Public transportation incentives and subsidies
Local governments can invest in this strategy using State and Local Fiscal Recovery Funds (SLFRF) from the American Rescue Plan Act (ARPA).
- This strategy provides household assistance that can help address the negative economic impacts of COVID-19. The U.S. Department of Treasury has indicated that strategies that help achieve this outcome are eligible for the use of Fiscal Recovery Funds.
- Investments in this strategy are SLFRF-eligible as long as they are made in qualified census tracts or are designed to assist populations or communities disproportionately impacted by COVID-19.
Program overview
Decreasing the cost to use public transportation: Public transportation incentives and subsidies seek to reduce the cost of public transportation for community members. There is some evidence that these approaches increase both public transit use and physical activity.
Offered by employers: Employers may offer commuter benefits to encourage employees to utilize public transportation. They may be in the employer's financial interest, as on average, they cost less than providing parking spaces for commuters. State and local governments may offer tax credits or other benefits for businesses that offer public transportation incentives. Similar incentive programs can also be offered by school districts or universities to their students.
Variety of employee benefit formats: Public transit incentives may take the form of free or discounted transit passes, reimbursement for travel expenses, or pre-tax payroll deductions that are then provided on a voucher, debit card, or other product or paid directly to transit operators. Typically, these incentives and subsidies have an upper spending limit determined by the employer or school.
Offered by transit agencies: Transit agencies may offer subsidies to decrease the cost of riding public transit. The amount of these subsidies varies by jurisdiction, and may be given as a flat rate (e.g., $1 discount per ride), a proportional discount (e.g., 50% off all rides), or a fully subsidized rate (i.e., $0 per ride). These discounts are typically loaded on designated transit cards or passes that eligible passengers can then use for any public transit ride.
Eligibility for transit subsidies determined by income: Often, transit subsidies are targeted toward populations that are more reliant on transit, such as low-income individuals and youth. In order to receive public transportation subsidies, individuals typically need to apply and provide documentation to meet any requirements (e.g., establishing their residency or income level).
- Strategies
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Public transportation access and subsidies
- Cost per Participant
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Approximately $250 per month per user
Multiple studies with rigorous designs provide some evidence for public transportation incentives and subsidies as a strategy for increasing physical activity and use of public transit.
- This assessment is based on evidence from a 2017 research synthesis.
Combine incentives with disincentives: When provided by employers, incentives for public transportation are more effective when combined with disincentives for using a single occupancy vehicle. For example, employers can increase parking costs alongside offering public transit credits.
Target campaigns to specific individuals: If resources for public transit incentives are limited, employers and schools may benefit from targeting interventions to specific individuals. For example, a business may target individuals based on the distance between their home and the office, or a university may choose to offer incentives only to students who are receiving financial assistance.
Partner with human services agencies: For public transit agencies aiming to build an income-based subsidy program, partnering with other public agencies can increase enrollment. Human services agencies make regular contact with individuals receiving government support, and as such can share information about the subsidy program with the intended population. These agencies may also be able to incorporate enrollment into the subsidy program into their intake process, assist in distributing any physical passes, and more.
Facilitate easy active transportation near transit stops: Encouraging people to bike or walk to their public transit stops may require adaptations to the built environment. Ensuring that there are nearby bike lanes and bike racks for storage can make it easier for people to travel by bike to transit stops. Similarly, adding features such as bright lighting and sidewalks can make public spaces near transit stops more walkable.