Free public transit in Tallinn is a hit with riders but yields unexpected results

24 Jan 2014 by Sulev Vedler, Cityscope
A year ago this month, Estonia’s capital became the world’s largest city to offer free transit for all its residents. Photo Vallo Kruuser

TALLINN, Estonia — Last January, Tallinn, the capital city of Estonia, did something that no other city its size had done before: It made all public transit in the city free for residents.

City officials made some bold predictions about what would result. There would be a flood of new passengers on Tallinn’s buses and trams — as many as 20 percent more riders. Carbon emissions would decline substantially as drivers left their cars at home and rode transit instead. And low-income residents would gain new access to jobs that they previously couldn’t get to. As Mayor Edgar Savisaar likes to say, zeroing out commuting costs was for some people as good as receiving a 13th month of salary.

One year later, this city of 430,000 people has firmly established itself as the leader of a budding international free-transit movement. Tallinn has hosted two conferences for city officials, researchers and journalists from across Europe to discuss the idea. The city has an English-language website devoted to its experiment. And promotional materials have proclaimed Tallinn the “capital of free public transport.”

The idea has been very popular with Tallinners. In an opinion poll, nine out of ten people said they were happy with how it’s going. Pille Saks is one of them. “I like free ride,” says Saks, a 29 year-old secretary who goes to work by bus. “I have a car, but I don’t like to drive with it, especially in the winter when there is a lot of snow and roads are icy.”

Different reads on ridership

What’s less clear on the first anniversary of free transit in Tallinn is whether it has actually changed commuting behavior all that much.  Mayor Savisaar says it has. He points to numbers from early last year, showing that traffic on the biggest crossroads had decreased by 14 percent compared to a week shortly before the policy started. He has also cited substantial increases in transit riders. “We are frequently asked … why we are offering free-of-charge public transport,” Savisaar told a gathering of officials from Europe and China in August. “It is actually more appropriate to ask why most cities in the world still don’t.”

But researchers at the Royal Institute of Technology in Sweden who are evaluating the program found more modest results. They calculated an increase in passenger demand of just 3 percent — and attributed most of that gain to other factors, such as service improvements and new priority lanes for buses. In their analysis, free pricing accounted for increased demand of only 1.2 percent.

What’s more, they found that traffic speeds in Tallinn had not changed — a sign that drivers were not shifting over to riding transit as intended. Actually, the researchers said, if any modal shift is happening, it’s that some people are walking less and riding transit more.

Their study notes criticisms of free transit as a “second-best pricing scheme” for discouraging automobile use, less effective than increasing the price of parking, gasoline or using the roads.

However, the researchers did find evidence of social benefits in the form of improved access to the city. Of all the districts in Tallinn, transit ridership jumped the most in Lasnamäe, a densely populated area with high unemployment and a large ethnic minority population of Russians. In Lasnamäe, transit ridership increased by 10 percent.

Experiments around the world

Tallinn isn’t the first city to experiment with free transit. Across Europe, a number of smaller cities have done it, dating back to the late 1990s. Templin, Germany was one. In France, there was the city of Châteauroux and Aubagne and some surrounding municipalities. Ridership in all of those places increased substantially when fares went away.

The most closely watched was Hasselt, Belgium. After Hasselt made its buses free in 1997, ridership increased more than tenfold. Ultimately, that wasn’t sustainable. Facing budget problems last year, Hasselt reintroduced fares of €0.60, although young people, seniors and those receiving public benefits can still ride for free.

Targeted free ridership of the sort Hasselt has got now is much more common around the world. Many cities and college towns in the United States have free “circulator” buses on downtown or campus routes. Singapore is experimenting with free train rides early in the morning to relieve crowding during the morning rush hour. And Chengdu, China has offered a mix of all these perks: free rides for seniors, free rides on 44 central bus lines and free rides from 5 am to 7 am.

What sets Tallinn’s experiment apart is its size and Tallinn’s status as a European capital. As the birthplace of Skype and online voting, Tallinn also has a reputation for innovation. So there’s a feeling, at least among advocates of the idea, that if free transit can work here, maybe it can work in other large cities.

