Keeping it Fare: How to Make Public Transport Fares Affordable

This policy brief takes on one of the most pressing challenges facing the public transport sector today: how to ensure services remain financially sustainable while keeping fares accessible and affordable for all.

Affordability is not only about the price of a ticket. It is about guaranteeing equitable access to mobility, preventing people from falling into transport poverty, and enabling the shift toward more sustainable travel choices. For many households, mobility already accounts for 10-20% of their budgets, and for some, more than 30%. When fares become too high, families risk being cut off from jobs, education, and essential services. This has far-reaching social and economic impacts, undermining public transport’s role as the backbone of urban life. At the same time, fare revenues remain a critical part of operators’ budgets. Balancing affordability for passengers with financial stability for systems is the central concern the brief explores.

The brief makes clear that the cost of public transport cannot be assessed in isolation. It must be weighed against household budgets, the costs of using a car, and service quality. Only by taking this broader view can policymakers judge whether fares are truly fair and whether public transport remains a viable option for all.

To assess whether fares are genuinely affordable, authorities need reliable ways to measure the burden on households. Instruments such as household expenditure surveys or affordability indices track what share of income different groups spend on mobility, providing the evidence base to guide timely policy adjustments.

Policy Toolkit

The brief sets out a policy toolkit with three main strategies to design fare policies:

1. Price and volume-based measures, such as discounted passes or fare caps, which ease costs for frequent users and simplify choices.
2. Fee-based and solidarity approaches, where groups such as students, workers, or tourists contribute collectively, often supported by employers or local levies.
3. Income-based schemes, which link fares to verified household resources so that subsidies reach those most in need.

Several case studies support these approaches in practice, revealing both the potential benefits and the trade-offs in terms of ridership, revenue, and equity. In Brussels, low-priced youth passes made public transport more accessible to young people. Brazil’s integrated fare reductions show how linking modes can cut costs for everyday riders. Germany’s nationwide Deutschlandticket highlights the impact of a simple, flat-rate product on ridership, while Lisbon’s metropolitan pass demonstrates the benefits of simplifying complex fare structures.

The brief also stresses that fare policies only succeed if they are backed by predictable and timely public funding. When compensation is delayed or uncertain, operators face financial strain and may be forced to cut services, which ultimately undermines affordability for passengers. To avoid this, the brief points to the importance of transparent formulas for adjusting fares. Linking changes to factors such as costs, wages, energy prices, and service capacity creates a more stable framework, while still allowing flexibility to pause or defer increases when economic conditions demand. Examples from Singapore and Hong Kong show how such approaches can strike a balance between affordability and sustainability, while also building public trust through clarity and consistency.

This UITP brief calls for a holistic approach: pairing stable funding with targeted fare products, keeping fares competitive with the marginal cost of car use, and embedding transparency in how adjustments are set. Affordability measures should go hand in hand with investments in service quality – only then can public transport deliver on its promise of fair access, greater social equity, and a stronger contribution to sustainable urban mobility.

Key Recommendations

Although each city and country is different, with its own specific history, economic situation, and political priorities, there are nevertheless commonalities across different cities to be identified and best practice examples to be shared.

1. An adequate level of public transport supply with affordable fares requires both public funding and fare revenues. There should be a public contribution to the cost of public transport, in addition to the revenue from fares paid by direct users, i.e. passengers. This public contribution is justified by the general benefits of public transport, which contributes positively to the whole society.
2. The fares paid by public transport passengers should be affordable for all segments of the population and be competitive to the (marginal) cost of car use. It is therefore important for local authorities to keep track of passenger costs and the mobility expenditure of different user groups.
3. Social or concessionary fare products to cater to different needs can ensure affordable fares for the most vulnerable user groups while maintaining a reasonable overall contribution from fares to the overall cost of public transport.
4. The deployment of social tariffs should be done in a targeted and limited way to avoid the erosion of the fare base and economic pressure on the system’s service level.
5. A fare formula linked to service offering, inflation and affordability might help set the right fare levels over time and enhance transparency in the debate on fare increases.
6. Affordable public transport fares should be combined with service quality improvements to create a conducive ecosystem to attract and retain more public transport users, thereby creating a positive feedback loop.