No such thing as a free ride

It’s Monday morning as a seemingly endless stream of commuters snakes its way across State Route 520, which links Seattle and its eastern suburbs, creating miles of traffic that routinely snarls the region’s highways. It’s a scene that’s easily repeated up and down the West Coast, from Portland to San Francisco and Los Angeles. Urban congestion has become a way of life not only across the West, but nationwide as well. The Texas Transportation Institute, which has tracked urban mobility trends for 20 years, projects that urban travelers now encounter congestion seven hours of the day on the nation’s highways.

The trends aren’t getting any better. From 1980 to 2000, the nation’s population grew 24 percent, while the number of vehicle miles traveled grew 80 percent. In 2000, delays added up to $68 billion in lost productivity and wasted fuel. Yet nearly nine in 10 people still travel by car, a number that hasn’t significantly changed in several years.

The unrelenting demands on the region’s highways are creating a spiraling backlog of road and bridge projects — and revealing ominous trends in funding. Washington State has a backlog of nearly $80 billion in road and bridge repairs and improvements, $40 billion in the Puget Sound region alone.

This November, Seattle voters will face the largest road and transit funding package put before them in 50 years, which, through increased license fees and taxes, will cost households an average of $218 more a year. Yet even if approved — a matter that’s far from certain — funding won’t be nearly enough to cover needed improvements to the region’s roads and bridges, not to mention future expansion of public transit.

Such dire projections are prompting serious thinking about how to not only fund transportation needs, but also coax more people off the roads and onto public transit. Could the private marketplace provide answers?

Pay as you go
Few people think twice about paying to ride buses, trains or ferries, yet cars are largely free to travel the region’s roads and highways without directly paying for that privilege. Taxes and fees have long funded road projects, but such funding strategies diffuse costs, making it difficult for most drivers to link their driving habits to maintaining area roads. Now, planners and elected officials looking to fund transportation projects and cut congestion are asking whether it’s time to turn pricing for travel on its head.

“We’re going to max out our local options for sales tax,” says Rob Johnson of the Seattle-based Transportation Choices Coalition. “We critically need to look at other options to finance projects.” Some political leaders say the time has come for “pay as you drive” strategies, charging drivers tolls based on the amount they drive. Such regional tolling systems already cover over 115 miles of highway in California, and bridge tolls are common in the San Francisco Bay Area.

King County Executive Ron Sims has tentatively floated an idea to bring regional tolling to the Puget Sound region, charging drivers on many of the area’s most congested highways based on distance traveled. Such a strategy could raise $36 billion over the next 20 years. And while tolls are nothing new to the region — the upgraded Tacoma Narrows Bridge includes a $3 toll, and tolls were used to finance bridges across Lake Washington — tolling may be a hard sell to area voters.

A report prepared for Sims’ office says tolling may serve two purposes: raising badly needed funds for roads and transit, and helping to cut back congestion. A similar tolling project in London prompted an estimated one-third of the city’s drivers to switch to public transportation. “We cannot build ourselves out of congestion, and we cannot afford to feed the supply side without managing the demand side” says one of the report’s authors, Mark Hallenbeck, director of the Washington State Transportation Center.

Free ride?
Meanwhile, elected officials and the San Francisco Municipal Transit Agency (MTA) are looking at the other side of the transit funding equation — giving city residents free rides on the city’s bus and streetcar system by eliminating fares. Fare-free service may not only do away with a revenue stream without a big hit to the agency’s operating expenses, but may also encourage increased ridership, which, in theory, would help reduce traffic and maintenance on the region’s roadways. According to MTA officials, the city is still investigating the idea’s feasibility.

San Francisco’s transit system now collects just 22 percent of its annual operating budget from fares. While such a percentage seems low, it’s characteristic of many transit programs around the country. Take out the costs of fare boxes and collection enforcement, and the percentage of operating revenue collected at fare boxes drops even more.

