GRTC Will Extend Zero Fare Through June of 2026
The popular program that allows free rides on all Greater Richmond Transportation Company buses will be funded in the pending GRTC FY2026 budget.
In 2023, Axios reported that Richmond was one of the 9 localities in the entire United States that had seen its transit ridership increase relative to the pre-pandemic levels. Though there are several contributing factors to the disproportionate increase in passengers on the GRTC, the “Zero Fare” policy that was implemented in 2020 was no doubt a major contributing factor.
In what is becoming a yearly dance, the GRTC has included funding for the $6.8 million budget hole created by Zero Fare in its upcoming budget for the upcoming financial year, which begins this July. Per a recent correspondence I had with Jim Ingle, chair of the GRTC Board of Directors Finance Committee:
“The total cost to operate zero fare remains $6.8 million annually, and I want to emphasize that FY2026 is fully funded.” When asked for further comment he added “The budget has not passed yet so technically it is not officially funded yet, but zero fare will be funded in the GRTC 2026 budget.”
Funding in the FY2026 GRTC Budget extends the Zero Fare policy into June of 2026.
Possible Paths to Permanent Funding
Mechanisms that could be used to fund Zero Fare in perpetuity
In the March 13th GRTC Finance Committee Meeting, board members proposed one-time budget mechanisms such as borrowing from reserve funds (which are generally not used for yearly operating expenses) then returning them at the end of the year with surplus funds. They also acknowledged potential future revenue from endeavors such as bus wrapping, where businesses pay for advertisements displayed on the exterior of the bus.
Suffice it to say, without a permanent funding solution we will likely be having these same conversations about preserving Zero Fare on the GRTC this time next year. According to the advocacy group RVA Rapid Transit, that solution could come from a Transit Access Partnership (TAP). RVA Rapid Transit’s 2024 State of Transit Report describes a potential coalition of major stakeholders in Richmond who could provide a permanent yearly revenue source.
The idea of using the Transit Access Partnership to fund Zero Fare, however, may be currently moving in the wrong direction. On April 8th, VPM reported that VCU, who contributed $1.2 million last year towards Zero Fare, has not committed to continuing their contribution in the coming year.
Why Zero Fare Matters for Everyone
Ways in which Zero Fare directly and indirectly benefits the City of Richmond and surrounding counties.
Much of the conversation around Zero Fare is often centered around assisting members of the community who are disproportionately affected by fare collection. Per RVA Rapid Transit Executive Director Faith Walker, “GRTC collected 5.8 million roughly before pandemic. 1.8 million came from VCU and other employers up front to let their employees and students ride free. The other 4 million collected came from the poorest and most vulnerable riders.”
Subsidizing bus riders is certainly a crucial impact that Zero Fare provides, but perhaps potential TAP investors would be further enticed by many of the additional benefits of Zero Fare.
Per the American Public Transportation Association (APTA), “Every $1 invested in public transportation generates $5 in economic returns.” These returns come from both job creation resulting from public transportation expansion as well as the ability to transport more workers to more job sites efficiently. There’s also a case that public transportation contributes to a sense of place and community in a city, which in turn leads to more investment and growth. I tried to touch on this idea in the intro to my December 2024 article for The Richmonder.
The APTA suggests that public transportation is a means to major milestones such as reducing traffic congestion, reducing gasoline consumption, and lowering a city’s carbon footprint. These goals improve the experience of transit riders and car drivers alike, and Zero Fare is a demonstrated tool to increase willing participation in public transportation.
The Zero Fare policy also serves to make the bus riding experience more efficient. Prior to March of 2020, riders would each need to enter through a single front door to provide their payment or their rider pass, causing a line to enter the bus and increasing the amount of time the bus spent at a single stop. By eliminating the bottleneck at the fare box, riders of the local GRTC lines are now able to use both doors for entry or exit, allowing the bus to spend less time at each bus stop and more time making faster connections around the City.
A bus service with less delays organically attracts more riders, which thereby multiplies the congestion and climate improvements that the bus service provides.
The Limitations of Fare Collection
Perspective on the impact that fares provide to the overall GRTC budget
Faith Walker, RVA Rapid Transit’s Executive director, shares that the “GRTC Budget last year was 90 million dollars, so $6.8 million in fares is only 7.5% of their overall budget.” The remaining portion of the budget comes from a combination of grants, contributions from the Central Virginia Transportation Authority, and funding from government budgets such as the City of Richmond.
The $6.8 million figure is an estimate from the GRTC of the net revenue recovery provided by fare collection if it were to be re-implemented. According to the conversations in the March 13th GRTC Finance Committee meeting, fare collection would provide $8 million of revenue, but would cost $1.2 million to implement.
Walker states that “all the software on terminals and in hundreds of buses [have] to be updated” to resume fair collection, since the systems have been unused for 5 years and don’t support modern payments systems. Walker also mentions that fare collection will cause the GRTC ridership numbers to decline, suppressing the ridership gains made on the bus service over the past several years.
For transportation advocates like Walker, charging bus riders “doesn’t make sense.”
The burden to make the case for a permanent Zero Fare policy has been punted for another year, providing time for advocates and stakeholders to make the case for increased funding through either advertisement, community contributions, or other new sources of capital.
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