Free Transit for Riders: Luxembourg’s mission to reduce emissions

In 2017, Luxembourg started a free tram service to get residents out of single-occupancy vehicles. The convenience of cars still was too attractive. So the small country made all public transit free in 2020.

Luxembourg is a small landlocked country in Western Europe bordered by Belgium, Germany, and France. With an average per capita income of $133,590, it is the wealthiest country in the world (average per capita income in the US is $37,638). Luxembourg, however, only has a population of 665,000 – almost the same as Boston, MA and less than 0.2% of the total US population.

Prior to beginning this policy, only $43 million of Luxembourg’s $535 million public transit budget was funded by ticket sales.

King Car
Luxembourg had a car problem. As of 2020, they had 696 cars per 1,000 people, the highest in the EU (the US has 797 per 1,000 people). It’s estimated that almost nine out of ten households in Luxembourg own three or more cars.

The country’s low fuel taxes have enabled it to have some of the cheapest gas and diesel in Western Europe. “Car culture is truly dominant and it remains pretty tricky to attract motorists on board public transport,” the Luxembourg Institute of Socio-Economic Research’s Merlin Gillard told Agence France-Presse.

About 46% of Luxembourg’s workforce commutes from outside its borders each day, often filling up their tank before they return to their home country after work. This significant daily migration further exacerbates the challenge to luring commuters out of their private vehicles.

Definitions of success
Despite the free public transportation, the number of drivers remains high. “The financial motivation was too small,” Sergey Ves and Daria Saltykova wrote in Luxtoday.en. “Luxembourg remains a country with large incomes and cheap fuel. And the authorities did not artificially raise fuel prices so as not to exacerbate the energy crisis.”

Regardless, the country’s government continues to hail the revolutionary program as a success. “There is greater equity in this because those who pay little tax pay nothing or very little in this system, it’s really free. And those who pay more tax, obviously, they have a price that is perhaps a little higher,” said Luxembourg Deputy Prime Minister, François Bausch.

Free public transport is also hailed as a pillar of the small nation’s strategy to reduce its carbon emissions. In Dec. 2020, the country adopted a new climate law, setting a goal of reducing carbon emissions 55% by 2030.

Possible at home?
According to the Federal Transit Administration (FTA), and the Congressional Budget Office (CBO) nationally, about 40% of public transit operating costs and 25% of capital costs are covered by fare box revenues.

Across the U.S. though, several cities began free transit service pilots, often to lure passengers back after COVID-19 disruptions. Olympia, WA’s program began as a five-year pilot, and will continue until “services have returned to the service levels we provided in March 2020, or until January 1, 2028, whichever is later.” One month into the program, their ridership increased by 20% compared with their previous year.

Kansas City, MO made their busses and trams free in March 2020. While the program is due to sunset at the end of this year, the city’s government has pledged to make the city’s public transit permanently free. Shortly before the program began in February 2020, the University of Missouri Kansas City published a study that estimated ending public transit fares could result in a $2 million increase in regional GDP. Unfortunately, less than 13% of low-income households in Kansas City live near a bus route, and only 3% of the city’s residents report using public transit at all.