Op Ed

Don’t Make Streetcar Rides Free

Change from free to paid rides will alienate users, hurt the system.

By - Jan 2nd, 2018 12:16 pm
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A rendering of a Brookville streetcar in Milwaukee's Third Ward. Milwaukee's streetcars will be manufactured by U.S.-based Brookville Equipment Corp.

A rendering of a Brookville streetcar in Milwaukee’s Third Ward. Milwaukee’s streetcars will be manufactured by U.S.-based Brookville Equipment Corp.

Dear Hop,

Can I call you Hop? “The Milwaukee Streetcar” is nice and formal and all, but “Hop” is only three letters. So much easier to type.

Anyways, Hop, I am excited about the progress you’ve made. Things are on time! On budget! And all kinds of details are falling into place, including the big major sponsorship news from a few months back: Potawatomi Hotel and Casino is paying the fare of every single rider for the first year.

On the surface, that’s amazing news. It continues to show the City of Milwaukee is doing its darnedest to live up to its promises about you, Hop.

But free rides for a year is a terrible, terrible idea.

Now look, Hop, you know I love you, right? I have written in favor of you repeatedly over the last few years. I defend you ardently on social media long past the time my wife thinks I should stop arguing.

But I hate, hate, hate the idea of free rides on you for the first year.

Why? Categorical change. Do you know about the Red Cross and the donuts? I heard about it on NPR once.

Here’s the short version: In World War II, the Red Cross offered free coffee and donuts to American soldiers overseas. They charged soldiers from other Allied nations a quarter a donut, though, so there was some animosity as you might expect. The War Department kindly asked the Red Cross to charge American soldiers, too, and the soldiers flipped out.

Even today, according to economist Russ Roberts who studied this, many WWII vets still fume over the whole deal.

See, Hop, a categorical change and a price change are not the same thing. A price change is a change within a category—milk used to cost two bucks a gallon, and now it costs three bucks. It cost bucks before; it costs bucks now. No biggie.

But when something goes from free to not-free, that’s a whole other keg of beer, Hop. All of a sudden the thing that was over here—free donuts!—is now over there—donuts, two bits! And the people offering the free thing now have changed their relationship with the customers, and customers don’t like that kind of change.

Imagine, for example, if Facebook suddenly announced it would cost $10 a month. Well, I tell you what, I bet MySpace would come roaring back!

Or think of the airlines, when they started charging for checked bags, window seats, legroom, or a crossword somebody else hasn’t finished yet. If there were any other way to get from Milwaukee to Miami in two hours, Mitchell airport would be a ghost town.

So what I mean is, don’t do free rides. Charge something, even a nominal amount—a quarter per ride, for example (one donut’s worth!). Or a dollar for a day pass. Or maybe ten bucks for a month.

If you’re free one day and not free the next, Hop, people will start freaking out like the troops did against the Red Cross. And sure, yeah, you were probably always expecting some drop-off in ridership after the free year ends. But what if it’s not some drop-off, but a deep, deep dive? With your riders now super angry that you started charging?

This should be an easy fix, Hop. We’re far enough away yet from the first rides that a change in policy announced now will be long forgotten by the time they cut your ribbon with those giant scissors.

Hop, you can even make it seem like you’re really doing the city a huge favor: Announce that you want to stretch Potawatomi’s generosity over two years, and charge a token amount for the first 24 months.

Anyways, Hop, I look forward to riding you when you’re all finished and open later this year. But I hope I have to pay at least a little something when I do.

Jay Bullock is a Milwaukee teacher and writer. Follow him on Twitter @folkbum.

More about the Milwaukee Streetcar

For more project details, including the project timeline, financing, route and possible extensions, see our extensive past coverage.

Categories: Op-Ed, Transportation

30 thoughts on “Op Ed: Don’t Make Streetcar Rides Free”

  1. tom says:

    Big difference Jay from the Red Cross example. Everyone knows they will have to pay after one year and they know how much it will be. I appreciate the free ride gesture by Potawatomi. I plan to hop around town from coffee shop to coffee shop for pure enjoyment, and for free.

  2. MidnightSon says:

    I tend to agree. Why not have some of the Potawatomi funding subsidize but not completely fund fares for the first year, and use the remainder of the Potawatomi funding for other things–study, outreach, competition for streetcar stop design, etc.? 🙂

    While the The Hop and the Red Cross example are not completely analogous, going form paying nothing to paying everything is a big mental step for many.

