marron Institute is incredible and innovative, and I would recommend reading everything they write. That being said, they are all wrong about this. Free buses are a smart, sensible transportation policy in New York City. Zohran Mamdani was right to run on it and should try to implement it.

The most significant critique of Mamdani’s proposal is that it will cost too much money and that those funds should be used for other transportation policies first. Bus fares accounted for a little under $800 million of the MTA’s budget in 2024, although this was much higher before the pandemic at $1.072 billion in 2019. However, it is incorrect to simply subtract that number from the MTA’s budget and say that that’s the fiscal effect. Many bus riders will transfer to the subway, where they will then pay the now $3.00 fare anyway. However, some subway riders may choose to take a bus route instead, as it would be free. These effects are really hard to predict, as there’s not great data on the percentage of bus trips that end or start with transfers, and any rider’s decision to switch routes is complicated. There are several estimates of the total budget effect floating around out there, with Goldwyn estimating up to $1.4 billion (having adjusted 2019’s data to 2026) and economist Charles Komanoff estimating $630 million. The NYC Independent Budget Office, which has produced the most detailed budget impact analysis I have seen, estimates about $650 million, using 2022 data. The IBO estimates that 16% of bus rides end with a subway transfer, but I can’t find any justification for that specific number. Perhaps a more competent OMNY operator would help provide this data (I’m looking at you, Cubic), but that’s a topic for another article.

Regardless, it is clear that free buses would be a substantial hit to the NYC budget, and another source of sustainable revenue needs to be identified. Goldwyn makes the correct point that simply eating the cost would result in much worse transportation quality. A transit agency needs money to run enough buses, hire enough drivers, and perform all the other important roles that make a functioning bus network possible. With less money, fewer buses run less frequently, resulting in a system of much lower quality. Importantly, quality matters more than cost according to bus riders. High-quality public transportation requires funding, and usually, fares are the easiest and most sustainable way to maintain that funding. As Alon Levy recently noted, this whole argument is pointless because everyone is arguing over money that does not exist, especially since the Speaker of the City Council has come out against free buses, and Hochul does not seem to want to raise taxes anytime soon. So what is there to be done? Well, it’s a good thing that Zohran has a source of money under his control that does not require state approval and also aligns with his broader transportation goals. Parking. 97% of New York City’s parking spaces are completely free, and by pricing them at an average of $3.47 per spot per day, the city would add $3.8 billion to its budget, more than enough to pay for free buses and a host of other transit proposals. This seems to be by far the most likely pay-for, and any analysis of free buses should consider it. This fits perfectly with his recentering of transit users in the city’s politics, especially with a model of dynamic prices, which would charge those living in the most affluent, transit-rich areas the most, as this is where demand for parking would be the highest. Space in Manhattan is not cheap, so why are we giving it away for free, especially to the rich? One of the most common critiques of free fares is that they do not prompt many car owners to switch to riding the bus; however, when combined with dynamic metering, there would likely be a significant modal shift.

Another dominant criticism (frequently leveled against) of free buses is that they fail to address the actual problems that riders have with public transportation. New York City buses are unreliable, slow, and infrequent. You can’t accurately time your trips, requiring you to leave either ridiculously early or risk arriving ridiculously late. Again and again, transit riders will tell you that they would rather have a fast and frequent bus than a free one. This matters a lot, and it’s the reason why Yglesias points out that free transit is the preferred policy solution of politicians who aren’t actually serious about improving transit. However, free buses address the problems of speed and reliability. No fare collection allows for all-door boarding, which significantly reduces dwell times at bus stops. Bus stops increase the risk of bunching, are sources of variability that can derail bus schedules, and generally slow down the overall time. Bus advocates are constantly calling for the expansion of all-door boarding for this reason. It aligns with international best practices and addresses many of the issues with the NYC bus system. Fare collection for all-door boarding is much more difficult and would require large-scale changes in New York’s transportation infrastructure. There are generally two options

First, one could build subway-like stations, with turnstiles for fare collection, around bus stops, like many of the highest-quality bus systems do (Bogota and Mexico City are good examples). This is clearly the most preferable and probably the best option in the long term. However, that would also require a significant amount of funding, and New York City has proven itself to be particularly inefficient at building transportation infrastructure cost-effectively. That is its own discussion, but it seems obvious that this type of station is infeasible without significant expansions of state capacity, at least in the short term.

Second, one could have a system of randomized fare checking. Your fare would not always be checked, but frequent fare inspection combined with an expensive enough fee would result in most (not all) customers. This is how Germany does fare collection, in both the subway and bus systems, and it works well, IF you have adequate infrastructure. Importantly, New York City does not. We do have a system of fare inspection, but it does not work well. OMNY has been woefully inadequate at this (again, I’m looking at you, Cubic). The fare inspection machines do not recognize individuals who have reached their weekly fare cap and do not work with tap-to-pay devices, requiring those who have used tap-to-pay (most people) to prove they have paid through their banking apps, which OMNY often messes up. New York City has a lot of work to do in the areas of infrastructure costs and subcontracting, but these issues do currently exist and cannot just be handwaved away. If you want universal all-door boarding, which transit experts agree (well, not Janno Lieber) is ideal, free buses seem to me to be by far the most realistic way to accomplish it, at least in the short term.

There is another, final point that I think is even more important, and Yglesias should have already realized this. Free buses were an electable policy. Polls found it had support between 60-72%. Zohran managed to radically change the electorate of a primary with traditionally low turnout, with a campaign that, in part, focused on transit reform. It is also important to note that Mamdani is not offering free fares as a cure-all. He is also planning to rapidly expand bus lanes and a host of other pro-transit policies. I understand the skepticism about free buses. But it is misplaced in the context of New York City, Mamdani’s mayoral campaign, and his future governance.