Fare or no fare? Transit agencies face tough choices amid COVID-19 budget crunch.

By: - August 21, 2020 12:01 am

The Pulse, Richmond’s bus rapid transit line. Virginia officials are trying to lure passengers back to transit as the pandemic subsides. (Ned Oliver/Virginia Mercury)

Thanks to ground-breaking expansion plans and record ridership numbers in 2019, the Greater Richmond Transit Company expected 2020 to be a turning point in Central Virginia’s glacial journey towards a truly regional transit system.

Instead, GRTC’s first-ever local route in Chesterfield opened during an unprecedented pandemic and eight months into the year the agency finds itself hustling to balance the safety of its riders and staff, its responsibility as an essential transportation service, and its own budget.

“This year we have had to shift from the idea of a growth model to solving the question of how do we preserve service in an environment where the state and our localities will also be trying to conserve their funding,” said GRTC CEO Julie Timm.

Although GRTC uniquely has had to reckon with looming 50 percent cuts in local funding from the City of Richmond and Henrico County due to a provision in the new Central Virginia Transportation Authority, the commonwealth’s 41 other public transportation providers find themselves in similarly uncertain situations thanks to the novel coronavirus and its impact on government coffers. In the delicate balancing act of protecting public health and avoiding crippling budget shortfalls, one of the first questions agencies have had to answer is whether to continue to charge riders or go fare free.

Fare is fair?

In the early days of the pandemic, nearly all transit agencies across the U.S. stopped collecting fares. Although the risk of virus transmission via surfaces may not be as high of a risk as sharing unfiltered air in closed spaces, transit leaders decided protecting their passengers and employees must take priority — even over agencies’ own financial well-being. 

Thus, American public transportation forsook fares and began back-door boarding in an effort to reduce contact between riders and bus drivers. In Europe and Asia where all-door boarding and contactless payment have long been the norm, interventions to make transit COVID-19 safe proved easier to implement and often came at no cost to agencies’ bottom line.

Lacking any uniform guidance from the Federal Transit Administration, the closest thing to a national best practice has come from the New York based nonprofit Transit Center. “Safety has to be paramount for both riders and operators,” said Hayley Richardson, a senior communications associate with Transit Center. “Transit agencies can and should take steps to minimize contact between transit workers and riders, especially in places with rising case numbers. Suspending fare collection is the most rider- and operator-friendly policy at the moment.”

The policy patchwork

According to data collected by Virginia’s Department of Rail and Public Transit, by the end of March, 33 of the commonwealth’s 42 public transportation systems had gone fare free. Of those, 28 continue to operate on a zero fare basis. Notable exceptions include Virginia Rail Express, Potomac & Rappahannock Transportation Commission, and — as of July 1 — Hampton Roads Transit.

On the same day, DRPT issued Phase 3 reopening guidelines for transit agencies. “We encouraged systems to go fare free to protect their riders and drivers, but we didn’t issue anything definitive because we want to leave it up to each system to decide based on their finances and user profile,” said DRPT director Jennifer Mitchell. “What we’ve done is encourage systems to be practical. We haven’t wanted to be too prescriptive about when to go back to collecting fares. Local systems know best, so we let them decide.”

The lack of directives from the state has allowed two of Virginia’s largest transit systems — GRTC and HRT — to chart very different courses. Headlines stating GRTC’s pledge to zero fares have been somewhat overblown. “It’s a common misconception that our system will be zero fare for the entire fiscal year,” said Timm. “What we have done is budgeted conservatively which will allow us to maintain this policy through next summer or perhaps less if we find that it is safe and reasonable to reintroduce fares.” 

For HRT also, the determination that fares could once again be safely collected had little to do with budgetary necessities. “Reinstating fares was not driven by a financial need,” said Conner Burns, HRT’s chief financial officer. “It was a decision we made to try and get back to normal.”

“Removing fares was an initial protection for front line people, but we felt it was OK to restore fares now that we have a mandatory mask policy, shields for drivers and daily cleaning of vehicles in place,” said Tom Holden, a media relations specialist at HRT. Even after instituting similar protections including disinfectant and hand sanitizer on all buses, barriers to keep passengers from close contact with operators and doubling up service on GRTC’s busiest routes, Timm and her board have chosen to keep their zero fare policy in place.

“We’ve seen a startling overlap between routes that still have high ridership and communities that have borne the brunt of COVID cases,” she said. Although no outbreaks in Virginia or the country have been traced to transit, Timm wants GRTC to play it as safe as possible: “I’m proud of the fact we haven’t seen any clusters or surges, but can we safely put fares back in place and not create health issues that our system has avoided so far? With COVID cases rising in Virginia, I don’t feel like we can let our guard down.”

