Guangzhou, the southern Chinese megacity that is to host the 2010 Asian Games this month, has abandoned a plan to offer free public transit while the Games are on.

The plan was to ban half of all of the city’s private cars from the road each day (using an “even-odd rule,” a scheme by which certain license plates can be used only on certain days), and also to ban traffic unrelated to the Games from certain roads. In return, public transit would be free during the Games.

The problem? The same one that you have when you give away valuable road space for free. Congestion — or as we call it in transit, overcrowding. If you don’t pay in money, you pay in time. From Life of Guangzhou:

However, the even-odd rule, together with free rides on buses, subways and ferries, has caused a huge surge in public transportation, especially in subways, in this city of 14 million people. Temporary traffic controls were introduced in at least eight subway stations during peak time on Monday due to the huge passenger flow, sources with the local metro company said. “This is the most people that I’ve seen in the subway. It took me 20 more minutes than usual to get to the office,” said Huang Chunhong, a local white-collar worker. “It’s like a nightmare to get into a train. Many people are forced to use public transit due to the even-odd license plate rule. How can I go through the next two months?” Huang said.

So they’re backing off. From Xinhua:

Now, officials with Guangzhou’s transportation authorities said they had to rescind the offer as more than 8 million passengers took the subway on an average day beginning November 1, a figure “much, much higher” than the subway system was designed to carry.

Average daily ridership when fares were charged was 3.8 million, so the free fare caused a doubling of demand.

Guangzhou authorities plan to roll back the free-day scheme on Nov. 8 and replace it with a cash subsidy program in which each household in Guangzhou will receive 150 yuan as a transportation subsidy from the government.

Fares are the source of so much controversy and hassle that it’s always tempting to try to make them free. A quick scan of “success stories” in this regard shows the pattern: You can do it in rural areas and small cities where demand is low. You can do it in university-dominated towns, where students are most of the market and are riding anyway. And you can do it in a downtown area, specifically to make short trips within downtown easy.

In each of those cases, you’re giving away something for which you anticpate low demand and for which you have adequate supply.

But citywide free transit in a big city, especially during the peak commute, is the opposite. You’re giving away something that is in high demand and for which you have a limited supply.

You could also design and scale a transit service from the beginning with the intent that it be free. New York’s Staten Island Ferry comes to mind, along with many specialized shuttles and most elevators. Many road networks, of course, have been designed and scaled with exactly this intention.

But if you propose to just eliminate the fares on an existing big-city transit system, the answer is always the same: Even while charging a fare, big city transit is crowded during the peak. Inevitably, you don’t have enough buses and trains to handle the flood of ridership that would result from free fares. Now, thanks to Guangzhou, we can see the same point proven in practice.

Could a big city transition gradually to totally free fares? Sure, but only in the sense that an American city could build 100 mi of subways in the next decade: i.e. if money were no object. If you assume that eliminating fares would double ridership — including on the peak — then you’d have to double your fleet, double your workforce, and duplicate any track or roadway that’s already congested with full trains or buses. In most big cities, that would mean duplicating downtown subway lines and stations, which is at least as expensive as building new ones, if the space to do it exists at any price. Would you save a small bundle on fare equipment and staffing? Sure. Would that be enough to pay for all that new capacity? Not even close.