Metro CEO Phil Washington recently announced that a new Metro exploratory task force would begin working this month on developing a proposal — called the Fareless System Initiative — to eliminate fares for all riders on Metro buses and trains.

The task force aims to deliver a recommendation to Phil and ultimately the Metro Board of Directors by the end of 2020 with a decision by the Board whether to go forward soon thereafter in the new year. Here’s the Source post covering the news.

No other large transit system in the world has gone entirely fareless and we see this as a cornerstone of our pandemic recovery efforts. Quite understandably, our riders and stakeholders — and our own employees — have been asking questions about fareless transit via the Source and social media. 

Here are some of the most frequently asked questions and the answers we can provide at this time:

Wouldn’t free fares lead to more homeless on the Metro system?

This is one of the foremost items that the task force will be studying. We know it’s at the top of the list in terms of rider concerns about fareless transit.

We do believe it’s important to emphasize that homelessness is not just a Metro problem — it’s a longstanding regional issue that spills over onto our system. We already know that having fares is not stopping the unhoused from using our system.

We need to learn more about how best we can compassionately patrol the system, making it safe for all riders and how we can expand existing efforts by Metro to help connect the homeless to social services and shelters. Ultimately, we want to work with our community partners so that we can find a solution that goes beyond the Metro system and provides a consistent fare system across the entire region.

We’ve had some success on this front in recent months. Metro law enforcement and social services staff helped shelter nearly 500 people between March and June (we’ll have more recent numbers soon) through its Operation Shelter the Unsheltered. But there’s no denying it’s a tough issue and there’s limited shelter space in our county and region. The solution will be a multi-jurisdictional effort, for sure.

Why pursue this now during a pandemic that has caused serious budget challenges at Metro?

We know our local economy and low-income residents are hurting from the ongoing pandemic. We see fareless transit as an economic relief tool that will put money back in peoples’ pockets and help sustain the local economy during the pandemic recovery and thereafter.

The median household income of Metro riders is low — $17,975 for bus riders and $27,723 for rail riders, according to a customer survey conducted by Metro in fall 2019. We know that low-income people have been hit especially hard by the virus in terms of their health, jobs and overall ability to pay bills.

From a poll released this week by NPR, Harvard and the Robert Wood Johnson Foundation:

“At least half of households in the four largest U.S. cities—New York City (53%), Los Angeles (56%), Chicago (50%), and Houston (63%)—report facing serious financial problems during the coronavirus outbreak. Serious problems are reported across a wide range of areas during this time, including depleted household savings, serious problems paying credit card bills and other debt, and affording medical care.”

It’s also worth mentioning that a regular Metro monthly pass, for example, costs $100 — or $1,200 over the course of a year. That is a big cost for many households — even ones above the poverty line that may not qualify for discounted fares. We also know that transportation is the second largest expense in households according to the U.S. Bureau of Labor Statistics.

Metro CEO Phil Washington views fareless transit as akin to a tax cut for low-income families. And the money that families save on transit will also likely be injected back into the local economy via purchases made — with some of that money coming back to Metro via sales taxes.

Consider a household in our county where multiple people have to purchase a transit pass. Fareless transit could make a huge difference in these homes in terms of saving money and providing more ability to pay bills and withstand the loss of income. We think in some households fareless transit could mean the difference between staying housed and being homeless. 

We also want to know more about the impact of putting money back into riders’ pockets. We think that some of that money would be spent locally and come back to Metro via sales taxes.

Would Metro consider another sale tax ballot measure to pay for fareless transit?

Absolutely not. Metro does not intend to, nor will it pursue another sales tax measure to fund fareless transit.

The agency is already the beneficiary of four sales measures approved by L.A. County voters in 1980, 1990, 2008 and 2016. Many of the 88 cities in L.A. County are either at the sales tax limit of 10.25 percent or nearing the limit  — so pursuing another sales tax is a moot point and non-starter.

Can Metro really afford this?

Yes, we think it’s financially feasible but need to assemble a detailed plan. In recent years prior to the pandemic, Metro collected about $250 million to $300 million in fares annually. In fiscal year 2019, the last full year before the virus hit, fares covered 13 percent of the costs of operating bus and rail service. That percentage has been in decline at most agencies for the past 20 years as costs have risen.

We believe there will be a cost savings from not having to collect fares in terms of equipment savings, the costs associated with fare cards and collecting cash from vending machines and fare enforcement, including the cost of Metro’s Transit Court, which mostly deals with fare evasion.

The task force will determine the amount of those savings. To be clear: we plan on retaining staff (see below).

