The latest research “Free travel, discounts and monetization of benefits in public transport”

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The NGO Vision Zero has published an analytical review “Free travel, discounts and monetization of public transport benefits in Ukraine and the EU”, prepared by Viktor Zagreba, Demian Danyliuk and Anton Hagen. The review focuses mainly on privileges in Ukraine and the European Union. The source of data on the EU is a study by the reputable international organization Greenpeace entitled “Climate and public transport tickets in Europe”, and the author's analysis of the legislation of five countries in Central and Eastern Europe.

According to the review, there are 19 categories of citizens in Ukraine who have been granted the right to travel free of charge on public transport by the state in its numerous laws and regulations. Local governments are authorized to establish additional categories, and therefore in cities the number of “free” categories usually exceeds 20. According to the Constitution of Ukraine, the costs incurred by local governments due to these regulations should be compensated by the state. However, in fact, the state stopped fulfilling this provision around 2015, after the amendments to the Budget Code as part of the “decentralization reform”. Thus, the state has long been violating the provisions of the Constitution of Ukraine in terms of preferential transportation.

In the European Union, the situation is quite different from Ukraine:

1. The number of social categories of citizens with transportation privileges established at the state level is very small. In Poland, there are only four groups, in Lithuania - two, and in Hungary - seven. In the Czech Republic and Latvia, the list of beneficiaries is determined only at the level of municipalities, and the state does not interfere. All other groups, requirements for them, and the amount of the discount are set at the local level.
2. Similarly, an extremely small number of categories in Europe are entitled to completely free travel, while all others are entitled to a discounted ticket. Those who are eligible for free travel are usually children under 6, often people over 60 or 65, and rarely people with certain types of disabilities. Almost all social categories that do not pay anything in Ukraine have to pay fares in the EU capitals studied, although they often have special (preferential) offers and special social cards. The exception is Tallinn, where public transportation is free for all local residents.

Monetization. The authors of the study highlighted the concept of “monetization of benefits,” i.e., the potential replacement of benefits with targeted payments. The authors reviewed the political initiatives to introduce “monetization” from Yanukovych to Zelenskyy and drew parallels with the Russian Federation, from where the idea of monetization came to Ukrainian politicians. According to the authors, there is no monetization in the European Union. It exists only in Russia, and there this reform has failed and is being rolled back. But without going into the problems and experience of Russia, the authors logically explain why “monetization”, if implemented ill-considered, will only harm the transport sector, communities, and ultimately the citizens it is supposed to help. In addition, the idea of monetizing benefits contradicts EU Regulation 1370/2007 on socially important transport, which Ukraine is obliged to implement.

Conclusions. The authors do not make recommendations, but draw conclusions from their review.

1. The state fails to comply with the provisions of Article 142 of the Constitution of Ukraine, according to which “the expenses of local self-government bodies incurred as a result of decisions of state authorities shall be compensated by the state”. The state has established 19 categories, and local governments incur direct costs, but the state does not compensate these costs.
2. In the EU, social groups in transport are defined primarily by economic criteria (ability to pay), while in Ukraine they are defined by political, ideological, and traditional criteria (“they have always been privileged”). Ukrainian legislation seems to imply that all members of “privileged categories” are necessarily poor and unable to pay for bus or subway travel, which is not always the case.
3. State policy on privileges in Ukraine is centralized and post-Soviet, unlike in the EU. In Europe, only a few privileged categories can be established at the state level (by law), while almost all social groups and the amount of discounts for them are determined at the local level (decentralization).
4. Ukraine provides public transportation privileges almost exclusively as free travel, which is another sharp difference from the EU. Social fare policy in public transport in Europe is much more flexible and variable, and mostly operates with discounts that are coordinated with other systems to make prices more affordable for low-income people and with public transport subscription systems.
5. Monetization of privileges is an “anti-European” approach. This approach was introduced only in Russia, from where this idea was introduced into Ukrainian politics during the leadership of Yanukovych and Azarov. Attempts to introduce this approach into Ukrainian legislation were made under the Groysman government, and even during the war in 2023-24. These initiatives, however, are not supported by analysis and calculations, i.e., they are not justified.
6. Public transport financing policies in the EU are created in pursuance of EU Regulation 1370/2007, which establishes the concept and mechanisms for public service obligations (PSOs). This was the path followed by all states when they joined the EU and it also looks like the only rational way of reform for Ukraine. However, the EU Regulation does not include provisions on the policy of privileges and discounts, and therefore, this reform should be implemented by Ukraine separately from the implementation of the Regulation.

We invite you to read the full text of the study on the website of the NGO “Vision Zero” by this link: https://bit.ly/41e5VqV