REPORTER: Transport costs are a big problem in most European cities - not so in Tallinn, the capital of Estonia. Local authorities have just introduced free public transport for all city residents. Taavi Aas is Tallinn's Deputy Mayor.
DEPUTY MAYOR OF TALLINN, TAAVI AAS: "Every major city is struggling with more and more cars and there are different solutions. Some charge for driving in the city centre, and there are those who are building new roads. We found that the most sensible approach would be to solve the issue through free public transport."
REPORTER: It's not cheap of course. At the moment the council subsidises approximately 70 percent of all transport costs. The new free ticket system will add an extra 12 million euros to the annual bill. But the city will get some of that money back. The government provides one million euros for every 1,000 inhabitants - since the free transport plan was announced several thousand new residents have registered.
DEPUTY MAYOR OF TALLINN, TAAVI AAS, SAYING: "We have significantly increased the number of people already. If we get a 10 per cent increase in inhabitants that will increase our tax base."
REPORTER: Until now the biggest city to offer free public transport was Aubagne in southern France , which has 400,000 inhabitants. Tallinn is the first capital city to try it and it's certainly serious about making a go of the scheme. It's bought 70 new buses and 15 new trams and motoring deterrents have been increased. Some roads have been closed to private transport and car parking charges raised. Most residents are delighted - 75 percent support the scheme.
RESIDENT OF TALLINN, LILIANA KOHNOVITCH: "It's good for workers and students, it's great. I think the most important thing now is to maintain the quality of the public transport."
RESIDENT OF TALLINN, VICTOR BOLSHAKOV, SAYING: "Free public transport is good. People will have more possibilities to travel around and if it improves city traffic than I am all for it."
REPORTER: Tourists and visitors must still pay - they'll be charged 1.6 euros a trip. And some are wondering how long the government will be willing to bankroll the scheme. But it's certainly proving popular so far - on the first day the number of people using public transport rose from 1,000 to 8,000.