A Comeback for the Carpool

Ride-sharing has declined in recent decades, but there's a lot that could be done to revive it. The potential savings are enormous.

For decades after World War II, the carpool to work was a daily ritual for millions of Americans, mostly suburban (and, in those days, mostly male). Through the 1960s and into the mid-1970s, one in five workers carpooled to their jobs.

How times have changed.

Most suburban and even many urban households now have at least two cars. Today, fewer than one in 10 commuters nationwide shares a ride. The overwhelming majority of Americans -- 77 percent -- drive to work alone.

But the news on the ride-sharing front isn't all discouraging. Despite the 30-year decline in carpooling rates, several factors -- new technologies enabling real-time ride-matching, changing attitudes toward car ownership, the growth of the sharing economy, and an increasing number of managed lanes that provide incentives for carpooling -- offer significant opportunities to revive ride-sharing.

The beauty of ride-sharing lies in the fact that it taps into an abundant yet underutilized resource: the empty seats in cars. These empty seats represent a huge amount of waste in our transportation system but potentially a huge opportunity for improvement.

What is the potential impact from reducing this waste? Deloitte used geospatial analysis of demographic data to calculate the number of likely ride-match pairs within each census tract who live within one mile of one another, leave for work at the same time in the morning and travel to the same workplace tract. Based on our analysis, we estimate that almost 19 million commuters in metro areas across America could switch from driving to ride-sharing if current barriers were eliminated.

This switch -- admittedly representing a best-case scenario that would take years to be fully realized -- could have enormous societal benefits: We project the maximum potential savings from increased ride-sharing at over $30 billion annually. These savings would accrue from several sources: $15.8 billion in direct annual savings to new carpoolers due to reduced vehicle upkeep, $11.6 billion in indirect savings from lowered congestion costs, and $1.8 billion in reduced annual road-infrastructure costs. Furthermore, traffic-related accidents could fall by 22,915 annually, yielding $847 million in annual savings, while carbon dioxide emissions would fall by 9.1 million metric tons a year, producing societal savings of $338 million.

So how could ride-sharing's potential be maximized? The following strategies could help to spur carpooling's resurgence:

Expand tax incentives to ride-sharing: Extending the employee pre-tax benefits commonly available for parking, transit passes and vanpool costs to ride-sharing could increase its appeal to commuters.

Enhance ride-matching platforms' customer experience: Cities should determine how best to marshal private-sector innovation to bring first-class user interfaces, highly reliable service, incentives for participation and widespread public awareness to ride-matching.

Use infrastructure investments to support ride-sharing: Most commuters who carpool are motivated principally by the time or money they can save by doing so. Ride-sharing initiatives should be included in high-occupancy vehicle (HOV) and high-occupancy toll (HOT) lane projects, along with designated commuter lots to facilitate the convenient pickup and drop-off of passengers via dedicated entrance and exit ramps.

Focus on building a critical ride-sharing mass in key corridors: This approach, rather than trying to expand ride-sharing across a wide region, would have a quicker impact. A base level of "guaranteed" service (meaning that a commuter will always be guaranteed a carpool on a corridor) is likely needed to generate repeat users until a critical mass is achieved. Many cities already have guaranteed ride-home programs, which typically offer vouchers to members to pay for a taxi if they miss their vanpool. Such programs should be tied to real-time ride-sharing initiatives to help provide a guaranteed service level until the corridor network is dense enough to achieve stable critical mass.

Recruit participants through trusted channels: Recruiting efforts tend to be most effective when they involve trusted channels, such as employers. New-employee orientations, for instance, represent an effective channel for enhancing the awareness of ride-sharing as a commuting option.

Target younger commuters: Recent years have seen significant shifts in attitudes toward vehicle sharing, especially among millennials: Forty-two percent of American Generation Y consumers say they are willing to carpool if it is readily available and convenient.

Establish public-private partnerships to improve mobility: Forward-thinking jurisdictions could adopt pay-for-success models that specify particular mobility outcomes rather than the means by which those outcomes are to be achieved. Doing so could open up new kinds of partnerships with automakers, ride-sharing companies and others exploring new mobility services and help stimulate innovative methods for reducing gridlock in some of the most congested corridors.

These strategies are relatively cheap compared to major infrastructure changes and are likely to offer a significant return on investment for state and local transportation systems. There's a lot of value in all those empty car seats.

Tiffany Dovey Fishman is a senior manager with Deloitte Services LP, where she is responsible for research and thought leadership for Deloitte’s public sector industry practice.
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