Guangzhou Abandons Free-Fare Experiment

Guangzhou, the southern Chinese megacity that is to host the 2010 Asian Games this month, has abandoned a plan to offer free public transit while the Games are on.

The plan was to ban half of all of the city’s private cars from the road each day (using an “even-odd rule,” a scheme by which certain license plates can be used only on certain days), and also to ban traffic unrelated to the Games from certain roads.  In return, public transit would be free during the Games. 

The problem?  The same one that you have when you give away valuable road space for free.  Congestion — or as we call it in transit, overcrowding.  If you don’t pay in money, you pay in time.  From Life of Guangzhou:

However, the even-odd rule, together with free rides on buses, subways and ferries, has caused a huge surge in public transportation, especially in subways, in this city of 14 million people.

Temporary traffic controls were introduced in at least eight subway stations during peak time on Monday due to the huge passenger flow, sources with the local metro company said.

“This is the most people that I’ve seen in the subway. It took me 20 more minutes than usual to get to the office,” said Huang Chunhong, a local white-collar worker.

“It’s like a nightmare to get into a train. Many people are forced to use public transit due to the even-odd license plate rule. How can I go through the next two months?” Huang said.

So they’re backing off.  From Xinhua:

Now, officials with Guangzhou’s transportation authorities said they had to rescind the offer as more than 8 million passengers took the subway on an average day beginning November 1, a figure “much, much higher” than the subway system was designed to carry.

Average daily ridership when fares were charged was 3.8 million, so the free fare caused a doubling of demand.

Guangzhou authorities plan to roll back the free-day scheme on Nov. 8 and replace it with a cash subsidy program in which each household in Guangzhou will receive 150 yuan as a transportation subsidy from the government.

Fares are the source of so much controversy and hassle that it’s always tempting to try to make them free.  A quick scan of “success stories” in this regard shows the pattern:  You can do it in rural areas and small cities where demand is low.  You can do it in university-dominated towns, where students are most of the market and are riding anyway.  And you can do it in a downtown area, specifically to make short trips within downtown easy.

In each of those cases, you’re giving away something for which you anticpate low demand and for which you have adequate supply.

But citywide free transit in a big city, especially during the peak commute, is the opposite.  You’re giving away something that is in high demand and for which you have a limited supply.

You could also design and scale a transit service from the beginning with the intent that it be free.  New York’s Staten Island Ferry comes to mind, along with many specialized shuttles and most elevators.  Many road networks, of course, have been designed and scaled with exactly this intention.

But if you propose to just eliminate the fares on an existing big-city transit system, the answer is always the same: Even while charging a fare, big city transit is crowded during the peak.  Inevitably, you don’t have enough buses and trains to handle the flood of ridership that would result from free fares.  Now, thanks to Guangzhou, we can see the same point proven in practice.

Could a big city transition gradually to totally free fares?  Sure, but only in the sense that an American city could build 100 mi of subways in the next decade: i.e. if money were no object.  If you assume that eliminating fares would double ridership — including on the peak — then you’d have to double your fleet, double your workforce, and duplicate any track or roadway that’s already congested with full trains or buses.  In most big cities, that would mean duplicating downtown subway lines and stations, which is at least as expensive as building new ones, if the space to do it exists at any price.  Would you save a small bundle on fare equipment and staffing?  Sure.  Would that be enough to pay for all that new capacity?  Not even close.

28 Responses to Guangzhou Abandons Free-Fare Experiment

  1. In Brisbane November 7, 2010 at 11:41 pm #

    This is a nice experiment. In this scenario, the density of the city remains constant. The only thing that is changed is the supply of road space and the price of PT fares.
    Then we stand back and observe what happens to public transport patronage…
    It might tell us something useful, even though the free-fare experiment was a flop- if you keep road/freeway construction under control in your city, you might be able to increase patronage on public transport (the money to increase peak capacity would have to come from diverted road projects though)

  2. EngineerScotty November 7, 2010 at 11:49 pm #

    They tried a similar experiment in Beijing, IIRC–going to an “even/odd” system with license plates.
    The result is that many Beijing residents purchased an additional car–one for even days, one for odd days.
    That said, the air pollution in Guangzhou is so nasty (at least it was back in 2003, last time I was there), that anything to get cars off the road can help.

