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Off peak travel is generally also much less expensive, since you already have the buses and drivers doing peak-only shifts generally spend the middle of the day just sitting around. KC could run a lot more all-day service and garner a lot more ridership.
The status quo doesn't really have anything to do with it though. If it's optimal for them to spend $X on transit while also eliminating fares, then that's what's optimal whether they're currently spending $X or $0.2X.
> Off peak travel is generally also much less expensive, since you already have the buses and drivers doing peak-only shifts generally spend the middle of the day just sitting around. KC could run a lot more all-day service and garner a lot more ridership.
Which would tend to make it so that you would build more transit before you hit the point of diminishing returns, but that doesn't mean the point of diminishing returns doesn't exist, or that we shouldn't also eliminate fares. They're just two independent questions.
It's like asking whether we should increase the size of the child tax credit or subsidize solar panels. Maybe we should do both. Maybe we should do neither. But the answer to each question has more to do with whether its benefits exceed its costs than how you answer the other question.
But then there is a reason for that -- spending has diminishing returns. If you have some money and you could use it to serve an area with 1500 riders then that may be worth it, but once you've served it, the next best unserved area which costs just as much to serve would only have 750 riders, which may not be worth it. The point where you stop is where the value of the service no longer exceeds the cost.
And the value of eliminating fares has a major comparative advantage because it allows you to eliminate the cost of collecting fares, which is typically a huge fraction of the money collected in fares. Especially when the fares are already subsidized (which they are most everywhere), because then you still have the pay the full cost of the collection infrastructure but generate much less revenue. In some places the cost of collection can exceed the total revenue from the fares. And even if you beat break-even, the little amount left over is hardly worth losing the benefits of having fewer cars on the road.