The Failure of Fare Caps: Ten Blind Spots in Transport Policy
Key Takeaways
- The UK’s bus fare cap highlights a number of blind spots that commonly occur when developing and evaluating transport policy.
- Evaluating Policy Alternatives — Judging a policy against doing nothing, rather than against better alternatives.
- Ignoring BCRs — A BCR near or below one is a red flag, not something to ignore.
- Balancing the Evidence — Highlighting some of the benefits whilst ignoring a large part of the evidence is not a balanced case.
- Poor Problem Setting — Badly framing the problem obscures the real issues and better solutions.
- Learning the Wrong Lessons from Elsewhere — Transport policies should not be blindly copied. You need to understand what is really happening, not the spin.
- Public Transport Should Not Make a Profit — Believing that transport needs subsidy is not the same as excusing it from spending money badly.
- Vibes v Substance — Too much policy today is about creating vibes rather than substance.
- Failure to Understand the Detail — Policy support shouldn’t be built on a misunderstanding.
- A First Step or a Dead End — Hoping today's low-value policy leads to tomorrow's better policy is wishful thinking.
- Poor Understanding of Transport Equity and Welfare — Transport professionals would be better off integrating equity experts into policymaking.
What Next
Do you have a robust process for assessing transport policies?
Introduction
The UK's new Prime Minister has reversed the government's increase to the bus fare cap, restoring it from £3 back to £2 at a cost of around £500m for a single year. Regular readers will know I'm not a fan of free or cheap fares. I've written before about why cheap fares for everyone are an expensive and poorly targeted way to tackle transport poverty, why they come at the expense of the service improvements people actually need, and why they tend to shift people away from walking and cycling rather than out of cars.
But this post isn't really about the fare cap. The evidence against these policies is well established, and I don't need to repeat it here.
What actually caught my attention was the reaction. The reversal was met with divided opinions amongst transport professionals. That reaction is what prompted this post.
I don't think this is really about fare caps at all. It's about a set of blind spots that keep showing up across transport policy, and that will keep producing bad decisions long after this particular fare cap is forgotten. I've pulled out ten of them below, in the hope that naming them makes them easier to spot and avoid next time.
The Blind Spots
Blind spot 1 - Evaluating Policy Alternatives.
One of the biggest weaknesses in transport policy-making is that we're bad at comparing options. A new idea comes along, it looks reasonable on its own terms, and we run with it, without seriously asking whether something else would have done the job better.
The fare cap is a textbook case. The UK government's own evaluation of the original £2 cap found it delivered low value for money, even once you include the wider benefits that don't normally make it into a standard benefit-cost ratio. That result is almost certainly why the cap was raised to £3 in the first place: people inside government would have been pointing to the numbers and asking whether this was really the best use of £500m.
That's the real shame of it. The evidence points clearly to better alternatives, most obviously, investing that money in improving public transport services. But because the fare cap was evaluated in isolation, against doing nothing, rather than against those alternatives, it was allowed to look like a reasonable policy rather than, at best, a mediocre one.
Blind spot 2 - Ignoring BCRs
BCRs in transport are flawed, sometimes deeply so. But flawed doesn't mean worthless, and it certainly doesn't mean we should ignore them when they're inconvenient. The original £2 fare cap came in with a core BCR of less than one, meaning it destroyed value rather than created it. And that was measuring the shift from no cap to a £2 cap.
The current policy is a smaller move, from £3 to £2, and a chunk of the available benefits will already have been captured by the £3 cap. There's a good chance the BCR for this second step is even lower than the first.
Any significant transport investment with a government-produced BCR around one or below deserves heavy scrutiny, not enthusiastic support.
Blind spot 3 - Balancing the evidence
The evidence against low fares is extensive. They're a poor tool for shifting people out of cars, and a poor tool for improving equity or reducing the cost of living for the people who need it most.
What they do reliably deliver is a bump in patronage, partly from people switching away from walking and cycling, and partly from people who genuinely benefit because travel is now cheaper and so they travel more. But the longer-term evidence is clear that improving the services themselves is a far more effective way to grow patronage sustainably.
Proponents of fare caps tend to foreground the patronage bump and the welfare gains for the people who directly benefit, while quietly downplaying everything else. A genuinely balanced reading of the evidence points to a policy of limited effectiveness, which is exactly why the BCR comes out so low. As transport professionals, we need to be aspiring to a balanced reading of the evidence.
Blind spot 4 - Poor problem setting
Good policy starts with a clear-eyed diagnosis of the problem. According to the UK government, the original fare cap was designed to do two things: increase bus patronage, and reduce the cost of living.
Both framings are flawed. Increasing bus patronage isn't an end in itself; transport is an enabler, and buses are a great one when the service is good. But the real problem in much of the UK is a lack of access to good public and active transport, not a shortage of people riding the buses that already exist. Frame the problem as access, and very different solutions become obvious.
The cost-of-living framing fares no better. Transport is often a household's second-biggest expense, but that's rarely down to the price of a bus fare. It's because in large parts of the UK, there's no real alternative to owning a car, a cost that is in the region of £10K a year per household. The real problem is the absence of alternatives to car ownership, not the price of the bus ticket.
Get the problem wrong, and it's no surprise the solution ends up wrong too.