  3. Jase November 8, 2010 at 1:58 am #

    I dont think you can say ” the free fare caused a doubling of demand.” There’s a major confounding effect.
    It would be interesting if a modeller somewhere could separate out he effect of making transit free from the effect of banning half the cars. I imagine there would have been some car pooling, some cycling, some hitch hiking and some taxis taken as well as a rush to public transport.

  4. Bampa Owl November 8, 2010 at 3:58 am #

    Yes, the distortion of the market is in not charging for road space – you don’t make things any better by making transit free too. We don’t give everyone free housing, or food – why give away free transit? Personal mobility is fine – but if you give it away, you destroy the whole basis of land-use transport planning and end up with everywhere looking like Southern California.

  5. In Brisbane November 8, 2010 at 4:36 am #

    Often people say though that cars on highways pay for themselves- either through petrol taxes, road tolls or other indirect taxes and that roads are a public service that benefits the economy.
    What do people think about this though?

  6. Danny November 8, 2010 at 6:50 am #

    The absence of pricing for goods and services is problematic no matter how many positive or negative externalities exist. The real issue to be discussed is finding the correct pricing for those goods or services.
    And in the case of transit, at least in the US, fares are consistently too low. I don’t know why people fear a $2.00 fare…it is still a better value in most urban travel than ANY other comparable option.
    Maybe the problem is that in the US, fare increases often don’t result in transit increases, and thus a fare increase doesn’t feel fair. But bloody hell…people will still ride it!

  7. tacony palmyra November 8, 2010 at 7:47 am #

    I don’t think the Staten Island Ferry makes sense as an example here. The Staten Island Ferry wasn’t “designed” “with the intent that it be free.” In the 18th Century, private ferries ran between Staten Island and Lower Manhattan, which obviously charged their passengers a fare. The city took over ferry operations in 1905, and charged a fare (5 cents at first, then 10, then 25, then 50). The fare wasn’t abolished until 1997, as a political gift from Giuliani to Staten Island, which is heavily Republican and upper middle class (his base). He argued that Staten Islanders were paying “3 fares” to commute– an MTA service on Staten Island, the ferry, and then MTA service in Manhattan– but this was in an era before 30-day unlimited ride Metrocards and free system-wide transfers.
    Most people using the ferry are also using an MTA service at some point in their trip, making the “free” ferry somewhat pointless and more a political gesture than anything else. If they installed Metrocard HEETs in the ferry terminals (which would be very easy) and treated the ferry as any other MTA-equivalent service (with free transfers and use of 30-day unlimited cards), I doubt that ridership would change at all. Maybe you’d discourage a tiny handful of people who happen to both live and work within walking distance of each terminal, but it’d be practically insignificant given their alternatives. The small number of people who drive to the St George terminal to park and then happen to work within walking distance of South Ferry are paying $1200+ a year in parking fees for that privilege, so I don’t think Metrocard fare is really going to dissuade them either. Even the tourists making the trip-and-back in nice weather probably took the 1 train to get there, so they’d have 2 hours to make the transfer to the ferry for free. They could even grab a hot dog from a street vendor and stroll along the battery on the way.

  8. Jonathan November 8, 2010 at 8:11 am #

    Tacony, thanks for mentioning the SI ferry’s history. But that $1,200 a year ($5 a day to park) would just about double if ferry patrons had to buy a transit fare as well. I expect that many of them would choose to drive to Brooklyn and park there in that latter case.