    If The Hop/Milwaukee really wanted to get really creative, it would use the funding to help subsidize the first three months of transit cards that people could use not only on the streetcar but also on the bus system and Bublr Bikes–and eventually BRT.. Using the Hop would definitely be part of the plan, but this could be a win-win-win for many people and entities. This would probably be too forward thinking at this point for entities to rally around, but it could produce greater long-term value than a year of free service.

  3. mike says:

    I’m fine with them not charging. This project has generated a ton of new tax base downtown, thus it’s already been a huge winner to the city & county and it hasn’t even opened.

    I’d love to see it extended along the legacy Howell Ave streetcar line (the second-to-last line to close in the 1950s) at least to S. 1st street & KK/Mitchell, but preferably to Humboldt Park. That corridor through Walkers Point could definitely be developed as a logical continuation of the Water Street corridor, which would result in a huge amount of tax base and increased connectivity to Bay View and eventually the airport.

  4. iced tea says:

    The Streetcar will be free, and you will be excited about that.
    If The Streetcar was not free, far less people would endure the complications involved with riding the slowest rollercoaster to whatever in the state.
    Not mentioned in the discussion of “free” items/services in this article is where people had NO value for these things until they were available, in wide use, and their value had been established- it’s called promotion.
    If people are going to find/create any value for this thing, the barriers to participation need to be eliminated as much as possible. Potawatomi picking up the first year is a major victory towards sparing a maximum number of streetcar users from our city/county/state dysfunction regarding transit.
    Perhaps unfairly, I suspect this entire article to be a false premise masking concerns that The Free Streetcar will become a rolling homeless shelter and/or safe injection site if a “paywall” is not present. It’s gonna happen to some extent, but if the max possible riders are trying to give this stupid thing a chance, those challenges might seem much smaller.
    Perhaps more unfairly yet, is the possibility that a future is being set up in this article to excuse the failure of this enterprise to live up to it’s promises based on a few panhandlers, or some donuts and coffee thing.
    In less than a year, Milwaukee will have a streetcar that most voters were fine not having -make it work.

  5. Jay Bullock says:

    @Tom, you say “everyone knows they will have to pay after one year” but that, I think, overestimates the level of attention most people are paying to a thing that right now only exists as a construction site. And the idea that people know it will eventually be $1 is really, really assuming a lot of facts not in evidence. (I had to look up the fare, and I have been following closely for years now.)

    @mike, while I, too, am excited about the development downtown, that’s a separate issue. Sustainable ridership is a must, and irritating riders with a sudden change from free to not-free seems like a bad idea on many levels.

    @iced tea, you have no particular reason to know me or my past writing about the streetcar, none of the motives you impute to me exist. And, yes, you’re right about the value of promotion, but “promotional introductory rate” does not have to equal “free.”

  6. Nicholas says:

    tom is right, Jay. Your analogy of the Red Cross doughnuts doesn’t apply here. The city has already said the free rides will be for the FIRST YEAR ONLY. That in itself puts a limit and, therefore, cost on the service. It’s why so many companies use free trials for memberships.. LinkedIn does this frequently, as do phone carriers and internet service providers.. “First 12 months free HBO!” is a much bigger difference than “Free HBO for everyone!”… the public is made aware of the caveat and recognizes the limits of the offer.

    Also, this isn’t 1943.

  7. Jim says:

    I agree completely. It’s so hard to “take back” something once given without triggering feelings of loss and resentment – no matter how illogical those feelings might be.

    I also think that “free” will not create any long term “inertia” of use. There needs to be some level of engagement to get those initial rides.

    Does anyone know how fares will be collected once the streetcar does start charging? Will there be a QR code reader you scan on boarding or similar? I would expect the best answer is a smart-phone enabled process with some sort of backup that uses a card for those very few non-smartphone-users? If that is the case, free riding should still require that level of engagement. If it’s nothing more than “hop on – hop off” for free in the first year, the system is setting itself up for a little chaos in the beginning, a little chaos when free rides end, and a forced “change in habits” after one year of use….

    I like the idea of a nominal charge, but would even be OK with a “pay and get a refund”. If I were in Potawatomi management, I’d have the fastest refund method be a visit to an ATM like kiosk in the casino where the user gets their ID code scanned and the refund is instantly applied. Folks not willing to get the refund by that method can request by other (easy) means, but the refund does not show up until a week or two later.

  8. Lynn says:

    I’m with Jay. Start charging immediately. People get weird about paying nothing and then having to pay something. Hop folks, don’t do it!

