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Can travel vouchers encourage more sustainable travel?
PERGAMON
Transport Policy 8 (2001) 107±114
www.elsevier.com/locate/tranpol
Can travel vouchers encourage more sustainable travel? A. Root 1,* University of Warwick, Warwick Business School, Local Government Centre, Gibbet Hill Road, Coventry CV4 7AL, UK Received 1 May 2000; revised 1 October 2000; accepted 1 October 2000
Abstract The growth of transportation poses dif®cult dilemmas for social and environmental policy. There is broad agreement that a variety of `carrot' and `stick' measures are needed. This article asks whether tax-free travel vouchers for employees could be important as incentives or `carrots' to encourage the use of public transport. The basic idea of it is like Luncheon Vouchers for public transport. Employers issue the vouchers and claim the tax back from the Government. Potentially, travel vouchers could generate a `win±win' situation in which transport operators' rising revenues justi®ed new services and these, in turn, encouraged more passengers. The research described here uses survey data and the National Travel Survey to examine acceptability and potential ®scal impact of a rural tax-free travel voucher scheme throughout the UK. These results show that there is suf®cient acceptance of the idea of travel vouchers in rural areas to justify the further development of this policy. q 2001 Elsevier Science Ltd. All rights reserved. Keywords: Incentive; Public transport; Rural; Sustainable; Travel vouchers
1. Introduction The objective of lessening use of private cars and increasing public transport use was established in the recent Transport White Paper (DETR, 1998) and is widely supported by environmentalists, businesses and many other groups. The White Paper recommended the introduction of charging for employee car parking spaces, and other documents such as `Preparing your Organisation for Transport in the Future' (DETR, 1999) explore a range of options for reducing use of the private car. When introduced, this will increase the pressure to ®nd alternatives to car commuting. Travel vouchers can provide an incentive not to commute by car. A main aim of the study is to produce an assessment of willingness or unwillingness to use travel vouchers, by type and size of employer. Secondly, it aims to identify the main factors that determine participation in travel voucher schemes. This is the ®rst such study of its type, as far as we are aware. There are many shared aims between more sustainable travel plans, which have been promoted by DETR (1998) and adopted by many businesses and other organisations in the UK (Potter et al., 1999; Bradshaw et al., undated) and travel vouchers. The principle behind travel plans is for * Tel.: 144-24-7657-3116; fax: 144-24-7652-4410. 1 Also at: Transport Studies Unit, University of Oxford.
employers to encourage modal change for journeys to work, by offering incentives such as reduced rate bus passes or cash payments for those who relinquish workplace car parking spaces (op cit.). Much of the motivation for introducing green travel plans comes from the environmental concerns raised earlier, and the proposal in the recent Transport White Paper and the Transport Act (DETR, 1998, 1999) to allow for local authorities to charge for workplace car parking spaces. Other countries such as the USA, Germany and France have adopted travel voucher schemes, such as Commuter Check and Travel Check (USA), Bonus Malus (Germany) and the Carte Orange (France). The basic model is that the employer issues travel vouchers, to be used to pay for travel on public transport. These vouchers are tax free, thus providing an incentive for the employers and employees to use them instead of, say, a wage increase of equivalent value. Travel vouchers operate like Luncheon Vouchers, but for travel. Commuter Check (the trademark of one of the main travel voucher schemes operating in the USA) allows employees to use tax-free vouchers, given to them by their employers, on public transport. Employers can then claim the tax back from the Government. Commuter Check has been shown to encourage greater use of public transport: for instance, for every $20 of vouchers, approximately $7 extra is generated as new revenue for transit
0967-070X/01/$ - see front matter q 2001 Elsevier Science Ltd. All rights reserved. PII: S 0967-070 X(00)00 038-X
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A. Root / Transport Policy 8 (2001) 107±114
Table 1 Summary of the survey response rate and size of businesses in Rural Oxfordshire. (Sources: Economy and Environment Unit, Oxfordshire County Council, 1999)
Table 2 UK standard industrial identi®cation of economic activities: employers in rural Oxfordshire. (Source: Economy and Environment Unit, Oxfordshire County Council, 1999)
Questionnaires distributed Questionnaires returned (Percentage response rate) Average (mean) number of employees in respondents' businesses Average (mean) number of employees in Oxfordshire's rural businesses Average (modal) number of employees in respondents' businesses
UK standard industrial identi®cation of economic activities
Employers in rural Oxfordshire
Agriculture, etc. Fishing Mining, etc. Manufacturing Electricity, gas and water supply Construction Wholesale and retail trade, etc. Hotels and restaurants Transport, etc Financial intermediation Real estate, business activities, etc. Public administration and defence, etc. Education Health and social work Other community, personal services, etc. Private households with employed persons
601 5 12 610 3 544 1535 616 238 92 1204 57 306 298 387 3
1800 226 12.5 10 11 3
