Increased ridership and improved affordability: Transforming public transport subsidies in developing contexts

Abstract

In Latin American cities, the affordability of public transport presents a significant obstacle to mobility. To address this challenge, several cities have implemented subsidies. Understanding the effectiveness of these subsidies is crucial, particularly in cities where a substantial portion of the population, especially those with low incomes, rely on public transport systems. This paper presents a case study conducted in Bogotá, Colombia, employing a randomized controlled field experiment involving 1607 participants. In this intervention, a randomly selected group of frequent public transport users received a cash transfer on their travel cards (a transport voucher) for four months. We aim to estimate the causal effects of providing these vouchers on ridership and affordability. The findings indicate that vouchers on average, increased ridership by up to 9% compared to the control group. This increase was most pronounced on weekdays and during peak hours. Vouchers proved particularly advantageous for populations with low fare-demand elasticity, who constitute the primary users of public transport. Furthermore, it improved their affordability by between 18 and 26%. In summary, our results indicate that providing subsidies in the form of vouchers can effectively boost public transport usage, thereby enhancing affordability for users.