AGENDA #4B(1)
BUDGET WORKING PAPER
TO: W. Calvin Horton, Town Manager
FROM: R. Scott McClellan, Interim Transportation Director
SUBJECT: Fare-free Service Option
DATE: April 12, 2000
A proposal for operating transit services on a system-wide fare-free basis is being considered for fiscal year 2000-01 by Chapel Hill, Carrboro, and the University. This paper provides details on this option, compares it to the current cost-sharing arrangements, and describes the advantages and disadvantages of the fare-free proposal.
If adopted, this option would allow anyone to ride Chapel Hill Transportation’s buses without paying a fare. This would not include Tar Heel Express shuttle buses operated for special events. We would also still require individuals to purchase passes or tickets for use on the evening and Sunday Shared Ride services to avoid what would essentially be free taxi service.
Under the fare-free service option, the sharing of cost between Chapel Hill, Carrboro, and the University would be somewhat different than our current formula. It would include a step that assigns the University the total net cost for specific service it has requested. This would include two campus shuttle routes and some service to park and ride lots. The balance of net cost would be shared among the partners based on the same population-based formula we have used for several years. The attached table shows how cost would be shared under this option. The current formula simply divides net cost between the partners using the population.
Based on some experience with fare-free systems, we estimate an increase of 5-10% in ridership system-wide. The limited fare-free service on the campus shuttles and park/ride routes have had mixed results. The campus shuttle routes have experienced very high ridership. The increase in ridership has been a combination of new riders and existing riders who previously used other buses to get around campus that charge a fare. We estimate that this “route jumping” accounts for 60-70% of the increase in riders on the campus shuttles with the remainder (about 30%) being new riders. During the first year of fare-free park and ride service, the University provided free bus passes to commuters who live outside a specific radius of campus. Although ridership on these routes did increase, the number of trips per week made by individuals with these free passes was low; in most cases, well below the six trips per week that make the use of the pass cost effective. The result was the University paid significantly more per trip by issuing the passes than if the full cash fare were paid. During the second year of this program, the University issued free bus passes and we agreed to invoice them monthly by tracking with our fareboxes the actual number of trips made.
Another suggestion is to offer fare-free transit service just for students and have them show their UNC ONE cards. We considered this option and discovered that the magnetic stripe on the UNC ONE is not compatible with our fareboxes. We also considered issuing students bus passes, but felt the risk of fraudulent use was too great. If we were to distribute 20,000 free passes, some could attempt to sell the passes for profit.
The expected advantages and disadvantages of a fare-free service transit system include: