A recent article in the Los Angeles Times highlighted some signs that transit ridership is declining as gas prices fall. Although much of the ridership evidence is anecdotal at this point, given the roughly 50% drop in gas prices over the last few months a return to cars would not be unexpected. However, more data will need to be gathered (and numbers from recent months more fully analyzed) before any firm conclusions can be made about driving trends. Even then the implications may not be clear, because several questions cloud the situation.
The first x-factor is the weak economy. Economic growth or weakness has in the past correlated quite closely with vehicle miles travelled (VMT) - with growth increasing VMT and weakness hurting it -although vigorous debate still exists about which way the causation flows. In fact, recent events may yield some insight for this debate. For example, a year ago the economy was still fairly healthy and gas prices were rising sharply – two forces that should pull VMT in opposite directions. In recent months the economy has been hit hard, yet gas prices have also plummeted, once again creating forces that usually pull VMT in opposite directions. The data is not yet available to clearly assess how this is playing out, but it will be interesting to look at more closely in the near future.
The second x-factor is uncertainty about future gas prices. As we have discussed in past blogs, a decision between driving and transit can be made day-to-day, thus gas prices have an instant short-term impact on transit usage. But expectations of higher prices in the future may be continuing to shape longer term consumer decisions about vehicle purchases and the location of housing. If that is the case, a full rebound to previous VMT levels (per capita) may not occur, despite current cheap gas.
The LA Times article underlines the importance of having a flexible transportation system with multiple ways to get from point A to point B. But more than just current gas prices are at work in influencing transit usage today, and it would be a mistake to draw conclusions about the long-term health and viability of transit from recent anecdotal evidence.
-Daniel Lewis
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1 comment:
In the real world, causation flows both ways. This is an essence of a system.
I haven’t researched the topic, but I would think that mobility demand has a stronger impact on fuel prices than vice versa. I say this because even at $4/gallon, fuel is a small portion of the overall expense of mobility and freight movement. People either need to get to work by car or they don’t; trucks need to make deliveries or they don’t. Of course, there isn’t a great deal of proof that people are rational in the economic choices either. Also, with refinery and delivery systems generally operating close to capacity, small demand shifts should leverage solid price responses.
In the longer run, I can definitely see the drag of higher fuel prices hampering demand, because our spending mostly flows out of our economy. Longer term expectations about energy prices are also effecting government investment policy direction, and this doesn’t change with quivers in market prices.
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