Individual incentives for public transportation

There is some evidence that offering individual incentives for public transit increases public transit use (Brough 2022, VTPI-Litman 2017a, Graham-Rowe 2011, Zhou 2014a, Ghimire 2019, Bueno 2017, Dong 2016a, Yang 2015b). Such incentives can also increase physical activity for individuals who use non-motorized travel to and from transit stops (Saelens 2014, MacDonald 2010, Martin 2012, Webb 2012, Hipp 2017, Freeland 2013). However, additional evidence is needed to confirm effects.

Combining incentives such as discounted passes with improved transit service and higher private vehicle fees (e.g., increased parking costs) can increase public transit use and reduce automobile use (Petrunoff 2015, VTPI-Litman 2017a). Individual incentive programs that combine discounted transit passes with parking reimbursement (Lari 2014) and efforts to market incentives to employees can also increase transit use (VTPI-Litman 2017a). Transit pass incentive programs, such as offering free-fare cards, have been particularly successful at increasing public transit use among individuals with low incomes (Brough 2022) and may also increase use by college students (Zhou 2014a, Myers 2006). An Atlanta-based study suggests that employees provided with free or subsidized transit passes may be more likely to commute via public transit; however, if free or subsidized parking is also offered, then employees are less likely to use public transit (Ghimire 2019). High gas prices (Iseki 2015, Iseki 2014, Zhou 2011), not having children, and having a flexible schedule or one that matches transit availability also increase the likelihood of using a transit pass (Zhou 2011).

Model-based research suggests that reducing fares may generate small increases in transit use, while increasing fares may significantly reduce use (Chen 2011). Overall, price sensitivity to fares depends on whether a traveler is transit dependent (Miller 2017, VTPI-Litman 2017a), the type of trip, time of day, and geographic conditions, such as population density and the character of the built environment (VTPI-Litman 2017a). Distance-based fare reductions may increase ridership among households with low incomes, older adults, and minority individuals, who often use public transit to travel shorter distances than wealthier, younger, or white riders (Farber 2014). A Canada-based study suggests that a community-wide free bus program may increase older adults’ use of public transit, in part due to the cost savings and additional opportunities for social interaction (Mah 2017).

Transit users have higher levels of physical activity than non-transit users (Saelens 2014, Lachapelle 2009, Wener 2007). Incentives for public transit use have been shown to increase active travel options such as walking and cycling (Martin 2012, Coronini-Cronberg 2012), which may reduce the likelihood of becoming obese (MacDonald 2010, Webb 2012). Experts suggest public-private partnerships between, for example, public transit agencies and ride-hailing platforms, may help address the last mile problem (i.e., transit stations are not within walking distance to businesses, workplaces, or homes) by bringing transit users to their final destinations, and may increase public transit use (Siddiq 2022). Additionally, a Portland-based study that gave prepaid transportation services debit cards to transit users with low incomes suggests participants may increase public transit use and may expand their use of other types of transportation, such as bike shares and ride-hailing services (Tan 2021).

Individual incentives are a suggested strategy to reduce single occupancy vehicle trips, vehicle miles traveled (VMT), and emissions (CDC-Transportation recommendation, RAND-Sorenson 2008, Herzog 2007, Su 2012, Graham-Rowe 2011), and may be a cost effective strategy to reduce greenhouse gas emissions (Project Drawdown-PT, Gallivan 2011). Public transportation systems produce significantly fewer emissions per passenger mile than private vehicles, especially when operating with full passenger loads (US DOT-FTA Transit and climate, Project Drawdown-PT).

Incentive programs may increase transportation revenue (RAND-Sorenson 2008), reduce transportation costs for employers and individuals (RAND-Sorenson 2008, Myers 2006), and cost less than providing parking spaces for commuters (Lari 2014, Shoup 2004). A study of California transit agencies indicates transit pass programs for students or employees that are funded by the partnering school or employer may experience improved financial sustainability (Saphores 2020).

It is unclear what impact individual incentives for public transportation have on disparities in access to and use of public transportation. Individuals with low incomes may spend a larger portion of their budget on transportation and may rely disproportionately on public transit compared to others with higher incomes (Brough 2022). People with low incomes may be more likely to combine walking with public transit, and to use less transportation than they need or want, further limiting access (Tan 2021).

A Seattle-based study of a public transit program that provided free-fare passes to individuals with low incomes showed participants quadrupled their average public transit use (Brough 2022). An Atlanta-based study of employer-subsidized public transit passes suggests disparities in pass access may exist for individuals with low incomes, with the added complication of systematic barriers to quality transit options, which limits the use of available transit passes (Lachapelle 2018).

Experts suggest that if public transit agencies prioritize profits over access when designing incentive programs, people with low incomes may be more likely to lose access to public transit (Sun 2019).