Experiments in fare-free transit have clearly boosted ridership. As part of a regional “Spare the Air” program aimed at cutting air pollution, more than two dozen regional transit agencies in the Bay Area are teaming up in 2007 to offer up to four days of free rides on buses, rail lines and ferries during days when ozone air pollution levels are forecasted to be high, due to weather conditions. The cut in car use is intended to help reduce ozone from auto emissions. Under the program in 2006, ridership surged on some bus lines up to 40 percent, while some ferry routes saw ridership jump more than 300 percent.

Both Seattle and Portland offer fare-free transit in their downtown cores, and both cities have considered regional fare-free proposals in the past. Sound Transit, Puget Sound’s regional transit agency, operates its 1.6-mile Tacoma, Wash., light-rail line fare-free. “The costs of recovering fares for such a short line didn’t pencil out well,” says Geoff Patrick of Sound Transit.

However, some transportation experts, question the full benefits of fare-free programs when applied on a system-wide, permanent basis. Past programs have resulted in crowding and increased crime, and those programs that have shown success have largely been in smaller towns and around university campuses. In fact, fare-free programs have never been thoroughly tested in a large urban area.

 “The vast majority of free fare experiments were dropped as failures,” says Hallenbeck, who notes that many new riders in past fare-free programs were youth or transients, not commuters. Convenience also appears to play a far greater role in encouraging use of public transit — including proximity to transit service, price of parking, travel time and frequency of service. “Fare price is often not even remotely the most important factor,” Hallenbeck says.

Transit agencies up and down the west coast have developed creative ways to offset up-front capital costs of transportation projects by collecting impact fees from developers, sponsoring joint public-private development near transit stops and using creative taxing and financing strategies.

But with public financing of transportation improvements at a critical crossroads, elected officials and transportation planners are now looking for new ways to tap revenue for operations too. Billboards and posters are a common sight on the exterior and interior of buses, as well as at bus stops and in rail stations. Revenue from advertising, however, typically makes up only a small fraction of operating revenue for most agencies. “Our advertising revenue of $4 million is only about 1 percent of our operating budget,” says Mary Fetch, communications director of Portland’s TriMet, which operates the region’s MAX light rail and bus system.

 In Florida, Tampa’s TECOline streetcar project has broken ranks with many transit agencies, aggressively pursuing advertising and promotion in an effort to tap its full potential as a revenue source. The City of Tampa has sold naming rights for the entire streetcar line as well as for stations and individual vehicles, sold advertising space on its fare cards and promoted rental of streetcars for private functions and group tours. Advertising sales and collected fares combined make up approximately one-quarter of the line’s operating revenue. The city had projected that both fare box revenue and advertising would generate a greater share of total revenue, but in the end both fell slightly short.

Despite an aggressive advertising strategy, ad revenue in particular fell short of the City’s goal, accounting for just 2 percent of total revenue. Seattle’s South Lake Union Streetcar, scheduled to open in 2007, has taken cues from Tampa, making advertising and sponsorship significant parts of the project’s revenue strategy. The project expects to cover about 25 percent of its operating and maintenance costs during the first phase of operation through advertising and promotion.

“The city will be generating revenues through the sale of sponsorships of vehicles and stations,” says Ethan Melone, manager of the Seattle streetcar project. “This is a significant revenue source.” Seattle is exploring other ideas for future streetcar lines as well, including raising parking fees along proposed new streetcar lines to both encourage ridership and fund operation. Other ideas include partnerships with the tourism industry and restaurants, as well as integrating monthly pass systems with other transit agencies, Melone says.

Privatizing public transit
As the backlog of big transit projects increases, and voters become more reluctant to fund them, is it time to completely hand over some projects to the private sector? Could such projects offer more efficient and cost-effective solutions? Private operation of transit is nothing new to the West Coast or the nation. In fact, private companies routinely operated rail and streetcar projects nationwide until the 1940s, when interstate highways and increasing suburban development undermined many transit systems, prompting the government to step in and support their continued operation.

