Free tram travel in Melbourne's city centre could encourage so many people to jump on board it will lead to serious overcrowding issues, a transport users group and the Greens have warned.

From New Year's Day, travel on trams in the CBD and Docklands has been free.

Illustration: Matt Golding.

The move was promised by the Napthine government in last year's budget, and supported by Labor.

Combined with a major zones reform to let commuters travel more cheaply, it will cost taxpayers about $400 million over four years.