Date of publication: 10 September 2018
Vitali Galitskihh, Lawyer, Head of Tallinn Office
Source: Economic Pravda
Estonia has become the first European country to offer free public transport.
The corresponding resolution was signed by Kadri Simson, the Minister of Economics and Infrastructure. To be more precise, the Minister signed a resolution approving the prices for the county bus lines, which do not apply to the intracity lines and commercial intercity transportation.
By mid-May the public transport centers should have reported how much money they needed to constrain the network of lines of free or privileged travel, and in case the transport centers want to offer a reduced fare instead of free travel, they will receive a subsidy of an appropriate amount.
The county bus lines are the most accessible form of public transport in each of the Estonian counties, with approximately 18 million trips recorded per year. Since these business fields are economically disadvantageous for private companies, the state has subsidized them.
In 2017 Estonia subsidized such lines by 21.7 million Euros, and local governments by 3.2 million more, having received from the ticket sales 11 million only.
The above statistics demonstrates that two-thirds of the bus service cost in rural areas was in one way or other covered by the state. To this end in 2018 as much as 34.8 million Euros were included to the budget for these purposes, which allowed releasing the county residents from the travel fare.
In support of her decision the Minister of Economics and Infrastructure Kadri Simson noted: “Our country has an opportunity to improve this sector. Now is the time to take a step forward. We would like people in rural areas to prefer using public transport rather than their cars. We need an alternative to help workers save money and reduce the cost of living in rural areas. One of such methods is the introduction of free county buses. I believe that choosing the rural area as a place of residence should be encouraged rather than punished”.
It should be noted that since January 1, 2013 Tallinn became the first European capital to cancel the fare for city residents. Before that the fare was 1 Euro if buying ticket in advance, and 1.6 Euros if buying it from the bus driver. Based on the city council estimates, from that point on a family of 4 people managed to save on travel up to 600 Euros per year.
The main reason for the introduction of free public transport in the city was the desire to unload the road traffic from private cars and reduce traffic jams in the city. To this end the parking spaces were created at the final stops of public transport, where every citizen could leave the car and move around the city using public transport; parking on the parking lots within the city center is fee-based and costs around EUR 1.5 per hour.
Since public transport became free to the capital residents only, its introduction led to an unexpected increase in the city population: those residents previously registered in the suburbs changed their registration for the city registration. Since in Estonia one share of paid taxes is forwarded to the republican budget and another to the local self-government, Tallinn has benefited from free public transport, allowing residents to save on travel and increasing its own budget.
As some of the cities in Estonia, following the capital’s example, have also introduced free public transport, the new ministerial initiative was the next and absolutely logical step towards the complete abolition of travel fares throughout Estonia. This initiative was widely discussed in the community, and in May an international conference “Free Public Transport for All. Dreams and Reality” was held in Tallinn to mark the fifth anniversary of the introduction of free public transport in the city.
The conference was attended by mayors of European cities who expressed their opinion on free public transport, in particular, their positions expressed the Vice-Mayor of Paris, Mayor of Dunkirk, Mayor of the German cities of Templin and Tübingen, Mayor of the Swedish city of Avesta, representatives of the Lithuanian, Italian, Polish and even Brazilian cities. Most speakers have supported the idea of free public transport.
Yet the difficult demographic situation in the countryside remains the main motivator for the adoption of such a decision. Population is decreasing, the average age of the inhabitants living in the counties continues to grow, and there is also an acute problem of a lack of high-quality workforce. Free public transport should raise the attractiveness of the counties, create conditions for the mobility of the workforce, and become a significant saving for the workers.
This decision is quite important in terms of regional policy. Officials believe that it can motivate people to move to rural areas, and locals will be able to stay in their native regions. All these are elements of high-quality life: there must be a good school, good work, as well as accessible and good transport to connect the school, work and home.
The debate on the introduction of free public transport has demonstrated that those opposing this innovation do not use public transport and do not see practical benefits for themselves.
At the same time, not all bus carriers were receptive to this decision of the Ministry.
The Samat bus company filed a complaint with the Tallinn Administrative Court, because it believes that free public transport significantly affects its passengers and is the cause of unfair competition in the bus transport sector.
Since the regulation does not apply to commercial lines, as of today they are compelled to compete with free fare lines. The company also believes that the Ministry violates the European Union’s state aid rules, including the special requirements of the transport regulation for provision of the state aid to the transport sector.
July 2018 was very hot in Estonia, and many residents preferred to spend their free time outside the city and on the beaches. Free public transport was very much to the point this summer, but even the most optimistic experts could not predict such a passenger flow.
On many lines people had no other choice but to wait for the bus for hours, because there is not enough space in the buses for all. However, even such problems did not reduce the attractiveness of the idea of free transport.
The ability to live in rural areas, enjoying the amazing nature, while still having the opportunity to get to work using free public transport, is quite a worthwhile goal to endure temporary inconveniences.