Will Athens continue fare-free bus service?

Athens Transit stopped charging fares at the beginning of the COVID-19 pandemic, thereby improving transit efficiency and relieving a financial burden on thousands of families. Despite these benefits, it’s uncertain if the ACC Commission will allow Athens Transit to continue their fare-free policy.

Dexter Fisher
Commissioner Dexter Fisher

Commissioners had mixed opinions about how to fund transit for the long-term at their retreat in January. Commissioners Patrick Davenport and Jesse Houle spoke up for the system’s current revenue model, but two commissioners said they wanted to bring back fares.

“We need to charge fares,” said Commissioner Dexter Fisher. “No operation can be sustained if it doesn’t have income.”

Commissioner Ovita Thornton agreed, saying that the bus route near her house rarely has any passengers. “I don’t know if it’s the best use of money,” she said.

With federal COVID-era relief funds nearly exhausted, ACC Manager Blaine Williams told commissioners they should consider supplementing the transit fund with $1 million from the county’s general fund this year.

“If you want to continue fare-free, it’s got to come from somewhere,” Williams said.

But has the fare-free revenue model reduced the amount of funding Athens Transit receives?

In this article, we’ll closely examine transit funding and ridership in Athens. We’ll also take a look at the benefits and drawbacks of the current policy of allowing everyone to ride without charging fares.

Fare-free transit: It’s more common than you might think

While most transit systems generally charge passengers a fare to support transit operations, not all transit systems are funded that way. UGA Campus Transit, for example, is funded primarily through a fee charged to all students, whether they ride the bus or not. Likewise, the Clarke County School District’s bus system is funded through property taxes, not through fares.

Athens Transit itself is mostly funded through sales taxes. This year, a 1% sales tax for transportation projects (TSPLOST) is estimated to provide the most revenue the bus system has ever had, fares or no fares.

Athens Transit revenue numbers from 2012 - 2024.
Athens Transit revenue by source and year. Data are from ACC budgets for the years 2012 – 2020 and from ACC Interim Transit Director Victor Pope for the years 2021 – 2023. 2024 is an estimate from the FY 2024 budget. You can see these data as a spreadsheet here. This chart does not include a very small amount of revenue from advertising.

Many transit systems both around the world and right here in the south are funded in ways other than the farebox. Clemson, SC, Chapel Hill, NC and Boone, NC have all been fare-free for decades. Blacksburg, VA recently joined them. Similar to Athens, Raleigh, NC and Richmond, VA have both been fare-free since the pandemic.

Out west, the city of Albuquerque, NM recently became fare-free after a two-year trial period, making it the largest city in the country to adopt this policy. Kansas City, MO was the first large US city to ditch the farebox back in 2019. 

Some of the biggest cities in the country are also considering it, at least on certain routes. For example, Boston has been experimenting with three fare-free routes since 2022 and New York City itself is in the middle of a fare-free pilot program on five routes.

Fare-free transit has been spreading around the country rapidly since the pandemic. There are a lot of reasons for that, but a big one is money.

In some cases, going fare-free actually relieves the burden on taxpayers and frees up money that could be used for transit expansion or other purposes. For example, Boone, NC has had a fare-free bus system since 2005. At that time, their fareboxes were actually costing the city more to maintain than the fares brought in.

That’s why Boone made the switch – to save money.

The high cost of collecting fares

But how is that possible? Are fareboxes really that expensive?

Yes. Athens Transit’s fareboxes are pretty worn out and would need to be replaced before the agency could start charging fares again. Interim Athens Transit Director Victor Pope estimates that it would cost about $1.6 million to outfit his bus fleet with new fareboxes, if that’s what the commission decides to do. Since these machines last about 10 years on average, purchasing them would cost Athens roughly $160,000 a year.

Worse, fareboxes are fragile machines that break often. Paying for replacement parts, repair and licensing for the boxes would cost another $100,000 a year. Once you add in ticket printing expenses (~$13,000 a year) and the cost of paying Athens Transit employees to count the cash (~$17,000 a year), the final cost of collecting fares comes to around $290,000 every year.

These cost estimates were provided by former Athens Transit Director Butch McDuffie in 2015 and have been adjusted for inflation. The $17,000 number is a more recent estimate from Pope and is similar to McDuffie’s estimate for the same expense.

In fiscal year 2019, Athens Transit raised $650,000 directly through the farebox with another $528,000 coming from UGA. Even if we add these two sources together, that’s only $1.2 million in revenue. This means that if Athens Transit brought back fares, assuming a similar amount, almost 25% of the revenue would be wasted on overhead costs.

