the promise of telecommuting ted balaker reason foundation
TRANSCRIPT
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The Promise of Telecommuting
Ted Balaker
Reason Foundation
www.rppi.org
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• Policymakers have been frustrated with the American people for decades.
• They’ve tried just about everything to pry us out of our SUVs and sedans.
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Ride the bus
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Ride rail
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Walk and Bike
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But nothing seems to work
How America Gets to Work (2000)
Total Auto Other
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Meanwhile, transit spends more, does less.
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Transit’s Change in Subsidies and Work-Trip Market Share
(1980-2000)
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
140%
160%
Annual Subsidy (133%increase)
Work-trip Market Share(26% decrease)
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How about carpooling?
• If you won’t get out of your car, at least put more people in it.
• 2400 miles of carpool lanes.
• PSAs make carpooling look like lots of fun.
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But carpooling is like transit …
More carpool lanes,
but less carpool commuting.
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More carpool lanes, less carpool commuting
(1980-2000)
-200%
0%
200%
400%
600%
800%
1000%
HOV route miles(868% increase)
HOV work trip marketshare (38%decrease)
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• Only commute modes to increase share since 1980 …
• Driving alone• Telecommuting (Work at Home)
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Change in Commute Share(1980-2000)
-60%
-40%
-20%
0%
20%
40%
60%
Perc
ent C
hang
e
Work at Home
SOV
HOV
Transit
Walk
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Definitional Squabbles
• Some say you can’t call “Work at Home” workers telecommuters.– Some “Work at Homers” are home-based and some
say home-based workers aren’t really telecommuters.– But if they couldn’t work at home would they just stop
working?– Central question: Does the work arrangement help
decrease peak hour congestion?
• Home based workers might be the ultimate tcers.
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Why telecommuting’s performance
is impressive …
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Growth
• TC is only commute mode besides driving alone to increase since 1980.
• Greatest percent increase.
• Widespread growth.• Big increase in every metro area.
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Wait a minute!
TC’s market share was small to begin with,
so it had lots of room for growth.
Yes, but …
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• You could say the same about transit and carpooling.
• Both lost market share.
• They also had public policy on their side.
• Policy often hampers TC, but it has grown anyhow.
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Why telecommuting’s performance
is impressive …
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Impact
• TC is gaining ground on transit, poised to surpass it.
• Remove transit anomaly NY and telecommuters already outnumber transit commuters.
• TCers outnumber transit commuters in MOST metro areas.
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Impact
• Areas where TCers outnumber transit commuters by at least 2 to 1:
Charlotte, Raleigh, Indianapolis, Tampa,Kansas City, Greensboro, West Palm Beach,
Nashville, Grand Rapids
• In Oklahoma City, TCers outnumber transit commuters by nearly 5 to 1.
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What about rail transit?
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Telecommuting vs. Rail
• In areas with rail, rail commuters outnumber TCers in only 5 cases.
(NY, Chicago, DC, Philly, Boston)
• San Francisco has more telecommuters than rail commuters.
• In Portland, telecommuters outnumber rail commuters by more than 9 to 1.
• In San Diego, it's 22 to 1.
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But wait!
TCers may avoid the work trip,
but maybe they increase congestion by making more non-work trips.
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Nope
• According to a review of TC literature ...
– Most studies find that TC significantly reduces trips and VMT.
– TC reduced trips by 27 to 51%– TC reduced VMT by 53 to 77% (source: Resources for the Future)
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• According to an analysis of D.C. area commuting …
– Traffic delays would drop by 10% for every 3% of commuters who work from home.
(Source: Laurie Schintler, George Mason
University)
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Why telecommuting’s performance
is impressive…
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Cost-effectiveness
Transit vs. Telecommuting
• Impact is similar.
• What about cost?
– There are costs associated with tc (computer, internet access, etc.).
– But these costs almost never fall to the taxpayer.
• On the other hand, transit is heavily subsidized.
• Bottom Line: Telecommuting offers more bang for the buck.
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Cost to Taxpayer: Transit vs. TC(2000)
$0
$5
$10
$15
$20
$25An
nual
Sub
sidy
in B
illio
ns
Transit
Telecommuting
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Findings like these aren’t surprising.
• UC Davis study:
– Compared to transit “telecommuting appears to be far more cost-effective in terms of public sector expenditures.”
• George Mason University study:
– Telecommuting is “one of the easiest things we can do” to reduce traffic delays.
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Let’s look to the future.
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The future will frustrate policymakers even more.
• Wealth is increasing …
– Compared to today, workers in 1920 had to work 3 X as long to buy a car.
– Today there are more cars than licensed drivers.
– Even 80% of poor households own at least one car.
• Increased wealth brings …
– More cars, more travel.– Decentralization of housing and
employment centers.– Bottom line: With countless origin
and destination points, it’s difficult for transit to be relevant.
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Should policy fight social trends?
• Policymakers want to fight decentralization.
• But this trend is stronger than policy.– Happening everywhere.– Even in foreign cities with
higher gas prices, higher densities, and more transit service.
– Still want to fight this trend? You’ll spend lots of money and lose.
Change in Share of NY State Population (1950-2000)
-50%
0%
50%
100%
150%
Long Island
NYC
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Telecommuting can work with social trends.
– Telecommuting can accommodate a decentralizing society.
– Location doesn’t matter much, usually only need a few tools (computer, cell phone, internet).
– And there are other reasons to be optimistic about the future of telecommuting.
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Reason for optimism …
Telecommuting tools continue to improve.
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Telecommuting tools continue to improve.
• Perform better, cost less.
• Since technological progress is gradual we rarely step back to appreciate how revolutionary it has been.
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Computers
• 1970s IBM mainframes: $3.5 M
• Today’s PCs – $500– 1000 times faster
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Cell phones
• The first cell phones were huge.
• Cost thousands of dollars.
• Today they’re tiny and companies give them away.
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High Speed Internet Access
0%
5%
10%
15%
20%
25%
30%
35%
40%
2000 2001 2002 2003 2004 2005
% o
f U.S
. Hou
seho
lds
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Reason for Optimism:
Telecommuting-friendly jobs are growing.
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Telecommuting-friendly jobs are growing.
• Shifting to a knowledge-based economy.
• BLS expects tech sector to yield 7 of top 10 fastest growing professions.
Employment Gains (1992-2002)
Occupation Job Gains Change
Architects 60K 44%Financial services sales
248K 78%
Designers 230K 43%Electronic engineers 147K 28%
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Reason for optimism …
Workers like telecommuting.
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Workers like telecommuting.
• 77% of AT&T TCers are happier with career after starting telecommuting.
• TC helps Sun Microsystems attract and retain good workers.
• Some surveys show that workers will choose the ability to telecommute over a higher salary.
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Workers like telecommuting.
• Important for policymakers.
– They can stop trying to force commuters to do what they don’t want to do.
– Particularly significant for rail projects.• Rail is expensive, but transit officials think it’s the
only way to attract “choice” riders.
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Who are these “choice” riders?
• Compared to transit users in general they’re wealthier, better educated car owners.
• Who are telecommuters?– Wealthy, educated car owners.
• Instead of trying to get choice riders out of their cars why not ask them to just stay home?
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Telecommuting is an easier sell.
• It’s faster.– Average roundtrip commute …
• Transit: 96 min.• Telecommuting: 0 min.
• Workers already like it.
• It’s cheap.
• Allow transit to focus on serving the poor.
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Still, rail has one big advantage
over telecommuting.
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Better photo ops.