Tallin, Estonia’s Bold Experiment with Free Public Transit

The Eastern European city found a way to offer free rides to citizens for a small cost to government. The U.S. has tried it before. Will cities try it again?
by | May 2014
Tallinn, the capital of Estonia, stopped collecting fares from residents a year ago.
Tallinn, the capital of Estonia, stopped collecting fares from residents a year ago. Wikimedia.org/JKB
 

This story appears in Governing's annual International issue.

What if big-city transit systems were free? What if you could board a bus or train at one end of town, ride all the way to the other end and back, and not have to pay a cent for it? How would that affect the practicalities of urban life in America? The list of possible outcomes, bad ones as well as good ones, is a long one.

It could be that enough cars would come off the road to create a substantial decline in carbon emissions. Low-income residents might have access to job opportunities that they never had before. And there might be a sustained boom in land value and development along the routes. Those are the pleasant and plausible scenarios.

Here are the bad ones: A flood of new passengers might crowd onto the transit system, requiring additional equipment and actually creating new traffic problems and longer commute times. Buses and subways could become de facto homeless shelters. Residents might start taking the bus instead of walking or bicycling, the exact opposite of what public health advocates want them to do. And free transit could turn out to cost so much that the local government would have to halt the program out of simple economic prudence.

More than likely, some of these things would happen, both good and bad. We don’t know for sure, because no major American city has ever committed itself to full-fledged free public transportation.

But an increasing number of cities around the world are looking at some version of this idea, and the movement even has a world headquarters: Tallinn, the capital of Estonia, which stopped collecting fares from residents a year ago and has local officials raving about the results. Since Tallinn made its big move, the city has hosted two conferences on the free transit idea, and activist groups supporting it have sprung up on every continent. Paris is now looking into a fareless experiment as a weapon against air pollution.

The results of this country’s limited free-fare ventures have been mixed. The best known have been in Seattle and Portland, Ore. Both went to no-fare zones surrounding the downtowns in the 1970s. Both ended the experiments in the same month, September 2012.

Portland’s free transit system might be described as a victim of its own successes. It was the creation of Mayor Neil Goldschmidt, who decided that a fareless zone in central Portland would be a boon to tourism and economic development, as well as an aid to low-income residents of the inner city. The zone, initiated in 1975, was (and remained) the largest area of its kind created in North America.

Within a couple of decades, almost everything that Goldschmidt had hoped for came to pass. Downtown Portland was vibrant again, with more than 1,000 separate businesses operating inside its confines. Property values soared. Tourists came. About the only goal that became irrelevant was the goal of no-fare zones as a boost to poor people. By the 1990s there were few enough of them in central Portland that the numbers hardly made any difference.

One can argue that free-fare transit didn’t determine what happened in Portland. Quite likely, downtown would have come back even if the fareless zone had not existed. Still, it’s plausible to allow the experiment at least a little credit for the resurgent night life and thriving urban mall that became landmarks of the central city even as free fare continued its extended run.

In the 2000s, though, it gradually became clear that the fareless zone’s days were coming to an end. Downtown didn’t need the help anymore, and the seemingly modest cost of the program (about $3 million a year) represented money that the metropolitan transportation authority needed to plug widening holes in its overall budget. So the fareless zone died at the age of 37, its passing unlamented even by many of the city’s transit advocates.

Seattle’s story was a little different. The country’s seventh-largest transit system instituted a free-fare region in 1973 to boost tourism and offer a break to the many low-income residents who still crowded into the center city blocks around historic Pioneer Square. The area didn’t bloom quite the way central Portland had, and after nearly 40 years, the venture was catering in large part to an underclass constituency that lacked the political influence to preserve it. Transit advocates wanted to impose a new regionwide car tax, and the only way they could do that was to agree to drop the free-fare zone, for a savings of about $2.2 million. Advocates for the poor staged a funeral for free transit on the day before it expired.

