redgreenandblue.org At the time, most of Chapel Hill Transit’s revenue was coming from the University of North Carolina’s paying for transit for its employees and students. The university agreed to pay a little more and Chapel Hill and Carrboro kicked in the rest to cover the 20 percent of the transit costs not paid by tickets.
“We look at it as a pre-paid fare program,” Brian Litchfield, interim director of Chapel Hill Transit, which serves both cities, told Eric Jaffe of CityLab in 2013. “The university is pre-paying for all their employees and students to ride. The town of Chapel Hill and Carrboro are pre-paying their fares via property tax and vehicle registration fee. So while there’s not a fare to get on the bus, it’s definitely not a free system.”
The program has been phenomenally successful. Ridership increased from around 3 million passengers a year in 2002, to about 7 million in 2013.