companies. As a consequence, at a typical employer, employee use of public transport rose by over 30% (Oram Associates, 1994). Commuter Check has been used as a model for travel vouchers in this study. This study was aimed at businesses in rural areas mainly because rural sustainable transport issues usually receive less attention than urban ones (Root et al., 1996). Another reason for the rural focus was the availability of funding from the Countryside Agency: money that was only given on the condition that it was directed to problems found in areas with settlements of less than 10,000 people. Within this constraint, it was felt that conducting a survey in rural Oxfordshire, an area of `counter-urbanised' countryside (McLaren, 1995) provided a suitable `microcosm' for testing this initiative. 2. Methods This was a survey of 1800 rural businesses in Oxfordshire which achieved a response rate of 226 (12.5%). The questionnaire contained mainly closed questions, but one question was open-ended. Some respondents offered comments on the issues and some of these qualitative responses are given below. 3. Results Most of the businesses were small organisations, with nearly half (46%) having under ®ve employees and 76% less than ten employees (Table 1). Comparison to Oxfordshire County Council data and national data (ONS, 1998, p. 141) suggests that the survey was broadly representative of types of business in this county. The biggest single type of business represented by the respondents was private sector services, who were nearly two-thirds of those who returned the questionnaire (64%). The second biggest group was private sector manufacturers (11%), followed by farmers (7.5%). Approximately 7% of the responses were from public sector employers and 3% from schools and colleges. The remaining responses were `other'.
These proportions are comparable to the pro®le of the rural employment sector in Oxfordshire as shown in Table 2. The categories in Table 2 do not overlap exactly with those used in this survey, but they are close enough to suggest that the respondents were broadly representative of rural Oxfordshire businesses. Most of the businesses had one set of premises (74%). Sixteen per cent did have other premises and 10% of respondents did not answer this question. Approximately 50% of the sample said that their employees travelled 9000 miles, or less, in the course of their work each year. About three quarters of the sample answered that their employees travelled 27,000 miles or less in the course of work each year and the remaining quartile said that their employees travelled between 27,000 and approximately half a million miles in the course of business each year. The median for travel was 9000 miles. About two thirds of respondents said that they were situated within a ®ve minute walk of a bus stop (66.5%) and about 10% said that they were situated within a ten minute walk of a railway station. Nearly 20% (19.6%) said that they were within a ten-minute walk of a cycle path. Nearly a quarter of employees referred to by respondents were full-time women workers (24%); over a third were full-time male employees (38.5%); just over a quarter were part-time women employees (26.3%) and about 10% were part-time male workers. Interestingly, slightly more than the total number of employees reported (2240) were recorded as having different modes of travel (2397), a discrepancy probably arising because some people used more than one travel mode, or because some estimation took place. Of this sample, just over half (1472) were reported as driving to work, 13% walked (309) and 11% (268) were car passengers (Table 3).
A. Root / Transport Policy 8 (2001) 107±114
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Table 3 Modes of travel to work (numbers have been rounded) Mode of travel to work
Total number of employees
Percentages
Number of companies with workers using this mode of travel
Drive Walk Car passenger N/A (live on premises) Cycle Local bus Works bus Train Other
1472 309 268 125 120 35 14 0 46
61 13 11 5 5 2 1 0 2
154 78 52 37 52 13 4 4 11
Table 4 Reasons given for not wanting to participate in a travel vouchers scheme (numbers have been rounded) Reason
Percentage (number in brackets)
Second reason, percentage, if given (number in brackets)
No reason given/missing No public transport Local work/house (e.g. working from home or farm) Location too isolated Public transport too slow/unreliable/not convenient/not enough public transport Public transport not appropriate (tools to carry, etc.) Too small an employer/vouchers OK elsewhere Other Non-regular hours (e.g. shifts) Totals
32 (73) 25 (56) 15 (34) 7 (16) 6 (12) 4 (8) 4 (10) 4 (10) 3 (7) 100 (226)
81 (183) 3 (7) 1 (3) 3 (7) 5 (11) 1 (3) 3 (5) 1 (3) 2 (4) 100 (226)
Respondents were asked whether or not they were willing to participate in a travel vouchers scheme. Eighty two per cent said that they would not take part in a travel voucher scheme (185 respondents) and 17% (39) said that they would. 2 One per cent did not answer. The reasons which respondents gave as to why they did not want to take part are recorded in Table 4. The biggest group did not give a reason for why they did not want to participate in a travel voucher scheme. This might be because they were annoyed at being probed and/ or did not want to put more effort into the questionnaire, or because they cannot articulate their reasons for opposition very easily (transport may not be something they think about much), or for other reasons. The second biggest group, over a quarter of those replying (25% in the ®rst question and 3% in the second), said that there was no public transport serving their business's location. Another 10% said that their business was too isolated for the scheme to be applicable. This means that about a third of employers (or more if second reasons are included) feel that their geographical location and/or the lack of public transport makes a travel voucher scheme inappropriate for them. This 2 Two hundred and twenty four respondents answered this question and two did not. The responses were counted by taking as `yes' any positive answer to the previous question about the number of employees in their company who would be likely to switch to using public transport either every day or occasionally.