Athens has more efficient means to raise the needed revenue for transit. For example, Sales taxes like TSPLOST are collected by the Georgia Department of Revenue at no expense to local governments. Property taxes also have a very low overhead cost (see below).

The ACC Tax Assessor’s Office has a $1.2 million budget in 2024. The ACC Tax Commissioner’s Property Tax Division, including administration costs, was funded with $684,200 in 2024. Adding those together ($1,884,200 total) and dividing by property tax revenue ($88.5 million in 2024) gives us an estimate of 2.1% for the overhead cost of property taxes in Athens.

More importantly, the local government can increase property taxes on the margins – enough to pay for the entire Athens Transit budget – for essentially no cost in dollars. Although commissioners may pay a heavy political price for doing so. Put another way, property tax overhead costs don’t change based on how high or low property taxes are set. If taxes are set higher, overhead costs would be an even smaller proportion of total revenue.

Where does fare revenue come from?

The source of the money used to fund transit also matters for social and functional reasons.

Transit riders nationwide are more likely to have low incomes and are more likely to be people of color than those who drive cars as their primary means of transportation. This is also true in Athens, a city that’s had problems with poverty for some time.

Back when Athens Transit charged riders, fares would add up to a large percentage of some peoples’ incomes every year. For example, one round trip every day for a year at $1.75 each way would cost $1,277.50, or about 10% of the income of someone living at the federal poverty line. 

That’s enough to be a significant burden.

Bus riders at Athens’ multimodal station told APN that fare-free transit helps them afford to move around the city for work, school and everyday errands like going to the grocery store.

“I ride the bus just about every day. It’s been a big help,” said Jill Fitz. “Sometimes I do Uber or Lyft when the bus isn’t running and it costs a lot.”

“It’s convenient for people on a fixed income or just struggling. It’s a wonderful thing to have something free,” said Gerome McCall.

“I take three buses a day. [That would be] a lot of money,” said Anthony Whitlock. “There’s a lot of people on the street who need food and who need to get to places, laundry or anything like that. Some people want to get jobs. It’s hard for them to travel around when they don’t have the money.”

Sales taxes like TSPLOST are often accused of being regressive and unfairly punishing to people with low incomes. Yet, SPLOST and TSPLOST put together could only take 2% of someone’s income at most, even if they spent all of their money in Athens. For someone at the federal poverty line who rides the bus once daily, transit fares would be five times more punishing than these sales taxes combined.

Effects on ridership

Not only is raising transit revenue from TSPLOST more efficient in a financial sense than charging fares, it’s more efficient in a broader sense as well. Fares have a major downside TSPLOST does not – they discourage ridership.

When things are more expensive, people tend to consume less of them. Economists model this effect on behavior as a “price elasticity.”  A rule of thumb for transit fare elasticities is called the Simpson-Curtin rule, which says you can expect a 3.3% drop in ridership for every 10% increase in fares. It works in reverse as well, meaning we can expect a large increase in ridership whenever fares are removed, assuming everything else stays the same. 

Nearly every transit system that has ever experimented with removing fares has seen a significant increase in ridership, usually between 20% and 60%. Athens in recent years has been one of the few exceptions to this rule. When Athens Transit removed fares in fiscal year 2021, ridership actually plummeted by 58%.

Athens Transit ridership numbers from 2012 - 2024.
Athens Transit ridership by year. Data are from ACC budgets for fiscal years 2012 – 2020 and from ACC Interim Transit Director Victor Pope for the years 2021 – 2024. You can see these data as a spreadsheet here.

Maybe this wasn’t so unexpected. It makes sense Athens would have a smaller increase in ridership after going fare-free than other cities because so many of the riders here already rode for free before the rate change. Athens Transit has allowed kids under 18 to ride for free since 2016 and UGA students, staff and faculty (who make up over half the riders on Athens Transit) have always been able to board the bus at no cost.

Of course, the main factor affecting ridership in fiscal year 2021 (which began in July 2020), was the COVID-19 pandemic. The University of Georgia shut down, as did nearly everything else, and people became afraid to enter enclosed spaces in the presence of other people. 

It was perhaps the worst time in history to test out fare-free transit.

