2012

Regional Community Transportation
Think Globally – Act Locally
One Economic Tool Can:     Put Over $200 Billion Back Into Local Economies Create Over 8 Million Job Equivalents Reduce Our Dependency on Foreign Oil Be Implemented Now

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Boyd Thompson Ride Solution, Inc. 9/13/2012

Regional Community Transportation White Paper Were we to wish for just one economic tool with which to assist our recovery from the recession, regional community transportation, sufficient to get people to work, should be considered as our first priority. Americans spend $490 billion dollars annually for gasoline, two thirds of which is burned in the daily commute. If we were able to save half of those dollars and put them in the pockets of workers, the result would be a $245 billion dollar per year, reoccurring stimulus package that impacts at the level of the local economy. An increase of $245 billion in national consumer discretionary spending is the economic equivalent of 8.1 million jobs that pay $40,000 per year with a $30,000 per year take home. The increased economic impact of the discretionary dollar over the fuel dollar is due to the fact that the local markup on gasoline is only about 4%, thus only 4% of a fuel purchase enters the local economy. A discretionary purchase, however, enters the local economy at 100%, thereby rendering approximately 25 times the local impact as a fuel purchase. We support the local economy substantially more when we don’t purchase fuel than when we do. Eight million job equivalents are about 30% of the twenty seven million jobs that the Brookings Institute projected, in 2010, were needed to bring employment back to pre-2008 levels. Brookings figures indicated that at a job creation rate of 208,000 jobs per month, the highest level achieved at the peak of last decade's boom, it would take 11.5 years for America to again reach pre-2008 employment. Gasoline costs are, however, only about 60% of commuter vehicle expendables, the other 40% being contributed by oil, tires, and maintenance. While shifting this additional 40% of vehicle expenditures from essential to discretionary expenditure will not have the scale of local impact felt by the shift of fuel purchases, due to the higher local mark-ups of tires and oil and the primarily local nature of maintenance services, the positive economic benefit and relative abundance of a shift from essential to discretionary purchases should not be discounted. Recovery time for the economy could be shortened well above 30% by the conversion of half of our gasoline purchases into local discretionary spending. Immediately cutting gasoline consumption by 50% would seem an impossibility but, if two thirds, 66%, of our gasoline is being used in our largely SOV commute to work and a four passenger car pool represents a 75% fuel savings over SOVs, then three quarters of two thirds equals a 49.5% national fuel savings resulting from a shift from SOVs to carpooling. Conversion of the daily commute to four passenger carpools, then, would produce the economic equivalent of at least eight million new jobs. Putting this in place over a 24 month period would be the equivalent of creating 333,333 jobs per month, well above the levels achieved in the boom. This economic benefit would also then be sustainable in succeeding years. Ride Solution has, since 2009, been developing a regional carpool management strategy termed “saturation transit”, which manages carpooling as routed-scheduled service in much the same way as human service transport has become routed-scheduled service within the Putnam County flex-route system. The simple analytical structure of saturation transit allows for the management of carpooling as the foundation, the elemental building blocks, of regional transit. Since Ride Solution is a member of the

