I met them in Edinburgh a few years ago. I didn’t know what they were until I discovered them by chance in the streets of the Scottish capital. I have also taken this tour in other cities organized by independent professionals.
So, how does it work? They offer you a free tour, so that you pay what you consider (generally between 5€ and 10€). Then, they offer you other tours and the avarage price of these tours are between 12 and 18€, and sometimes up to 30€. These prices are usually cheaper than the average of tours offered by other agencies. For exemple, the Third Reich tour in Berlin, Mount of Olives tour in Jerusalem, “Pubcrowls”; in Madrid (which consists of going to different bars during the night). 

Therefore, the free tour is a general overview of the city visited. They are in almost every major city in Europe, America and Israel. I love it, mainly because I like someone to tell me stories and legends of the city. They are always given in local language and English, and depending on which city you do it, tours in other languages are also offered.
So now you know, free tours are an excellent option to get to know a city and a good opportunity to meet people in case you travel alone. I recommend Sandesman NEW Europe Tour.

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