The Price of Public Transport: Is it Fare?

Understanding the impact of pricing tools, among other methods, to make public transport a more favourable alternative to car journeys and the impact this has on European CO2 emissions.

Cars are currently responsible for a whopping 12% of total greenhouse gas emissions in Europe, emitting on average 107.5 gCO2/km in 2020, and with a goal of 95 g CO2/km for the years 2020-2024, something needs to change. Electric vehicles have recently gained media attention as the glamorous front-runner for achieving the EU’s goal of a 55% reduction in new-car emissions by 2030. However, with EVs being a pricey alternative to internal combustion engine-powered vehicles, many citizens may look to public transport as a greener and cheaper way of getting around amid the cost-of-living crisis. European governments must, in turn, implement the correct incentives to ensure an increased interest in public transport, consequently reducing total car usage. But would introducing a flat-rate fare reduction achieve this aim?

A recent study from the Netherlands argues that while a flat rate reduction of public transport fares does increase public transport usage, it is not an effective measure in encouraging people to switch from cars. This is because 78% of the rise in public transport usage is a result of new mobility, rather than a replacement of current journeys. The research from the Netherlands Institute for Transport Policy Analysis titled ‘Pricing tools: better as a package?‘ states that cheaper public transport mainly leads to extra mobility because people make new trips, and instead, reduced fares would encourage people who would otherwise walk or cycle to use trains, trams, or buses. This suggests that pricing tools alone are perhaps not an effective solution to reducing car mileage, but rather placing focus on a combination of measures may prove more effective, such as making car use less attractive by means of a parking policy or a per kilometre-travelled charge and making public transport more attractive by reducing fares in a targeted manner and by improving service and quality.

However, public transport does not work like a taxi; a taxi will never run from A to B without paying passengers, but an empty train will still run on schedule. So, is it such a bad thing if lower fares create new mobility? As proven in the aforementioned study, reducing the price of public transport creates a rise in usage. Irrespective of whether that passenger would have otherwise taken a car or walked, this creates revenue that- theoretically -would go directly back into the sector; -creating opportunities for enhanced routes, newer systems, and even costly green developments that may not otherwise be feasible. Moreover, this could all be achieved whilst having no difference on the environmental impact, pertaining to the fact that public transport will operate regardless of custom.

Many countries in the EU have experimented with different measures to subsidise public transport, perhaps the most drastic and notable measure is the free public transport system introduced by Luxembourg in 2020, which was the first country to do so. Over 50 cities and towns in Europe have followed suit, citing climate ambitions and social equality as their primary motivators. Interestingly, though, the Estonian Transport Administration’s sustainable mobility expert Mari Jüssi explains that “in sustainable mobility terms, it actually hasn’t proven to be effective”, echoing what was observed in the Dutch study. However, Jüssi acknowledges that it might have seen more of an effect in social terms, articulating “Families with a lot of schoolchildren save some money during the year, some of the county buses are also free since 2018. There we see maybe more positive impacts because it used to be more expensive”.

Conclusively, regardless of the tools employed, it is not always possible to make the switch to public transport for many car trips such as in non-urban areas or trips after hours. And, while lowering public transport fees may prove worthwhile in persuading this change, the two are not mutually exclusive. Governments should therefore arguably seek to enhance public transport connections, both in schedule and route, among other separate measures, to discourage motor vehicles. Moreover, they should additionally seek to lower public transport fares in order to make freedom of movement more accessible amidst this cost-of-living crisis, with lower public transport fares inciting greater social and economic change.