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North East Florida Mobility Coalition, which is comprised of Duval and six surrounding counties, our research supporting the saturation transit regional commuter concept has been centered on Duval County. Duval County has, per the analysis prepared by the North East Florida Regional Planning Council in 2009, one hundred and twelve square miles that are zoned for employment; these being industrial, commercial, or office. If we divide the 112 square miles of employment into two square mile destination zones, then we have a total of 56 destination employment zones within Duval. There are six major road corridors that feed Duval in a hub and spoke manner. If we send 56 vehicles from the rural perimeter up one of those corridors into Duval, then we have enough vehicles to cover all of Duval’s sprawling and diffuse employment destinations in an efficient manner in terms of passenger dispersion. If we deploy 56 vehicles per each of the 6 corridors on an 8 AM and 5 PM pulse schedule, then we have one saturation schedule. Saturation schedules would additionally pulse either partially or completely depending upon demand in alternative workday schedules such as 9-5, or 7-3-11. The conversion of employment areas into two square mile zones also allows for the gradated management of capacity from carpools to vanpools to bus service based on the number of registered carpool riders using a corridor to access a given destination zone. Unmet demand for transit services skyrocketed in 2008 when fuel prices spiked. Duval private commuter trips over 25 minutes long exceed current JTA ridership by a factor of 6. Carpooling is the most immediately deployable and most economically self-sustaining response to the inevitable, and possibly traumatic, increases in the price of fuel. In 2009, the Department of Energy released World’s Liquid Fuel Supply projections that show world oil demand beginning to outstrip production’s ability to supply beginning in 2012. The drop in fuel prices from a high in 2008 of over $4.25 per gallon to under $2.00 per gallon in 2009 was the result of only a 3% reduction in world demand, from 86 million barrels per day to 84. Per the 2009 DOE projections, demand outstrips supply by 3% in mid-2013. The volatility of the fuel market is being exponentially driven by the looming and probably permanent departure of demand from supply. Certainly, there are national security as well as economic reasons to build regional community transportation on as advanced a schedule as possible. OPIS, the retail fuel database, is warning of a potential diesel price “spike to numbers not seen since 2008” in the second half of 2012. Since the bottom 40% of Americans have only .3% of the wealth and the middle 40% has only 15% of the wealth, it is very probable that savings on gasoline purchases will immediately enter the local economy. An effective method of attracting SOV commuters to carpooling, while also building the infrastructure necessary to manage carpooling on such a massive scale, can be found in the fuel tax rebates for which public transportation is eligible. These rebates average, nationally, $.489/gallon. If the community transportation operator issues fuel cards to SOV operators who are enrolling to become carpools, then the fuel purchased by the prospective carpool operator returns an average of $.489/gallon to community transit which, in turn, provides the carpool startup with a substantive incentive in the form

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of a price break off the pump. The first carpool rider will then halve the cost of operating the formerly SOV vehicle, at which point the fuel rebate is retained in its entirety by community transit. At first blush, this funding mechanism would appear to result in a massive loss of tax revenue but the fact that the consumer’s fuel purchase savings enter the local economy and cyclically generates sales tax actually results in more tax revenue than had the fuel purchase been made. Approximately 60% of the local economy is local, consisting of people taking in each other’s wash. After 100% of the fuel savings dollar goes through the local sales tax the first time, 60% of the initial savings goes through again, and 60% of that second cycle goes through again, etc., etc. The admittedly crude spreadsheet model at the end of the attached source material indicates that approximately 30% more state revenue is generated by running the fuel dollar through the sales tax system rather than through the fuel tax system, this while holding the federal fuel tax revenue harmless. These additional state tax dollars are what is used to implement regional community transportation while the discretionary consumer dollars put into Florida’s local economies would produce over 500,000 job equivalents. The saturation transit regional commuter strategy is implementable now, without additional legislation. It requires only that tax revenues and metropolitan economic generators be looked at in a coordinated, holistic manner that is in accord with economic reality and that IRS and Florida DOR fuel tax policy remain static. The ability of regional community transportation to jump start our national economy and further attract new jobs on an international scale cannot be understated. If one could have just one economic tool to address America’s future, it should be regional community transportation.

Contact Information: Boyd Thompson, Director of Operations Ride Solution, Inc. Cell: 386-937-4902

View Ride Solution on the Web The Ride Solution - Palatka, FL www.theridesolution.com

Email: mailto:ridesol@bellsouth.net For an audio presentation with additional details and references, please follow this link: Why America Needs Regional Public Transportation Now by boyd thompson on Prezi (Allow additional time to download entire presentation) Web Address: http://prezi.com/6brx6mxdg8lg/why-america-needs-regional-public-transportation-now/

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Saturation Transit – Jacksonville, Florida

 Duval County has 774 square miles of which 112 are zoned employment.  There are six major arteries feeding Duval  One vehicle per two square miles of employment per artery = 336 vehicles = 1 saturation schedule.  Duval County has 651 taxis and 146 paratransit vehicles.  Redeployment of 42% of the Duval taxi/para fleet to bases in surrounding rural counties would implement one saturation schedule.