Public transportation systems in the U.S. have been shaped by many factors, including car ownership, residential living patterns, federal funding, and the mass construction of interstate highways. Ultimately, the growth and sprawl of cities in the U.S. was largely driven by discriminatory housing policies and car-centric urban planning, which often prevents provision of equitable, consistent, and reliable public transit service (NASEM-Thomas 2022). The result has been uneven accessibility to viable and efficient transportation modes across regions and social groups, and overall reduced use of public transit (Lachapelle 2018).

In the 1980s, transportation experts recommended employer-subsidized transit incentives to encourage public transit use as a way of reducing the environmental impact of private vehicles, easing traffic congestion, and making travel more affordable. Beginning in 1984, federal tax law began to permit tax benefits for employer-paid transit benefits; over time, the ensuing acts increased the benefit amounts and expanded benefits to employees (Lachapelle 2018).

Other programs have sought to increase access to public transit through income-based programs for reduced fare or free-fare transit passes. In the past decade, Dallas, New York City, Portland, San Francisco, and Seattle have implemented large-scale, income-based reduced fare programs. Furthermore, several cities, including Boston and Salt Lake City, are working to eliminate transit fares for people with low incomes (Brough 2022).

• Who has limited access to transit in your community? How can planners engage local community members to learn about the challenges they experience and what incentives could increase access?
• How would a public transit incentive system impact access for current residents of your community? Which strategies and partnerships could help maximize the use of incentives?
• What opportunities are there to connect incentives for public transit with affordable housing efforts, Low Income Housing Tax Credits (LIHTC), inclusionary zoning, or other housing programs? Who can you partner with to increase these opportunities?
• Which local employers have employee incentive programs for public transit? Who could you partner with to support such programs or create new ones?

The federal government has a transportation subsidy program in place for any federal employee in the National Capital Region that uses public transportation to commute to work (US DOT-TRANServe). Some states (e.g., Oregon) award energy tax credits to businesses or organizations that offer financial incentives to encourage employees to use public transportation or alternatives to single occupancy vehicles for their commutes (ODOE-Transportation). Municipalities can adopt transportation management plans that include incentives to encourage public transportation use, walking, or bicycling, and reduce single occupancy vehicle use, as in the City of Alexandria, Virginia (Alexandria-TMPs). Additionally, incentives can be used to shift the time of travel to ease congestion, such as the Commuter Connections Flextime Rewards program in the Washington, D.C. area (Commuter Connections-Flextime).

Other individual incentives, such as transit pass incentive programs for employers, students, and state or city employees are available in many municipalities, including Austin, Texas; Seattle and Olympia, Washington; Monroe County, Pennsylvania; Nashville, Tennessee; Portland, Oregon (TRB-Boyle 2010); and Yolo County, California (Yolo-TRIP). The Portland Bureau of Transportation’s (PBOT’s) Transportation Wallet (TW) program, a collection of passes and credits that can be used for transit, streetcars, bike shares, and scooters, was established to reduce parking demand and congestion by increasing the use of alternative modes of transportation, including public transit and active transportation. PBOT expanded the TW program in 2019 to include an affordable housing pilot program that would bring a similar bundle of transportation credits to residents of affordable housing units in Portland (PBOT-Access for All).

‡ Resources with a focus on equity.

HPbD^‡ - Healthy Places by Design (HPbD). Advances community-led action and proven, place-based strategies to ensure health and wellbeing for all.

NCTR-Commuter benefits - National Center for Transit Research (NCTR). Commuter tax benefits. Center for Urban Transportation Research (CUTR), University of South Florida (USF).

Project Drawdown-PT - Project Drawdown. Climate solutions: Public transit.

SC DHEC-Air quality - South Carolina Department of Health and Environmental Control (SC DHEC). Your air.

SF Environment 2018 - San Francisco Environment Department. How to Implement a Commuter Benefits Program. City and County of San Francisco.

VTPI-Litman 2017 - Litman T. Evaluating public transit benefits and costs: Best practices guidebook. Victoria, BC: Victoria Transport Policy Institute (VTPI); 2017.

WisDOT-Public Transit - Wisconsin Department of Transportation (WisDOT). Travel by public transit.

* Journal subscription may be required for access.

Alexandria-TMPs - City of Alexandria, VA. Transportation & Environmental Services (T&ES): Transportation management plans (TMPs) - Special use permit.

Brough 2022 - Brough R, Freedman M, Phillips DC. Experimental evidence on the effects of means-tested public transportation subsidies on travel behavior. Regional Science and Urban Economics. 2022;96:103803.