Joining the movement

The Social Democrats, an opposition party, first floated the idea of free transit in Tallinn in 2005. It wasn’t taken seriously at first. But later, a former mayor, Hardo Aasmäe, brought up the idea again in a debate in the office of a newspaper. That was noticed by deputy mayor Taavi Aas, who thought it was worth developing further. A 2010 survey of transit riders offered more encouragement: 49 percent of respondents expressed dissatisfaction with fares, more than twice the number who complained about crowding and frequency of service.

Triin Rannar is one of 10,000 people who registered as a Tallinn resident after the offer of free transit began. Rannar commutes by bus to work and estimates she now saves 23 euros a month. Photo Vallo Kruuser

There was money available to invest. The construction of public water and sewer infrastructure was about to end, so it was possible to finance public transport with funds that previously had gone into construction. The merger of two municipal transit companies, one that ran the buses and the other the trams and trolleybuses, also saved some money.

Mayor Savisaar unveiled the idea to make public transport free in the beginning of 2012. Savisaar said it would relieve traffic jams and reduce the number of accidents. “And what’s most important,” he explained, “free ride will provide better access to public transport to families in economically difficult situations.”

Opponents called the idea stupid. Some said the money would be better spent on building new kindergartens. Others said if there was no charge then homeless people would ride buses all day and make travel uncomfortable for everyone else.

The city administration put the question to a referendum conducted among Tallinn residents. Turnout in the election was light, but 76 percent of those who did vote said yes to free public transport.

The plan took effect January 1, 2013. Tourists still have to pay €1.60 to ride. But for Tallinn residents, a deposit of €2 gets a smart card that allows limitless travel within the city. Residents do need to swipe the card over a reader when boarding and exiting buses and trams. They also must carry an identification card proving that they are a registered resident of Tallinn.

Replenishing lost revenues

The registered resident part is crucial to how Tallinn is paying for all of this. Before, there were 40,000 unregistered residents of Tallinn, meaning that they lived in the city but were paying taxes to another town where they had previously lived. Now, free transit is an incentive for those people to register and get on Tallinn’s tax rolls.

Triin Rannar is one of them. She moved from eastern Estonia to Tallinn a year ago, and rides the bus to her job downtown each day. The offer of free transit inspired the 24 year-old to register with her new city. She estimates that she saves €23 per month by registering.

Rannar is not alone. More than 10,000 people registered as Tallinn residents in 2013, nearly three times more than registered in 2012. They contribute new annual revenues of about €10 million — almost as much as the lost farebox revenue of €12 million. “If all the registrants were taxpayers,” says Deputy Mayor Aas, “then the project costs of free transportation would be covered.”

Aas notes that the economics of free transit would be different in other cities. One reason why it works in Tallinn is that the system was highly subsidized to begin with. That’s not the case in London, for example, where fares account for 85 percent of public transport revenues. Free fares there would leave a gaping budget hole. “It is easier to waiver the ticket revenue if there’s already a large subsidy,” Aas says. “The subsidy part used to be 70 percent in Tallinn. Now it’s 96 percent.”

Can it continue?

Whether that decision was worth it is a question that will take more time to answer. In 2014, researchers hope to gain more insight into free transit’s impact on the local economy. And they hope to get more data on mode shifting, as well as how various socioeconomic groups are responding to the change.

Politically, the big question is whether Tallinn will be able to sustain free transit for the long run — or go the way of Hasselt. Aas says it’s possible to keep investing in transit even without farebox revenue. “The first year showed that yes, we can,” Aas says. “We have bought new buses. Within five years, we want to replace all buses with modern ones. And one tram line is under renovation, along with the buying of new trams.”

As Aas sees it, all this is at least as sustainable as the other services governments spend money on. “Are free education and medicine sustainable?” he says. “Or how sustainable is widening of streets and the construction of new crossroads that will soon be filled with new cars?”

But Andres Harjo, head of the city transportation department, says it’s important to remember that price isn’t everything. Free rides won’t be effective if buses and trams become overcrowded, slow, uncomfortable or unreliable. “The price of a free ride is only one measure to attract people to public transport,” Harjo says. “My feeling says that if we are able to guarantee quality, then the number of passengers will slowly and continuously rise.”


Mixed results from free transit in Tallinn

Oded Cats on research from Tallinn

Free transit in the U. S., for college students