UCLA Institute of Transportation Studies

In this report, we examine both the substantial research literature on transit pricing and use and literature on free- and reduced fare (FAR) programs. In general, we find that FAR programs can take many forms, and the idea of “fare-free” transit is far from a one-size-fits-all proposition. Second, while reducing or eliminating fares does indeed increase ridership, all else equal, transit research has consistently found that riders tend to be more service elastic than fare elastic. In other words, they tend to respond more to service improvements than price reductions, which means that, at the margin, money “spent” on fare-free programs (in the form of foregone revenues) may attract fewer riders than if that money were put toward improving service. And third, the social equity dimensions of fare-free transit are many, ranging from considering the share of fare-free benefits that flow to higher-income riders to the potential racial equity benefits of reduced fare enforcement policing on transit.