Bueno 2017* - Bueno PC, Gomez J, Peters JR, Vassallo JM. Understanding the effects of transit benefits on employees’ travel behavior: Evidence from the New York-New Jersey region. Transportation Research Part A: Policy and Practice. 2017;99:1-13.

CDC-Transportation recommendation - Centers for Disease Control and Prevention (CDC). Transportation recommendations.

Chen 2011* - Chen C, Varley D, & Chen J. What affects transit ridership? A dynamic analysis involving multiple factors, lags and asymmetric behaviour. Urban Studies. 2011;48(9):1893-1908.

Commuter Connections-Flextime - Commuter Connections. Commuting solutions for Washington area employers: Flextime.

Coronini-Cronberg 2012* - Coronini-Cronberg S, Millett C, Laverty AA, Webb E. The impact of a free older persons’ bus pass on active travel and regular walking in England. American Journal of Public Health. 2012;102(11):2141-2148.

Dong 2016a* - Dong H, Ma L, Broach J. Promoting sustainable travel modes for commute tours: A comparison of the effects of home and work locations and employer-provided incentives. International Journal of Sustainable Transportation. 2016;10(6):485-494.

Farber 2014* - Farber S, Bartholomew K, Li X, Páez A, Nurul Habib KM. Assessing social equity in distance based transit fares using a model of travel behavior. Transportation Research Part A: Policy and Practice. 2014;67:291-303.

Freeland 2013* - Freeland AL, Banerjee SN, Dannenberg AL, Wendel AM. Walking associated with public transit: Moving toward increased physical activity in the United States. American Journal of Public Health. 2013;103(3):536-542.

Gallivan 2011* - Gallivan F, Ang-Olson J, Liban CB, Kusumoto A. Cost-effective approaches to reduce greenhouse gas emissions through public transportation in Los Angeles, California. Transportation Research Record: Journal of the Transportation Research Board. 2011;2(2217):19-29.

Ghimire 2019* - Ghimire R, Lancelin C. The relationship between financial incentives provided by employers and commuters’ decision to use transit: Results from the Atlanta Regional Household Travel Survey. Transport Policy. 2019;74:103-113.

Graham-Rowe 2011* - Graham-Rowe E, Skippon S, Gardner B, Abraham C. Can we reduce car use and, if so, how? A review of available evidence. Transportation Research Part A: Policy and Practice. 2011;45(5):401-418.

Herzog 2007* - Herzog E, Bricka S, Audette L, Rockwell J. Do employee commuter benefits reduce vehicle emissions and fuel consumption? Results of Fall 2004 survey of best workplaces for commuters. Transportation Research Record: Journal of the Transportation Research Board. 2006;1956:34-41.

Hipp 2017 - Hipp JA, Dodson EA, Lee JA, et al. Mixed methods analysis of eighteen worksite policies, programs, and environments for physical activity. International Journal of Behavioral Nutrition and Physical Activity. 2017;14(1):79.

Iseki 2014 - Iseki H, Ali R. Net effects of gasoline price changes on transit ridership in U.S. urban areas. San Jose, CA: Mineta Transportation Institute (MTI); 2014.

Iseki 2015* - Iseki H, Ali R. Fixed-effects panel data analysis of gasoline prices, fare, service supply, and service frequency on transit ridership in 10 U.S. urbanized areas. Transportation Research Record: Journal of the Transportation Research Board. 2015;2537:71-80.

Lachapelle 2009 - Lachapelle U, Frank LD. Transit and health: mode of transport, employer-sponsored public transit pass programs, and physical activity. Journal of Public Health Policy. 2009;30(Suppl 1):S73-94.

Lachapelle 2018* - Lachapelle U. Employer subsidized public transit pass: Assessing disparities in access, use, and latent demand. Case Studies on Transport Policy. 2018;6(3):353-363.

Lari 2014 - Lari A, Douma F, Yang KL, Caskey K, Cureton C. Innovative parking pricing demonstration in the Twin Cities: Introducing flexibility and incentives to parking contracts. Minneapolis, MN: Center for Transportation Studies, University of Minnesota; 2014.

MacDonald 2010 - MacDonald JM, Stokes RJ, Cohen DA, Kofner A, Ridgeway GK. The effect of light rail transit on body mass index and physical activity. American Journal of Preventive Medicine. 2010;39(2):105-12.

Madison Metro - City of Madison, WI Metro Transit. Metro pass programs.

Mah 2017* - Mah S, Mitra R. The effects of a free bus program on older adults travel behaviour: A case study of a Canadian suburban municipality. Case Studies on Transport Policy. 2017;5(3):460-466.

Martin 2012* - Martin A, Suhrcke M, Ogilvie D. Financial incentives to promote active travel: an evidence review and economic framework. American Journal of Preventive Medicine. 2012;43(6):e45-57.

