LinkedIn Post: The Free Bus Math Nobody Runs

Source: NSFW Podcast ep. 131 — "Come On and Take a Free Ride" (Kennedy + Brandyn discussing Albuquerque's zero-fare transit program)

Topic: When the infrastructure to charge for something costs more than what you collect

Albuquerque made its buses free. Not as a giveaway. Because it cost more money to collect the fares than the city was making from them.

The fare terminals. The maintenance on those terminals. The administrative overhead keeping track of what came in. All of it added up to more than the fare revenue. So they just stopped charging.

Before the change, 90% of riders reported there was at least one day a month they couldn't afford the bus. One day. That's the difference between showing up to work and not showing up to work, for someone living on tight margins.

Since it went free, ridership went up. Absenteeism across the city went down. And the system is actually running more sustainably than when it was collecting fares.

I keep thinking about this in the context of the businesses I work with in Atlanta and Albuquerque. How many things are we charging for, or tracking, or enforcing, where the friction of the system costs more than the thing itself? Parking fees that require a whole enforcement apparatus. Payment processing overhead that eats the margin. Policies that require full-time attention to maintain.

Sometimes the cost of the collection is the cost.

Richmond and Olympia are now running pilots of the same model. Albuquerque is the largest city to have done it, and they just voted to make it permanent after the city sent thousands of letters to city council making clear they weren't giving it up.

Hard to win a popularity contest taking away a free ride.

draft from corpus — based on NSFW Podcast ep. 131 (2024/2025)