  9. Mandi says:

    I agree that there should be a nominal fee from the get go, also for the reason that people put VALUE on a thing they have to pay for, and the amount isn’t important.
    If it’s free, it’s seen as “cheap” as in “crummy,” not as in “thrifty.”
    We want to brand the Hop to appeal to all people, including more well-off folks, not just a charity geared for “poor people” (no harm meant by that comment; I’m referencing the reality that some folks may be reluctant to get on the Hop if they imagine that it’s a service only used by others of a different social and economic class than them.)

    Secondly, it’s absolutely imperative that there is a single pay system among MCTS and the Hop! I wanna beep my fare card anywhere and not have multiple accounts. This would reduce a major barrier for tourists who came in from a flight, say, and who don’t want to figure out multiple payment systems when they’re tired and carrying luggage.

  10. 2fs says:

    “Everyone knows,” Tom?

    I didn’t.

    I think Jay’s analysis is correct.

    Mandi also makes some good points…

  11. Troll says:

    I almost never agree with anything Jay writes, but Jay is right. Passengers need skin in the game and paying something may keep the homeless from living on the trollry.

  12. Jay Bullock says:

    @Nicholas, you bring up cable. Good idea; I think the correct analogy is not “free HBO” but “free cable,” period.

    The “free HBO” is an enticement to get viewers to spend a much larger amount of money on a much larger package than they might otherwise have. The free Hop rides entice riders to spend money on … nothing. A good Hop comparison to free HBO as part of a cable package might be a free beer with every paid hop ride, or–as someone else suggested above–rides on *all* Milwaukee-area transit with your purchase of a Hop pass.

    @Troll … thank you?

  13. Jon says:

    I’m still convinced a free ride is excellent exposure to this great addition to the city. Demonstrate potential of the product to future passengers builds rider base.

  14. Fred says:

    The potential homeless issue does need to be considered seriously. I live downtown and commute to work on MCTS, so I’m pro-city and pro-transit. But realistically there’s no way around the fact that a lot of people will give up on ever riding again if their first experience is getting on a car in which most seats are filled with sleeping homeless people.

    Avoiding that may not necessarily require that a cash fare be charged, but if not then there will have to be some creative thinking about what sort of ridership policy will prevent that, and how to enforce it.

    I also second @Mandi’s comment above about unifying the fare systems.

  15. Nicholas says:

    Jay,
    I’m afraid you misunderstood the example I gave and that’s probably my fault for not explaining it more clearly. What I was getting at isn’t that cable companies sometimes offer free HBO, it’s that when they do, they do so on a limited basis of time: “free HBO for first six months” is the typical offer. After the six months you pay full price for HBO because you are addicted to it. Perhaps a better example would be when you buy a new mattress..the usual offer is “try it for the first three months and if you don’t like it, return it and you pay nothing”.
    This is a successful strategy, especially when you’re offering a unique product that you are confident your customers will love and want more of. The time limit of the offer is the difference here, Jay. By setting that limit, you are laying out a clear contract with your customers. This is not like the Red Cross doughnuts where the customers had received an item with no other information than this was a goodwill item and thus came to the assumption the doughnuts would be free indefinitely.

    This is very very different, because the city is setting a clear boundary to the offer. I’ll put it in these advertising-like words for clarity:
    “You get this (free rides on the streetcar) for exactly one year (from the date of the start of service). After that time, if you are not 100% satisfied with your service, you don’t ever have to take another ride again. You can keep all the rides you took the first year at no cost and don’t ever have to ride again. We are so confident that you will love your service, that we will continue to offer it to you after the first year for the low low cost of X. In coming years, you will also be able to enjoy enhanced service to extended lines and more offerings…”

    Hopefully that makes a bit more sense.

    The goal is that people will enjoy the product for its unique value during this trial period and will grow accustomed enough to it to want to keep using it even after the trial period is over.

  16. Q says:

    I don’t think free is ever a good thing when it comes to large cities. From working in promotions, free brings out the worst people and the worst in people. I agree that there will be backlash.
    I don’t agree with the doughnut analogy, that would be like if we charge Chicagoan’s to ride the trolley and the mayor of Chicago would complain, so halfway through the 1st year Hop would start charging everyone.
    That being said, I hope the people calling the shots on this have spent time downtown especially on public transportation. A free ride is also a warm place in winter and a cool place in summer, be prepared for massive drunk crowds on holidays, and be prepared for the nightmare of the downtown grid during summerfest, fun runs, and festivals.