Miller 2017* - Miller C, Savage I. Does the demand response to transit fare increases vary by income? Transport Policy. 2017;55:79-86.

Milwaukee Transit - Milwaukee County, WI Transit System. Commuter value.

Myers 2006* - Myers G, Hagen DA, Russo T, et al. Benefits of campus transit pass: Study of student’s willingness to pay for proposed mandatory transit pass program. Transportation Research Record: Journal of the Transportation Research Board. 2006;1971:133-139.

NASEM-Thomas 2022 - Thomas DN, Heer N, Wyatt Mitchell I, et al. Racial equity, Black America, and public transportation, volume 1: A review of economic, health, and social impacts. Washington, D.C.: National Academies Press; 2022.

NCTR-Commuter benefits - National Center for Transit Research (NCTR). Commuter tax benefits. Center for Urban Transportation Research (CUTR), University of South Florida (USF).

ODOE-Transportation - Oregon Department of Energy (ODOE). Transportation.

PBOT-Access for All - Portland Bureau of Transportation. Transportation Wallet: Access for All.

Petrunoff 2015* - Petrunoff N, Rissel C, Wen LM, Martin J. Carrots and sticks vs carrots: Comparing approaches to workplace travel plans using disincentives for driving and incentives for active travel. Journal of Transport & Health. 2015;2(4):563-567.

Project Drawdown-PT - Project Drawdown. Climate solutions: Public transit.

RAND-Sorenson 2008 - Sorenson P, Wachs M, Min EY, et al. Moving Los Angeles: Short-term policy options for improving transportation. Santa Monica: RAND Corporation; 2008: Monograph Report 748.

Saelens 2014* - Saelens BE, Vernez Moudon A, Kang B, Hurvitz PM, Zhou C. Relation between higher physical activity and public transit use. American Journal of Public Health. 2014;104(5):854-859.

Saphores 2020 - Saphores J-D, Shah D, Khatun F. A review of reduced and free transit fare programs in California. Irvine: University of California Institute of Transportation Studies; 2020.

Shoup 2004 - Shoup DC. Eco passes: An evaluation of employer-based transit programs. Los Angeles: University of California Transportation Center (UCTC); 2004.

Siddiq 2022* - Siddiq A, Tang CS, Zhang J. Partnerships in urban mobility: Incentive mechanisms for improving public transit adoption. Manufacturing and Service Operations Management. 2022;24(2):956-971.

Su 2012* - Su Q, Zhou L. Parking management, financial subsidies to alternatives to drive alone and commute mode choices in Seattle. Regional Science and Urban Economics. 2012;42(1-2):88-97.

Sun 2019* - Sun Y, Zhang L. Microeconomic model for designing public transit incentive programs. Transportation Research Record. 2018;2672(4):77-89.

Tan 2021 - Tan H, McNeil N, Macarthur J, Rodgers K. Evaluation of a transportation incentive program for affordable housing residents. Transportation Research Record. 2021;2675(8):240-253.

TRB-Boyle 2010 - Boyle DK. TCRP Synthesis 82 - Transit fare arrangements for public employees: A synthesis of transit practice. Washington, D.C.: Transportation Research Board (TRB); 2010.

US DOT-FTA Transit and climate - U.S. Department of Transportation (U.S. DOT), Federal Transit Administration (FTA). Public transportation's role in responding to climate change. 2010.

US DOT-TRANServe - U.S. Department of Transportation (U.S. DOT). TRANServe

VTPI-Litman 2017a - Litman T. Transit price elasticities and cross-elasticities. Victoria, BC: Victoria Transport Policy Institute (VTPI); 2017.

Webb 2012* - Webb E, Netuveli G, Millett C. Free bus passes, use of public transport and obesity among older people in England. Journal of Epidemiology and Community Health. 2012;66(2):176-180.

Wener 2007* - Wener RE, Evans GW. A morning stroll: Levels of physical activity in car and mass transit commuting. Environment and Behavior. 2007;39(1):62-74.

Yang 2015b* - Yang L, Hipp JA, Adlakha D, et al. Choice of commuting mode among employees: Do home neighborhood environment, worksite neighborhood environment, and worksite policy and supports matter? Journal of Transport & Health. 2015;2(2):212-218.

Yolo-TRIP - Yolo Commute. The Rideshare Incentive Program (TRIP). Yolo County, CA.

Zhou 2011* - Zhou J, Schweitzer L. Getting drivers to switch: Transit price and service quality among commuters. Journal of Urban Planning and Development. 2011;137(4):477-483.

Zhou 2014a* - Zhou J. From better understandings to proactive actions: Housing location and commuting mode choices among university students. Transport Policy. 2014;33:166-175.