What happened in Portland and Seattle seemed at first to mark the end of large-scale free-fare experiments in big cities, but on the other side of the developed world, Tallinn soon proved them wrong by launching a project more extensive than either of those cities ever envisioned. Since January 2013, any resident of Tallinn has had the option of riding the city’s buses and trolleys without paying anything.

Tallinn is the largest city in Estonia, with a population of about 430,000, and while it does not have a high global profile, it is one of Europe’s most affluent and technologically advanced cities, the birthplace of both Skype telephone service and online voting. It can afford a little transit experimentation.

What did Tallinn expect to gain by going fareless? Generally not the things Neil Goldschmidt talked about in Portland in 1975. According to the global cities website Citiscope, which has offered the most extensive coverage of the Tallinn experiment, the leaders there mostly wanted to get people out of their cars to reduce traffic congestion and ease up on carbon emissions. “We are frequently asked why we are offering free-of-charge public transport,” the mayor of Tallinn told Citiscope. “It is actually more appropriate to ask why most cities in the world still don’t.”

Whether the project is meeting its stated goals remains a subject of debate. After nine months of fareless transit, the city announced that car traffic was down 15 percent and the number of transit users was up by 14 percent. In addition, Tallinn officials reported that the average speed of cars on its roads had increased -- a partial loosening of gridlock.

At the same time, a study by the Royal Institute of Technology in Sweden reported a much different result: Transit ridership was up just 3 percent, and car traffic was down by an even smaller amount. The institute also found no change in the average speed of vehicular traffic. It’s now working on a longer-term study for release later this year.

Whatever the surveys ultimately show, the dollar cost of Tallinn’s free transit experiment isn’t that large. To ride for free, you have to be an official resident of the city—tourists still pay to get around. Residents have to buy a citizenship permit before they can use the public system, and enough people have bought them to cover most of the cost of eliminating fares. The net loss to the city’s treasury is estimated at an annual 2 million euros -- a little less than $3 million.

The cost is made more manageable by the fact that Tallinn was paying about 70 percent of its transit budget from public funds even before it went fareless. The stretch from 70 percent to full fareless funding proved not to be that painful.

It turns out that the size of a city’s existing transit subsidy is the most important factor in determining whether a fareless experiment is even feasible. Asian cities such as Hong Kong and Singapore are dependent on passenger fares for the bulk of their transit budgets. Ripping out the farebox would be prohibitively expensive for them. But most American cities are more like Tallinn:

Fares cover a relatively small portion of their transit costs. Public subsidies make up a much greater portion. In that respect, some of the largest cities in this country are relatively well positioned financially to try a fareless experiment if they find it attractive for other reasons.

Despite the end of the Portland and Seattle experiments, fareless transportation does still exist on a limited basis in a few American cities. Miami has had a fareless automated people mover running on elevated tracks above a four-mile stretch of its downtown since 2002, and has attracted a respectable ridership.

Jacksonville has a similar system, which it calls the Jacksonville Skyway. Baltimore launched four fareless downtown bus routes in 2011. Salt Lake City continues to run a fareless system downtown, although city officials have proposed eliminating it at various times in the past few years.

Smaller cities such as Corvallis, Ore., and Chapel Hill, N.C., home to large student populations, have found ways to eliminate fareboxes from their transit systems. The experiment in Corvallis is perhaps the most interesting one. In 2011, that city began charging a Transit Operations Fee on its individual households, payable with the regular water bill. In 2013, the monthly charge for a single-family residence was $3.80. By paying that mandatory amount each month, every citizen of Corvallis (and visitors to town) can ride on buses anywhere in the city for free.

Corvallis is a city of only 54,000 people. Chapel Hill has 58,000. No city in this country anywhere near the size of Tallinn has dared to launch a fareless experiment covering its entire territory. Will the idea return in the United States anytime in the foreseeable future? It seems unlikely. But it’s a reasonable conjecture that before too long, there will be Tallinn-style experiments popping up in other large cities in the developed world.

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