Blind spot 5 - Learning the wrong lessons from elsewhere
Part of the support for fare caps came from the fact that similar policies exist across Europe, in places with far better public transport than the UK. The logic seemed to be: fare caps must be part of what makes those systems work.
The evidence doesn't back this up. Europe's best public transport systems thrive because they have good services, frequent, reliable, well-integrated, extensive coverage, not because of fare caps. The fare cap is a red herring, riding on the coattails of systems that were already succeeding for other reasons.
When we borrow policy ideas from elsewhere, the job is to understand what's actually driving the success, not to copy the vibe and hope it transfers.
Blind spot 6 - Public Transport Should Not Make A Profit
One argument from fare cap supporters was that critics like me are stuck in an outdated mindset of expecting public transport to turn a profit. I've written before about why that's a false choice.
Public transport can't be profitable, largely because of the enormous subsidies baked into car ownership, but that doesn't mean money spent on it should escape scrutiny for value. If we want the public to back further investment in public transport, that money needs to be spent well. It can't be sold on the basis that transport is subsidised by nature, so spending more is always good, regardless of what it delivers.
Too often, I've seen a real lack of focus on cost efficiency in government-run transport services, almost as if the public should accept a premium simply because it's in the public sector.
Blind spot 7 - Vibes v Substance
Supporters of the fare cap argue it raises the profile of buses, a mode that's too often neglected despite being the backbone of public transport almost everywhere, and that this higher profile builds momentum for greater support down the line.
History doesn't support that theory. The fare cap was first introduced in 2023. That didn't stop it being raised to £3 when the government changed. It's hard to believe that reversing that decision will, on its own, spark a bus renaissance that three years of the policy's existence didn’t.
Too much policymaking right now chases short-term wins that feel good and signal virtue to a political base, at the expense of the substantial reforms that would actually move the needle. It is no wonder that so many members of the public are dissatisfied with the traditional political parties as they grow tired of the ‘bread and circuses’ they are being served up.
Blind spot 8 - Failure to understand the detail.
Some of the support for the cap rested on a basic misunderstanding of how bus tickets work. A common assumption was that commuters, a large share of bus users, would save £2 on each return trip to and from work, adding up to roughly £500 a year.
In reality, most commuters already travel on passes that bring their average fare below £2. It's infrequent users, buying single fares, who actually benefit. That's a big part of why the original fare cap only delivered a 5% increase in patronage.
We need to get better at understanding how a policy actually works in practice, rather than taking the press release at face value.
Blind spot 9 - A first step or a dead end?
Some supporters saw the fare cap as a down payment: lower fares now, better services to follow. It's a reasonable hope, but not a realistic one given where the UK's public finances sit.
The UK is already grappling with high debt, a large budget deficit, and weak growth. The new Prime Minister has made a string of expensive new non-transport spending commitments without a credible plan for how they'll be funded. In that environment, it's hard to see public transport being generously funded any time soon. There will likely be some high-profile announcements, but they'll fall well short of the transformation many parts of the UK actually need.
We need to accept that transport sits behind a long list of other priorities, and that public transport subsidies will remain under real pressure. I've written about that here. With limited funding on the table, the priority should be spending what we have far more effectively, not waiting for a magic money tree that isn't coming.
Blind spot 10 - Poor understanding of transport equity and welfare.
As I mentioned before, transport professionals have a poor grasp of transport poverty and what actually drives it. The case for fare caps as an equity tool usually goes like this: bus users tend to have lower incomes, so cheaper fares improve equity.
This doesn't hold up. As already noted, many bus users are commuters who won't benefit from the cap at all. Worse, the policy privileges people who already have access to bus services, relatively fortunate, in transport terms, over those who don't. Two groups lose out entirely: people on low incomes with no adequate bus service nearby, often pushed into the cost of owning a car they can barely afford; and people without adequate bus access who either can't afford a car or can't drive, including many with disabilities.
Both groups are worse off than the people the fare cap actually reaches, and both should be a genuine priority for support. A recent report makes the economic and fiscal case for improving public transport access specifically for disabled people in the UK.
Transport professionals aren't equity experts, and I don't think we ever will be as good at it as the welfare departments whose core job it is. Rather than trying to become equity specialists ourselves, we'd be better served working far more closely with welfare departments, so real expertise on equity can shape our policymaking properly.
Conclusion
None of these blind spots is unique to fare caps. They show up whenever a policy has good vibes but weak evidence: road widening, free parking and public transport, autonomous vehicles, the list goes on. What makes fare caps a useful case study is how many of these blind spots stacked on top of each other at once.
It was the wrong problem to solve, and failed to properly weigh the alternatives. It looked past a low BCR result. It copied a European vibe without understanding the substance behind it. And it let a policy marketed as helping the poorest end up doing more for people who should never have been the priority in the first place.
We need to get better at spotting these patterns before we get swept up in them. Good policy is about doing the unglamorous work of defining the problem properly, weighing the alternatives honestly, and following the evidence even when it points somewhere less exciting than a headline fare cut.
The bus fare cap will get its moment in the sun. But the £500m it costs is money that won't go toward the service improvements the UK desperately needs, or actually reach the people transport poverty hits hardest.