  9. George November 8, 2010 at 8:24 am #

    This isn’t really a fare trial for free transit. They artificially increased demand by making 50% of the population unable to use anything but transit. It’s likely that if they had still charged money the system would have remained overloaded, people need to get to work.
    I think discount transit is something that needs to be looked at now that most systems are on card based systems. Areas of low use on a system could be made cheaper to encourage ridership in those ares (with the idea being that increased ridership will eventually lead to better service and then a return to normal fares). This could also be used to revitalize business or residential areas. Or in areas that are under construction or just being redeveloped – ie. move to this area and the first 5 years of transit will be free. Fares should support wider economic and development goals.

  10. francis November 8, 2010 at 11:00 am #

    In the Bay Area we sometimes have “Spare the Air Days” when air pollution becomes a problem due to hot, stale air. At first mass transit was free on those days, but this led to problems with people riding for fun and overloading the system, so it was later scaled back to mornings only and finally to not at all.

  11. Alurin November 8, 2010 at 11:35 am #

    @In Brisbane: Transit is also a public service that benefits the economy. Roads do not pay for themselves, at least not in the US. Gas taxes do contribute to the Federal transportation budget, but money also comes in from the general funds. Also, much of the cost of roads is borne by states and municipalities. Furthermore, since most of the funding routes are indirect, people are not really conscious of the price of a car trip when they get on the road. the only exception is when gas prices spike, because that’s the only part of the cost of driving which is directly related to use and closely related in time to use. And of course, since gas taxes in the US are per gallon, not % of price, you’re not actually contributing more to the upkeep of the road network when gas prices are high.

  12. Alon Levy November 8, 2010 at 12:04 pm #

    @In Brisbane: check the FHWA’s numbers on how much revenue roads in the US generate and how much spending they require. And even that only captures some of the costs, because there’s no allowance for depreciation.

  13. 23skidoo November 8, 2010 at 12:35 pm #

    @tacony palmyra: When I went to NYC (2005) my travel guide specifically mentioned the Staten Island Ferry as a free attraction, and generally did not endorse taking the subway at all. The tourists are probably a small fraction of the ferry riders, but some of them are going to be taking a cab from their midtown hotel and expecting a free boat ride.
    Of course, that guide also said the east village was seedy and that you were gambling with your safety by going to the boroughs. Still, this is what tourists read before visiting the city.

  14. JJJ November 8, 2010 at 3:15 pm #

    Ive seen many situations where the opposite is true: a system is made free BECAUSE of high demand. Usually on special event days where charging fares (via the American loved gate or turnstile system) means dangerous overcrowding at the fare check points.
    Examples: Boston on fourth of july (from 6pm until 1am), and new years eve (8pm until 2am). During the Stewart Rally in DC last week, many reported that station managers simply opened all gates to let people in because the lobby was too crowded.
    Of course, if fares were collected via POP, this wouldnt be necessary.
    What transit systems should do is free or half priced fares on Sundays, which is when demand is lowest, and transit competes with free parking.

  15. calwatch November 8, 2010 at 9:17 pm #

    How do you enforce POP when it’s that crowded? you can’t expect fare inspectors to jostle inside crowded trains to check everyone’s ticket. Basically, like any large event, it is best to give in to the mob unless you have the manpower to control it.

  16. Tessa November 8, 2010 at 9:30 pm #

    I’m quite encouraged by this, because it shows that people will glady hop on transit if the right conditions exist. It doesn’t have to be even/odd license plate, and it doesn’t have to be free transit, but cities do need to prepare by creating the capacity in the system to handle increased demand as well as choosing not to expand the roadway, which is inefficient in terms of space and cost (as mentioned above). This can be paid for by diverting funds from road construction to transit (ideally) or also by congestion charges, parking taxes, or whatever suits the local needs.

  17. Alon Levy November 8, 2010 at 10:26 pm #

    When it’s extremely crowded, you can’t do POP, no. The busiest line I know of that uses POP is the Stadtbahn in Berlin, with 300,000 weekday passengers. Busier lines are either legacy subways or in East Asia (especially Japan), where POP is impossible because of overctowding.

  18. Dexter Wong November 8, 2010 at 11:42 pm #

    With reference to JJJ’s comment, during the Giants’ Victory Parade in San Francisco, many Caltrain riders were allowed to ride free because of the crush of people passing through the stations (trying to sell tickets would have slowed things down too much). Also a number of BART riders were given the same gift. This was the day that BART had its record ridership.