Such was the case on Puget Sound, where a “Mosquito Fleet” network of small ferries thrived until the 1930s, when the number of operators dwindled, prompting the state to take over ferry service.

John Blackman knows how difficult reviving such private transit ventures can be. His company, Argosy Cruises, teamed up with a consortium of marine companies to form Aqua Express, which in 2005 offered private passenger ferry service between the town of Kingston, on the east side of Puget Sound, and downtown Seattle. The service not only shaved off more than an hour of commute time each way compared to the state ferry system; it also offered commuters food, a bar and high-speed Internet access. And while twice the cost of the state ferry, the Aqua Express fare of $7.50 each way seemed reasonable and competitive to Blackman and his partners.

“Our bet was that time was more valuable to commuters than money,” Blackman says. “That turned out not to be the case.”

Blackman says ridership was only about half of projections; faced additionally with spiraling fuel costs, the operation was forced to close down after just nine months.

Bruce Agnew, Director of Seattle-based Discovery Institute's Cascadia Center For Regional Development, which supports market-based approaches to transit, says Blackman’s experience is typical of many private companies that have tried to service public transit needs. “If the private sector could make it without public support, somebody would be doing it now,” Agnew says.

Blackman, whose company is in discussions with Kitsap County to restore ferry service, says he agrees that partnerships with public agencies are the best option, noting the difficulty in competing with a subsidized state ferry system. “The best of all worlds is a government partner that can borrow money to purchase capital at rates that the private sector can only dream about,” says Blackman. “The private side can then bring the best of all worlds in terms of efficiency in operating the service.” Still other groups are stepping up to fill gaps where service doesn’t exist and support greater public transit use. Southern California-based nonprofit WestStart-CALSTART’s First Mile program aims to link residents living within one mile of transit stops to public transit using a fleet of high-efficiency vans, e-bikes and other door-todoor transit.

With funding from the Los Angeles MTA, CALSTART’s “MyGo” program, launched in March 2007, is linking City of Pasadena commuters with the MTA’s city light rail line by offering subsidized electric bikes to travel to and from the station. Such programs not only offer a cleaner way to commute, they also cut the need for expensive park-and-ride lots, says Whitney Pitkanen, a project manager at CALSTART. Pitkanen notes that CALSTART hopes to expand its program to include fleets of clean running vehicles to offer door-to-door service to commuters. “We are exploring any sort of option that connects people to transit lines and reduces auto dependency,” Pitkanen says. “We just need partners on board.”

Other organizations have introduced manned bike stations at locations in California and in downtown Seattle, which offer secure bike storage, showers, changing areas, snacks and bike repair to entice commuters, and a similar facility has been discussed in Portland [see “Cyclorama,” SI, May 2007].

Others are embracing the promise of technology to encourage carpooling. Such is the idea behind Goose Networks, a Seattle-based company that links commuters through text messaging and mapping software. The service links subscribers working or living in close proximity to one another to form carpools that save fuel and allow drivers to use the region’s high-occupancy vehicle, or HOV, lanes. The company is currently piloting its system with employees at Microsoft, which foots the bill as part of its transportation incentive program. In the end, most experts agree long-term transportation solutions will rely not only on a multi-pronged approach that provides incentives to lure people out of their cars, but also a closer look at land use patterns, changing demographics and the evolving workplace.

Changing commuter mindsets may be the biggest challenge. “In Los Angeles, people often underestimate the time it takes to get somewhere by car, and overestimate transit time,” says Pitkanen. “But it’s not wasted time, because you can multi-task, instead of sitting behind a wheel in gridlock.”

Back on the Puget Sound, Agnew speculates on what will happen if the region rejects November’s historic vote on the region’s comprehensive roads and transit package. “There’s going to be a real regional appetite for taking a whole new approach to looking at and funding transportation.”