Could Free Service Solve Denver’s Transit Problems?

Recent fare hikes have made Denver’s Regional Transportation District one of the most expensive public transit systems in the country, and ridership is slipping — leading some to worry about a “death spiral,” in which ridership losses and cost increases continue to worsen in a vicious cycle.

Lots of people have lots of different ideas about how to turn things around. But what if the solution were for RTD to have no fares at all?

That may sound crazy, but we’re already more than four-fifths of the way there. RTD collected $143 million in fare-box revenue last year, only enough to cover about 18 percent of its operating costs. The rest came from the 1 percent sales and use tax that funds the district and other sources, including state and federal grants.

No major American city has opted for completely fare-free public transportation. But a growing number of transit advocates in Denver and elsewhere are embracing the idea as a way to reduce road congestion, improve air quality, tackle climate change and more. In Salt Lake City, where several mayoral and city council candidates endorsed free citywide bus service earlier this year, a poll found that voters favored the proposal by a three-to-one margin.

RTD General Manager Dave Genova says he has heard the talk: “There are a number of agencies around the country, and a number of my colleagues, and we’ve engaged in this conversation about — what if public transit was free?”

Genova isn’t necessarily bullish on system-wide free service — it could potentially lead to “unintended consequences” and “huge challenges,” he says. But as the agency begins its two-year Reimagine RTD process to evaluate its services and develop plans for the future, he’s keeping an open mind.

“We’re interested in whatever we can do to make [transit] more attractive and more appealing,” Genova says.

Of course, there’s no such thing as a free ride; the $143 million that RTD currently collects in fare-box revenue would have to come from somewhere else. And operating costs would rise, since studies suggest that eliminating fares can lead to a spike in ridership of 50 percent or more — though it would save some money, too, since the agency would no longer have to pay to operate fare boxes, ticketing systems and the like. If the final price tag were, say, $300 million, the money could be raised through a 0.5 percent sales tax increase across RTD’s six-county district, or through any number of state or local tax schemes.

In many ways, fare-free public transit would mean treating the 5 percent of Denverites who take the bus or train to work every day like the other 95 percent. With the occasional exception of toll roads, drivers don’t pay a fee each time they drive on a street or highway — instead, roads are public goods fully funded by tax revenue, and free for everyone to use. Ditto the sidewalks and bike lanes used by other commuters. Why should a public service like a bus be any different?

Two transit researchers, Judith Dellheim and Jason Prince, take the question a step further in their book Free Public Transit: And Why We Don’t Pay to Ride Elevators. “The very notion of paying to use an elevator to get to the upper floors of a tall building is preposterous,” Dellheim and Prince write. “And in a certain light, so is paying for public transportation, which serves a very similar function in the city, except sideways.”

Free service isn’t an entirely new idea, even within the RTD system. Local bus service in Longmont has been free since 2014, under a program paid for by the city’s 0.75 percent Street Fund sales tax. Hundreds of other small cities around the country fund free-to-ride buses at a more manageable scale, including many of Colorado’s mountain resort towns. RTD already operates two fare-free routes, the MallRide and the MetroRide, between Union Station and Civic Center Station.

Somewhat perversely, these free downtown buses serve two of the routes most often used by some of the city’s highest-income residents. A 2016 report on transit affordability by the Colorado Fiscal Institute identified several of these “Robin-Hood-in-reverse” effects within the RTD system, including the free one-day parking offered at Park-n-Ride facilities, which are typically used by higher-income suburban riders. Bulk discounts like the agency’s EcoPasses are also typically offered to more affluent residents, while the burden of the 1 percent sales tax that funds RTD disproportionately falls on lower-income taxpayers, since sales taxes are inherently regressive.

Supporters of free transit, including newly elected Denver City Councilwoman Candi CdeBaca, believe that eliminating fares is one way to make this regressive funding structure more equitable. This summer, Denver rolled out a program that offered free ridership to teens, while RTD has taken several steps to improve affordability, including a discount program for low-income riders. Fares, however, have continued to increase, with a one-way local fare now at a highest-in-the-nation $3.

“RTD is one of those transit agencies where they very much are like, ‘We have to make money,’” says Danny Katz, director of the Colorado Public Interest Research Group. “They approach it as, they have a budget that they have to hit every year, and that really forces their hand — whereas a lot of other agencies, they have more general funds, or other things that give them more flexibility to say, ‘All right, this year we’re not going to raise fares.’”

Still, Katz says that while addressing affordability is important, RTD can also make strides by ensuring that its services are faster and more reliable. “Certainly the cheaper it becomes, the more it encourages people,” he says. “But I think you mostly see that the talk is more around service, reliability, accessibility — because those things tend to have bigger impacts.”

There are any number of ways to expand free service without eliminating fares on a system-wide basis. RTD itself experimented with free service during off-peak hours in 1979; ridership increased significantly, but federal funding for the program expired after just a year. Genova mentions other cities that have tried fare-free downtown zones and floats the possibility of a lower, flat fare, scrapping the agency’s current local-regional-airport fare structure. “What if it was just kind of nominal?” he muses. “What if it was a buck, or something like that?

“I think these could be some attractive things for people,” Genova says. “Not only a simpler, flat-fare structure, but even a lower fare. I think there’s some opportunity, and I think people might be willing to consider some funding options if we can make it more attractive.”