  19. Mr. An November 9, 2010 at 12:32 am #

    I was in Guangzhou over the period that this ended and it was quite chaotic when the system was free, but it continued to be quite chaotic after the experiment ended too. The massive uptick in ridership could have something to do with a major expansion and reconfiguration of the metro system in the last couple months, mostly in the last few weeks. They have added what are essentially 4 lines since September 25 (one line is numbered as a branch of the 3 line but is being operated independently). With the new lines, and changes to the old ones, many people were clearly confused by the system. Security has also been increased, including selectively closing some entrances to some subway stations, which only added to confusion. So while the making the system free certainly had an effect on ridership and delays, several other factors were also in play. In my purely subjective assessment, it seemed to be running a bit faster while free because queuing at the ticket vending machines was a major delay.

  20. Tobias November 9, 2010 at 6:34 am #

    calwatch wrote:
    How do you enforce POP when it’s that crowded?
    You don’t enforce it at all. Instead you can make people pay for it by adding a surcharge on ticket prices for the Asian Games or for any other event that causes the temporary overcrowding.

  21. ant6n November 9, 2010 at 8:15 am #

    According to the Wiki entry, the Stadtbahn has 600k passengers a day.
    I think POP works even on relatively crowded lines. Growing up in Berlin, I got controlled at such a freqency that the expected fines for a month where similar to the monthly fare. Plus, if you get caught without a ticket a lot, they start other measures than just the fine.
    As a fare evader, it’s hard to organize all your travels around being in very crowded situations – it doesn’t always work. And once you start evading fares, you also do so on trips where it is easy to be inspected.
    And even if a car is completely full so that fare inspectors couldn’t squeeze through (which is seldom the case even on the Stadtbahn), they can still check your fare as you leave the vehicle — which they do. Fare inspectors dress casually now, and work on a comission basis. They get pretty good at what they are doing. So if you don’t have a ticket, taking public transit becomes quite stressful because you’re always on the lookout.
    Of course this doesn’t really work for very big crowds during events. But even then most people will probably pay their fare, because many have monthly passes, some fear to have their fare inspected at some point (you get in at a crowded point, but where do you get off?), and some simply pay their fare because it’s the right thing to do.
    Regarding Washington during the rally – it seems they only opened up some of the downtown stations when people where trying to _pour out_ the station. But for example at the stadium (where the HuffPost buses dumped all the people), they didn’t open the gates. Instead, they set up one extra vendor who sold 3.70$ tickets for the return fare to downtown. This all created huge lines, and we were delayed more than half an hour. We walked the 3 miles on the way back. The Washington system seems not to be set up for big crowds like that, and the fare machines and turnstiles became a huge bottleneck of the system.

  22. Scott November 9, 2010 at 4:26 pm #

    The opposite side of this argument is that you can also slash ridership, intentionally or not, by raising fares. In 1991 if I remember the year correctly, the Moscow Metro raised its fare from the long-standing 5 kopeks to 15, and ridership plummeted. (Later, of course, there were many more increases as the currency inflated and was re-valued.) I don’t know how the system made out financially – presumably the increased fares outstripped the loss of ridership or the managers would not have continued the policy – but it made life that much more difficult for pensioners and others with limited income. Some people will grit their teeth and ride regardless of price. Still, there will be those who just simply cannot afford it any more and disappear from the system, assuming fare gates and inspectors are there to keep them out.

  23. JJJ November 9, 2010 at 7:22 pm #

    calwatch, while enforcing POP might be hard, its better to have the majority pay than have no one at all.
    While fare checks cant be done on the train if it’s too crowded, they could be done on the platform. Im sure the sight of some fare checkers slowly making their way down the platform would encourage the freeriders to tap their cars.