Advertising and other revenues are another possible source of funding. We’ll study that.

We also believe there will be a very real opportunity to use state and/or federal grants to help pay for fareless transit.

Earlier this summer, Rep. Ayanna Pressley and Sen. Ed Markey, both of Massachusetts, introduced a bill that would authorize $5 billion in federal funding each for “Freedom to Move Grants.” These grants would help transit agencies pay for free fares and pay for the kind of physical upgrades that would improve service (bus lanes and traffic signal priority, for example).

There is real momentum for fareless transit around the country and we think state/federal grants are something that will happen. If so, the agencies that will get that money will be the ones with a plan. LA Metro intends to be at the front of the line with our plan.

Why would the state and/or federal government want to spend money on fareless transit?

We believe that fareless transit is easiest and quickest way to get more people to take transit instead of driving solo and causing more traffic. That’s our job, after all — to provide mobility and reduce traffic.

That would give the state or the feds considerable bang for their buck in terms of improving transit ridership, freeing up space on local roads and reducing smog and greenhouse gases. These are already state and federal goals as a part of their efforts to reduce smog and the greenhouse gases that cause climate change.

How much of Metro’s operating costs are covered by fares?

As mentioned above, Metro has collected about $250 million to $300 million in fares in recent years prior to the pandemic. In fiscal year 2019, the last full year before the virus hit, fares covered 13 percent of the costs of operating bus and rail service.

That percentage has been in decline for the past 20 years and is unlikely to change without a significant increase in fares. Problem is, higher fares usually result in less riders.

Does Metro really think that going fareless would boost ridership?

Yes. We know that the first Metro sales tax measure — Prop A in 1980 — included funds to cut fares from 85 cents to 50 cents for three years.

The fare cut went into effect in 1982 and lasted until 1985. In that time, ridership went from about 359 million boardings a year to more than 500 million. After fares went back up to 85 cents in 1985, ridership dipped for the rest of the 1980s.

So that’s a good local example. The task force will look at other examples (Denver and Austin experimented with fareless transit in the ‘70s) and also study what a fare increase would do to Metro ridership.

In our experience, a fare increase usually depresses ridership — and the fare increases hit our low-income riders the hardest as they often have no alternative to transit.

What would happen to Metro staff involved in fare collection if Metro went fareless?

As mentioned above, we’re not looking to reduce staff as part of the fareless effort. The task force will study redeploying employees who work in different aspects of fare collection.

How is fareless transit related to Metro’s work on congestion pricing?

Metro is conducting a Traffic Reduction Study to determine if a traffic reduction program in L.A. County is feasible — and whether it could make it easier for everyone to get around no matter how they travel. This pilot will consist of managing roadway demand through congestion pricing tolls and providing more quality transportation options.

Providing fareless transit with revenues generated from congestion pricing may be analyzed as one option. In any traffic reduction scenario, transit improvements will likely be needed. Making transit easier to access and making it fareless could be a way to do that. 

Upon the anticipated completion of the study in spring 2022, a traffic reduction pilot program concept and implementation plan will be brought to the Metro Board for consideration in partnership with one or more cities.

To be clear: we intend to pursue fareless transit regardless of what happens with the Traffic Reduction Study. These efforts will be coordinated accordingly. 

Is the Fareless System Initiative a way to take the focus away from the bus and rail service levels that Metro is proposing for the rest of this fiscal year?

No.

Metro has proposed continuing to run its current level of bus and rail service for the rest of the fiscal year (which ends June 30, 2021) while ridership recovers from the pandemic. At present, ridership is a little more than half its usual levels but we’re running about 80 percent of our normal service.

The proposed service levels are in direct response to the pandemic and demonstrate Metro’s efforts to be financially prudent during a crisis. Make no mistake: we are also proposing to spend well over $100 million on both short- and long-term bus projects, including our NextGen Plan to make buses more frequent and faster in the future.

What about beyond the pandemic? If Metro eliminated fares would there still be money to expand service if ridership increased?

That is absolutely something we need to study as our system is expanding via new bus and rail projects. We do not want to limit ourselves when it comes to the ability to deliver fast, frequent service — which is the bedrock of the agency’s strategic plan (called Vision 2028).

Again, we believe state/federal grants and cost savings may pay for a big chunk of fareless transit. We also believe that even without fareless transit, bus and rail agencies across the U.S. will need stable funding from state and federal governments to maintain and improve service.

In summary, there is plenty of work to do. There are no shortage of big questions to be answered. We know there are obstacles. We also don’t see that as an excuse not to try.