  17. mike says:

    To Jay’s comment – I think we can all agree this city certainly needs more tax base. It seems to me, we could run the thing down S. 1st street and turn that area into an extension of the third ward within a decade, which would be 100s of millions in new tax base from a relatively small 10s of millions investment. So long as we can invest 10s of millions and return 100s of millions in new base, it’s absolute no brainer. If we define success as “it’s got have X number of riders, blah blah blah” while ignoring that parking lots are being turned into 40 million dollar buildings, we’re missing the point. We’re trying to make great, prosperous city – we have to define success in those terms.

    Success is: downtown from Mitchell Street in the south to, say, North Ave is packed full of high value, tax-paying, job creating properties. If we get anything close to that an investment that’s less than a 1/10 the cost of the zoo interchange, that would be a Warren Buffet-level investment. And from the level of activity happening pre-opening, it seems possible.

  18. Virginia says:

    Jay makes some convincing points.

    What about data from any other cities that offered free streetcar rides and then charged for them?

    I recall riding a free streetcar in Portland some time back. I think the free zone then was only within the city center. But I don’t know if that’s still the case or if it was a promotional effort.

    I was also impressed that I could take light rail from the airport to downtown Portland, for a very affordable cost.

  19. Jay Bullock says:

    @Virginia, you are dead right that the airport needs to be an extension very soon. Unfortunately, the alderman whose district the Hop would need to travers to get there is 1) staunchly opposed to the streetcar and 2) running for mayor with that as one of his two main issues, the other being MOAR POLEECE.

    As to Portland, a quick Googling shows that there was a “Fareless Square” in downtown Portland for decades, where rides on all transit types were free. That ended in 2012. Crucially, it was just a part of the city, not system-wide, and riders knew they had to pay beyond that zone.

    @Nicholas, I think *that* is actually a better example of “free HBO.” Your cable isn’t free, but HBO is for a time; your transit isn’t free, but within a small area downtown it is for a time.

    Checking Portland Streetcar ridership stats, it looks like ending the “Fareless Square” did not hurt ridership (it has increased annually since). But again, right now that’s a very, very imperfect companion to the “one year free” on the Hop.

    https://storage.googleapis.com/streetcar/files/Ridership-Counts-from-2001-to-Nov-2017.pdf

  20. Jay Bullock says:

    @Nicholas, I should also address your mattress analogy. About a year ago, I bought a new mattress, one of those “100-night sleep guarantee” ones that advertises on your favorite podcasts. Guess what? I paid when I ordered it. I put in my credit card number. They charged me.

    I knew I could return it and get a refund (it’s nice! I want to keep it!), but the difference here is that I *paid up front*. No one offers you a free mattress without a contract and you paying upfront; at best, they offer to finance it for you and set the first loan repayment date 90 days in the future (interest accrues from day one, of course). But you still go through the rigamarole of signing loan paperwork and a credit check.

    With fee rides on the Hop, you don’t pay up front, you don’t sign a contract saying you will pay later.

    And, again, I believe you are putting *way* too much faith in the ability of casual transit users to know that the free rides are temporary, when that ends, and what it will cost thereafter. While readers of UrbanMilwaukee care about this issue (see the seven screens of links to previous stories you have to scroll through to get to the comments here), most people aren’t paying attention.

  21. TransitRider says:

    Mandi, a “single pay system among MCTS and the Hop” would be illegal under current state law. Wis Stat 85.066(3) explicitly prohibits any revenue sharing between the County and Hop. If Hop accepts MCTS passes or transfers, it must do so for free—no fare money going to Hop.

    This was one of several anti-streetcar state laws enacted under Scott Walker. This law must be repealed before any combined MCTS/Hop fare can be established and that repeal won’t happen under the GOP.

    https://docs.legis.wisconsin.gov/statutes/statutes/85/06

  22. Milwaukee Native says:

    Re: TransitRider’s info, I wonder whether GOP legislators will ever come to realize that thwarting, if not killing, Wisconsin’s biggest city and economic generator will ultimately destroy any hope for Wisconsin’s vitality in the long run?

    Obviously, it’s good for for those legislators’ campaign fund-raising, and maybe for blood sport, but when will any sane Republicans try to stop the torture and bleeding of Milwaukee?

  23. MidnightSon says:

    @Virginia – I’m totally on board with reliable and efficient transit from the airport to downtown, but I wonder if the streetcar is the way to do that. My initial thinking is that thinking more regionally and bringing Metra up from its Kenosha terminus through Mitchell International and on to downtown Milwaukee would be the way to go. A dedicated rail line with two stops at most between Mitchell and downtown would be super quick. And, we get the added bonus or real rail connectivity between communities in SE WI and NE IL. (Metra currently only costs $5/person from Kenosha to the Chicago Loop. Super affordable!)