  24. Alon Levy November 9, 2010 at 7:35 pm #

    Ant6n, what I saw on the English Wiki was different – the now dead link they give to the Ringbahn ridership said 400,000 Ringbahn and 300,000 Stadtbahn.
    At any rate, by the standards of the Chuo Line’s 600,000 on just one suburban tail (=1,200,000 total for one peak demand direction), either 300,000 or 600,000 on a symmetric two-track line isn’t a lot. At Tokyo’s crowding levels, station agents become cheaper than inspectors.

  25. ant6n November 10, 2010 at 9:19 am #

    At some crowding levels it POP does become impractical. I was merely trying to say that at the sort of crowding levels that one generally sees in Europe or North America, it is possible to have POP – even if it does not appear so during certain peak times.
    At the same time, the Washington system with its turnstiles was not able to handle the demand during the rally to restore sanity/fear.
    (regarding the S-Bahn ridership – it’s form this source, page 13. This is from 2007, before the temporary meltdown of the system last year which surely reduced ridership a lot).

  26. ant6n November 11, 2010 at 9:39 am #

    On a related note, as a “sorry” for the huge meltdown of the S-Bahn system in Berlin, The Deutsche Bahn is spending 70M Euro in December to offer reduced fares. A single ticket will count as a day pass, monthly passes are 15 Euros cheaper, and people with yearly passes get two months for free.
    The single passes becoming day passes would be a good model for “Spare the Air Days” (re Francis’ comment).

  27. TransitPlannerMunich November 12, 2010 at 12:59 pm #

    A POP-system can handle any demand.
    Better than any other system.
    Munich’s metro station Marienplatz, POP of course, handles over 32,000 passengers during peak hour boarding or disembarking just in the metro station itself, many more if you include the S-Bahn-commuter-section.
    Also the Oktoberfest in Munich is handled with POP, despite the high amount of alcohol consumption. Each of the escalators at Theresienwiese station at the Oktoberfest is used by up over 12,000 persons, 200 riders per minute pouring in by each escalator.
    Most people on a POP-system have a monthly or weekly pass anyways. And from the rest the overwhelming majority is honest and pays the fare. And if, besides random ticket inspections, you want to do some more pressure you can make some kind of raids where you place ticket inspectors on all exists of the station and others in plain clothes on the platform who catch those without ticket who come back once they see the inspectors on top of the escalators. No one passes then without showing the ticket.
    And anyways, in almost all cities in Germany, the tickets for sports events automatically can be used as a transit ticket (the price is included in the sports ticket price), the same is true in a lot of places for concerts, theater plays – and at most universities a ticket for the whole semester is included in the student fees (heavy discounted, what is possible cause all students get this).
    So POP is the solution, not the problem.
    The result is 2 to 3 percent of fare evasion in a good POP system – like Munich. More is not possible, except maybe in Japan, no matter if POP or not, I guess.

  28. Ted November 8, 2011 at 10:41 am #

    I was there with my wife. We went into the metro station. It was more crowded than the MTR after Hong Kong’s 1997 handover fireworks. Dangerously crowded downtown so my wife was afraid of being trampled. We made our way out as soon as we got in and saw how it was. That took a good 15 minutes that would have normally gotten us home.
    From there we walked to the bus terminal. The busses were also free and at every bus stop sign there was a line hundreds of feet long, with over an hour wait times. But the #B25 bus is not well marked with a sign where it stops and we frequented that bus, so we knew about it and were able to get back home efficiently.
    Parks and museums that usually charge were also almost all free, but their lines were longer than the bus lines, and not moving perceptibly at all. So we went to town to go to free museums and went home without. At least the trip was free. After that she went to Shenzhen until the games were over and I rode a bike. But it was OK once they put the fare back into place.
    I think the main reason everything was crowded is that everyone was trying to take advantage of the one-time-opportunity to go to the museums and attractions without having to pay even for transportation. The first few days were so crowded that it was cancelled after about the third day. It was a great deal, but to introduce it all at once like that caused a huge sudden surge in congestion. It would have been better to drop the fare to 1RMB for everything a month in advance, then one by one remove the fares without so much publicity.