Yet, the pandemic was the reason Athens Transit removed fares in the first place. The idea was to have passengers board from the rear door, bypassing the fareboxes and allowing bus drivers to maintain 6 feet of social distancing. Another silver lining of the pandemic was a massive infusion of federal dollars through the CARES Act, which paid for all Athens Transit expenses in 2021 just as the American Rescue Plan paid for all expenses in 2023.

As the pandemic began to ease, inflation skyrocketed and unemployment dropped to historically-low levels. That caused organizations of all kinds to have difficulty hiring. Despite the huge infusion of federal funds, Athens Transit was forced to cut routes and hours of operation simply due to a lack of bus drivers. These service hours have yet to be restored.

Pope told APN that they were forced to cut over 4,000 bus hours of operation due to the lack of drivers. This has prevented ridership from returning to pre-pandemic levels even though the routes still in operation are seeing more passengers per hour after removing fares, according to Pope.

“We would see much greater ridership numbers than before the pandemic if we had the workforce,” Pope said. “Maybe back to 1.6, 1.7 million riders a year or more.”

Other benefits of fare-free transit

We’ve already talked about how fare-free transit reduces costs and increases ridership, but it has a number of other benefits as well.

Fare-free transit allows for faster boarding and as a result, buses tend to be on-time more often in fare-free systems. It’s also easier to understand for riders and less intimidating for those who don’t speak English or have never been on the bus before. It may even increase sales tax collections because people who ride the bus will have more money to spend at local shops. That could lead to economic growth.

If fare-free transit helps to get cars off the road, it could also reduce air pollution and car accidents, thereby improving public health.

The downsides of fare-free transit

For all its benefits, fare-free transit does have some downsides.

On large transit systems with a lot of riders, fareboxes can provide needed revenue that would be difficult to make up in any other way. Although some large cities have ditched their fareboxes recently, it’s usually challenging for them to even consider it. But this isn’t the case in Athens. Fares provide little in the way of revenue here which is easily replaced through TSPLOST as we are currently doing.

Another downside is that fare-free transit can sometimes be a victim of its own success. If too many riders suddenly hop on board a system that’s not ready to accommodate them, riders who would have been willing to pay a fare can get upset. With so many new riders boarding, buses can start being late and the whole system can suffer. This isn’t an issue in Athens either.

“Problem” riders

One issue Athens does have are “problem” riders. These are people who cause problems for other riders through disruptions, noise, foul smells or violent acts. Loud college students are sometimes considered problem riders in some areas. People experiencing homelessness are also sometimes problematic and this group does tend to ride the bus more often after a system removes fares.

Problem riders can sometimes bother other passengers so much that core ridership suffers. They may also cause major outbursts or disruptions that could ruin a bus driver’s day. If that happens often enough, these badly needed drivers might quit to pursue other careers. 

This is a problem that seems to have gotten worse since the pandemic, but Pope says the lack of fares isn’t to blame.

“Transit is sort of like a microcosm of the community,” Pope said. “We have seen an uptick in drug-related issues and in unhoused riders. But people are using it for transportation, for legitimate purposes in a lot of cases. I don’t necessarily know that fares would influence that. I think you would still see about the same number of behavioral issues but you’d see decreased ridership.”

Pope admits that Athens Transit has had difficulty recruiting and retaining bus drivers recently, as have most agencies. But he doesn’t think it’s because of fare-free transit. In fact, fare-free might be making this problem easier to manage, not harder.

“There’s a perception that [fare-free and driver dissatisfaction] are related, but I don’t necessarily know that. I drove the bus myself for three years. During that time, my number one issue would have been people arguing about the bus fare. When I had issues on the bus, it was usually someone upset for having to pay a fare. I don’t know [drivers] would find they had fewer confrontations [if we brought back fares]. It might even add a point of conflict.”

Moving forward

Transit staff are planning to keep fares at zero for at least the next year, but the ACC Commission will make the final decision. 

While TSPLOST is providing the most money Athens Transit has ever had, there are many different ways to spend it. The transit TSPLOST project also includes an idea for new transit hubs throughout the county which have the potential to dramatically improve the route structure and increase rider satisfaction, but they will be expensive. The local government will probably spend a significant chunk of transit revenue on this project over the next few years, meaning there would be less to support transit operational costs in the meantime.

This is why staff are proposing supplementing Athens Transit with about $1 million in general fund revenue this year.

Maintaining fare-free service might require a robust investment in the next TSPLOST, which voters will consider in 2027. If Athens chooses to make the investment, we can expect to see increased transit ridership and reduced transit operational costs. This will directly benefit the poorest among us while providing for a more efficient, easier to use bus system.

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