What are the real impacts?

The idea of making local public transport completely free is attractive due to its strong appeal to social equity and ecological transition. However, managing urban mobility requires rigorous planning tools capable of moving past aggregate estimates to accurately read the effects on budgets and overall service efficiency.

A recent simulation applied to the Milan metropolitan area, based on an advanced “activity-based” model (AcBM), analyzed the effects of entirely eliminating fares. The results offer policymakers a very clear picture: an indiscriminate policy generates systemic consequences that risk compromising financial stability and transport quality.

Modal shift and the risk of saturation
The simulation data confirms that free fares would make public transport much more attractive, generating a 25.3% increase in ridership. This new pool of passengers, however, has an unexpected composition. A portion comes from the abandonment of private cars, which sees a 12.2% drop. Yet, in an almost equivalent measure, public transport attracts users who give up active mobility: trips made on foot or by bicycle actually decrease by 11.8%.

The outcome of this dynamic is intense pressure on the infrastructure. People who previously walked short distances choose public transit simply because the marginal cost is zero. On main routes, such as Milan’s subways and trams, overcrowding peaks would reach +70% during rush hours. Such a load drastically reduces accessibility and comfort, primarily penalizing the most vulnerable users who lack travel alternatives, like the elderly or commuters

The real balance: a daily loss of 450,000 euros
The most sensitive issue for administrations concerns economic sustainability. The AcBM simulation allows for a precise quantification of the balance between benefits to the community and costs to public coffers. On one hand, there is an estimated social and environmental benefit of about 560,000 euros per day, deriving from fewer road accidents, reduced noise, and a sharp drop in polluting emissions.

On the other hand, the public system faces direct losses of 550,000 euros daily, divided among lost revenue from the Area C congestion charge, paid parking, and transit ticketing. If we analyze exclusively these two macro-indicators, the theoretical balance would appear to break even.

The element that triggers a structural deficit is tied to operational costs. To handle the 25.3% increase in demand while maintaining current comfort standards, the administration is forced to massively increase frequency and the number of vehicles in circulation. This necessary service upgrade generates additional operating costs that, when added to the lost revenue, bring the overall economic balance to an estimated deficit of 450,000 euros per day.

The importance of data-driven decisions
The financial difficulties recently experienced by the public transport company in Genoa, following the introduction of free fares unsupported by adequate structural funding, confirm the accuracy of the risks highlighted by the model.

Universal free transport proves to be a difficult measure to sustain. Data analysis suggests a more prudent and effective strategy for public decision-makers: using available resources to finance targeted subsidies for low-income groups and residents of peripheral areas, while simultaneously investing in upgrading the reliability and frequency of the vehicles. A punctual and well-distributed service is the true incentive for efficient urban mobility, guaranteeing the necessary balance of public finances.

Source: https://datamobility.it/magazine/trasporto-pubblico-gratuito-milano-simulazione-activity-based