Tallinn, Estonia’s Capital Provides Free Rides to City Residents

If you are a Skype user, you should at least know that Estonia is where the Internet telephony service was born. Estonia, a highly developed and the most wired country in the world is described by World Bank as [sic] high-income economy. It is located in Northern Europe, with Tallinn as its capital. Its estimated city population is 425,000.

The country’s capital recently made the news when it was announced that Tallinn is giving its residents a world’s first – free rides on public transport. All that is needed is a transit pass. It’s a registration/ID card that signifies that the holder is a city resident. Cost of the transit pass is two euros. The city pass is valid on trolleybuses, regular buses and streetcars. An electronic reader is installed on each public vehicle, which will scan the pass. Failure to do this merits a fine of 40 euros, which is equivalent to $52. Unlike other bus passes, like those available in London and other European cities, the transport pass in Estonian does not need to be topped up.

Why free public transport rides

The free ride initiative in Tallinn was launched in January this year. And it’s being considered a success although naysayers are still adopting a wait-and-see attitude, calling it a political gimmick ahead of elections and an expensive project.

The idea for the project came from Tallinn City Mayor Edgar Savisaar. It is an effort to reduce the expenses of the low-income city residents and reduce pollution and traffic congestion. He even called the savings that families would realize from the initiative as a salary for the 13th month.

Savings

The free-ride scheme is estimated to cost the city about 12 million euros, which is equivalent to $16 million a year on tickets sales losses. However, it is being compensated by the increase in passengers, which went up by 10%. Likewise, the number of private cars on the streets is down by more than 15%.

Positive response

The residents’ response to the initiative was overwhelming, with nine out of every ten residents surveyed showing satisfaction with the free-ride scheme. They are also going out frequently during weekends, which translate to them spending while out of the house, thus giving the city’s economy a big boost. City officials though are also quick to say that the actual economic stimulation is yet to be determined.

In reverse it is said that the city revenue had a positive increase as the city also gained an increase in taxpayers. While about 40,000 people that are working and living in the city are registered somewhere else, there are 5,000 new registrants since the start of the year. This is an increase of 1,400 from 2012.

Estimated revenue

It is estimated that for every 1,000 new residents the city tax to be collected will amount to one million euros, which could offset the cost of the program for the year 2013, according to Taavi Aas, Deputy Mayor of Tallinn.

However, it does have a negative effect on private companies, such as taxi operators whose revenues have already declined by 25% since January.

Critics are worried that the project will bankrupt the city. They prefer that the ruling city government think of other schemes that are more meaningful and profitable rather than using taxpayers’ money for something which they believe is only election propaganda.