Congress CARES

Thanks to funding included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Virginia’s transit agencies are not yet at the end of their financial rope. Of the $456 million received by the commonwealth for its public transportation, $249 million was allotted for Northern Virginia (including Metro), $63 million for Hampton Roads, $53 million for rural services, $47 million for small cities like Harrisonburg and Danville, $36 million for Central Virginia and $8 million for Roanoke.

The $32 million that GRTC received as their portion of Central Virginia’s allotment will cover the $26 million deficit for this fiscal year, but it doesn’t leave them much wiggle room if the economy — and the tax base — don’t make a swift recovery. “Our fear is that next summer we will likely need $12 million to fill our funding gap even if we maintain our current super conservative budget approach,” Timm said.

HRT only required $11 million of its $58 million share to balance its budget this summer. After his experiences as a CFO for transit agencies recovering from fires, tornadoes and even Hurricane Katrina, Holden knows a full recovery will likely take years and hopes his agency can scrape by with just $15 million per year from their CARES funding for the next three years. “Having this extra funding allows us not to have to ask the cities or the state for any money,” he said. “We don’t want to burden our partners, so if we have to spend it down before the end of three years we will.”

The unequal distribution of federal funding is a problem, albeit one beyond the authority of DRPT or the state. “The CARES Act funding followed existing formulas the feds use for allocating money,” said Mitchell. “What we saw in our urban areas is that they did not receive the same proportion of funding that rural systems received. It was enough to offset some of their losses this year, but it’s not enough to carry them over into next year.”

The larger problem for Virginia’s public transportation providers is that federal dollars don’t take into account how the pandemic may impact their funding needs as the outbreak evolves.

“Congress’ challenge is when they finally reach deals they have to move quickly, and they have a propensity to pull from an existing program and method of giving money out,” said Beth Osborne, director of Transportation for America.

“Not only does that not apply to what today’s needs are, it likely won’t have anything to do with what agencies will require a month from now,” she said. “We really need a program that will account for agencies needing different amounts of money at different times based on what the outbreak is doing in their community at that time.”

Equitable, essential transportation

Even as America’s transit agencies face ever greater financial uncertainty, the movement to keep public transportation free post-pandemic has grown. “Many of the folks still riding transit are low-income, essential workers,” said Richardson. “Burdening them with fare payments is not a good way to honor their contribution. The economic stress many transit riders have endured during the pandemic is a great reason to extend fare-free transit, at least for low-income riders.” 

Although activists in Pittsburgh are already pushing to allow people to be able to flash an Electronic Benefits Transfer card in lieu of a fare ticket in order to ride city buses, the conversation in Virginia has so far been more muted. 

“Zero-fare policies are not all about COVID, but the pandemic gave us a lot of data to reevaluate who bears the brunt of fare payment,” Timm said. “We can go back to our essential workers paying fares, but that would mean our riders who are most likely to have lost their jobs or face a housing crisis will be putting their money into the farebox to cover service. What impact will that have on our community?”

According to Osborne, the tough policy problem of ensuring access to affordable transportation is only going to get trickier as the pandemic puts further pressure on people’s pocketbooks. “You’ve got to think people are letting their cars go before their homes, and there’s nothing protecting people from car repossessions at all,” she said. “How many Americans are going to find themselves in the same position I was once in: I couldn’t afford a car because I couldn’t get to any jobs and I couldn’t get any jobs because I couldn’t afford a car?”

If car repossessions become as widespread as transportation advocates fear, fewer people will have access to private vehicles and the reopening of the economy will only become more reliant on transit because more people will need to take public transportation to get to work. With Congress gridlocked on basic issues like extending unemployment insurance, the chances of a second round of transit funding look slim. If lawmakers fail to keep transit fully funded, Osborne believes the repercussions would be economically disastrous.

“If people can’t physically get to places of employment, it makes reopening the economy nearly impossible,” she said. “This is a binary choice. Either we want our essential workers to be in their jobs when we need them and we will fully fund transit or we don’t care and the economic consequences of transit agencies shutting down will be huge.”

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Wyatt Gordon
Wyatt Gordon

Wyatt Gordon covers transportation, housing, and land use for the Mercury through a grant from the Piedmont Environmental Council and the Coalition for Smarter Growth. The Mercury retains full editorial control. Previously he’s written for the Times of India, Nairobi News, Honolulu Civil Beat, Style Weekly and RVA Magazine. He also works as a policy manager for land use and transportation at the Virginia Conservation Network.