This article has a very interesting take, which summed up seems to be:
If you have the money for free buses, you have the money for improved service (instead of free buses).
This is the key issue here, and has been my opinion on the matter for a while.
There are a few circumstances where free transit really makes sense: when the cost to collect the fares exceeds the amount received from it (may be true for very small systems with low ridership, but likely not for systems that are any larger), and when the hassle/burden of fare payment discourages use (the latter used to be a bigger factor when you had to have $1 bills and exact-change coins on hand; but less of an issue with tap-to-pay systems, mobile fare systems, systems that take credit cards, etc).
Otherwise, virtually any dollar that goes towards covering the lost revenue from free fares would be better off invested in better service. There are very few places in North America where transit is legitimately dense enough in both service level and coverage that adding service would not benefit the public.
If the idea is to help those who struggle financially, better access to jobs with transit that doesn’t require waiting an hour between buses and/or walking an extra mile or two each way will help far more than saving $2. Even at minimum wage, the value of time lost from bad transit service exceeds the fare. There are also other benefits to better transit service even if you don’t spend the extra time at work. More time at home (leave later, get home earlier) means, typically, a happier, more fulfilling, and healthier life, which reduces medical costs and other societal effects. Being able to spend more time at home with kids reduces the chance of delinquency, etc. All of that is worth more than saving $2.
Frankly, I do think that local public transit ought to be free, just like K-12 education is. If we could encourage less auto use for local transportation, that would be a boon for the environment and a public community good.
There’s a bit of a logical flaw in this argument, that most public transit supporters tend to overlook. First, for most folks, the cost of driving exceeds the cost of using public transit. So, while making transit free might seem beneficial to them, their decision to drive vs. riding transit was likely based on something other than the bus fare. Therefore, getting rid of the bus fare does not address the underlying issues that push people to driving.
Second, without changing anything else, any road capacity that does get freed up by drivers shifting to transit will just be filled with other drivers anyway. It’s the same induced demand concept that says that adding a lane of road capacity will increase traffic to the same congestion that the lane was supposed to alleviate.
So, in summary, if the goal is to help those in poverty, better service will help them more than lowering the fare from $2 to $0 (for extreme cases, specialized programs to pay for their passes can be administered). If the goal is to get people out of their cars, address the reasons they are driving instead of using transit (a bus every 30-60 minutes that takes an hour travel 6 miles isn’t going to get people out of their cars, regardless of if it’s free). If the goal is to improve the environment and reduce traffic, completely different strategies (including road diets) are needed, which are a different policy altogether than making fares free.