    The streetcar should go south at some point and to some extent, but I don’t know about the airport.

    Naturally, the streetcar will If the powers that be decide that the streetcar is the way to go to connect to the airport, I say it would need to go right to the airport and then serve as a connecting spur from Mitchell to the Amtrak station about a mile west.

  24. MidnightSon says:

    @TransitRider – I agree that Republican legislators have it in for the streetcar project and Milwaukee.

    That said, I believe there is a difference between revenue sharing addressed in the statute you cite and the single pay system mentioned by others. I’m used to using a single card/system in cities to pay for trips on many different transit providers. For example, the Ventra card down here allows me to pay my fare with one card on either CTA, Metra or Pace. In the San Francisco Bay area, the Clipper card allows a passenger to use one payment system for fares on a couple dozen transit systems.

    Revenue is not shared, only the system by which the rider pays. Super convenient and not, to my understanding, currently illegal in Wisconsin.

  25. Virginia says:

    MidnightSon: Yes, I agree. In Portland, it’s light rail that connects to the airport, and also to other cities.

    https://trimet.org/max/

    Not sure how that system relates to the streetcar in terms of fares and such. I just recall how easy and pleasant it was to get around Portland.

    It will help Wisconsin’s economy and citizens if we can start thinking/planning regionally, especially about transit. Otherwise we’ll be going nowhere–FAST!

  26. Jay Bullock says:

    @MidnightSon, what you’re describing is the now-dead KRM Connector, which would have been rail to connect greater Milwaukee to the Metra in Kenosha (with a stop in Racine, hence the R). See http://archive.jsonline.com/newswatch/126116213.html

  27. iced tea says:

    Thank you for weighing in TransitRider, I would add the possibility that Milwaukee County is none too excited about fare mixing for a number of reasons.

    Wikipedia regards Portland’s “free zone”:
    https://en.wikipedia.org/wiki/Fareless_Square#cite_note-oreg-2009oct27-2

    “controversy” section at bottom

    IIRC a study suggested that 90% of security incidents involved people who did not pay a fare. I am not vouching for the science behind that study, or my memory of it.

    I don’t think Milwaukee has concerns anywhere similar to those in Portland, and the starter route here really isn’t very long.
    My impression was that most, if not all other systems similar to ours are either free, or linked to a larger system. Again, I would stress the possibility that the drama of fare complications is more problematic than a few doofi.
    I totally encourage TransitRider’s comments.

  28. Wanderer says:

    When Atlanta’s streetcar started charging a fare, ridership plunged dramatically.

  29. Cassandra says:

    The psychology research supports Jay’s and Mandi’s points about needing to start with a token fee.

    It’s well-established that when things are free and require no effort, it’s seen as cheap/crummy. A little obstacle will create more robust buy-in. (You only pay HBO bills once in a while, not every time you watch — it is a one-time “special offer if you do the paperwork and the subscription auto-renews at a price if you’re lazy”, is that right? — which creates a different dynamic.)

    But as for a positive action to take: Free samples work not just because you like the thing, but because many people feel guilty for taking advantage, so they buy. (Others really do go ahead and take advantage.)
    So: Maybe a wide (direct-mail?) distribution of “Free One-Month Pass” chits or a QR code/registration/app could accomplish the goals of (1) getting people on, (2) giving them enough time to make it a habit, and (3) helping people see that they actually DID get something of value.

    There’d be logistics to work out, but this might solve the problems while keeping the benefits.

  30. iced tea says:

    Meat in the seats.
    I seriously have spoken to one person IRL who is excited about this in all the years this has been going on, and that discussion had nothing to do with the priorities this project is based on. Telling people not to get me started who offer unsolicited commentary that “the streetcar is stupid” has been greater than a weekly occurrence in the last few months.

    It is not a totally bonkers suggestion that most people in this city/county/state are not, and were never supportive of this project. I wonder if this resentment might multiply once the streetcar is operational, and people are presented with a tangible example of misplaced priorities.

    Whining over yesterday’s spilled milk is not the point of suggesting a pre-existing environment, getting haters like myself, and a majority of the city/county/state voters to ride, and realize it’s maybe not the end of the world -is.
    Clench your teeth, and make it easier for me and the rest of the haters to do the same when we all eventually ride the stupid thing- hopefully sooner, than later. -make it work Milwaukee!
    Meat in the seats.

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