®gure is not surprising, given the reduction of bus and train services in many rural areas in the last few decades.3 The third biggest group said that they worked at home, or that their employees lived within walking distance of their workplace. This ®gure of nearly one in ®ve of the businesses having employees who are non-commuters is higher than might have been expected, given the high levels of car ownership in the County. 4 Employers, on their own and their employees' behalf, gave answers about the likelihood of using travel vouchers, should they become legal. About a third of employers answered that they would be likely to use travel vouchers occasionally, compared to well under a ®fth who would be likely to use them every day, i.e. 36% compared to 15% (Table 5). Estimates of usage were lower for employees. Six per cent of employees were reported as likely to change to using travel vouchers everyday, and 13% to occasional use 5 (Table 5). 3 Figures from 1991 show that of parishes with under 10,000 people in Oxfordshire in 1991, 66% had a less than seven days a week bus service and 9% had no bus service (Oxfordshire Rural Community Council, 1994). 4 Car ownership was 117 cars per 100 households in Oxfordshire in 1991 and is forecast to be 125 cars per 100 households in 2001 (Oxfordshire County Council, undated, p. 18). 5 Figures for the number of employees unlikely to use travel vouchers were obtained by using the ®gure of the total number of employers responding, and multiplying by 10, the average number of employees (Table 1) and then subtracting the number that answered af®rmatively.
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Table 5 Employers who were willing to use travel vouchers and estimates of their employees who might use travel vouchers Yes
No
Total
Percentage
Employers willing to use travel vouchers (excluding non-respondents) Every day 19 112 131 15 Occasionally 52 91 143 36 Employees willing to use travel vouchers Every day 74 1236 1310 5.7 Occasionally 191 1239 1430 13
When asked which factors were more likely to persuade employees to use travel vouchers, almost half of the respondents (47%) opted for living in proximity to frequent (half hour or more) bus/train routes. The second most frequent linkage was thought to be with a low salary (23%) and the third, car availability. Possibly linking the idea of low salary and/or car availability, 13% of respondents thought that some occupational groups would use travel vouchers more than others and just 4% thought that a high salary would be likely to make employees use travel vouchers. Approximately 8% of car drivers (124 out of 1476 car drivers) were thought likely to change if offered a travel voucher of £40 per month. Over double this number, i.e. 17% of car passengers (45 out of 268) were thought likely to change to using travel vouchers. Twenty one per cent of the employees who walked to work (66 out of 309) and approximately 18% of those cycling to work were felt likely to change if offered travel vouchers worth £40 per month. The loss of cycle trips would have environmental disbene®ts, in terms of release of climate change and other pollutants, and it would also have important public health disadvantages, in terms of reduction of exercise. However, this change may help by giving greater choice to some who feel that they are cycling because there is no other affordable option for travel. Association between willingness to take part in a travel voucher scheme and a variety of variables was tested using the Mann±Whitney U test. No signi®cant associations were found between willingness to take part and the mileage driven by employees in the course of business. 6 Similarly, no connections were found between the size of businesses, measured by the number of employees, and their willingness to take part in a travel voucher scheme,7 nor were there linkages between gender and full or part time jobs. 8 The Mann±Whitney U test indicates that there is no signi®cant association between willingness to take part 6
Asymp. Sig. (2-tailed) 0.723. Asymp. Sig. (2-tailed) 0.389. 8 For full time men the results were Asymp. Sig. (2-tailed) 0.564; for full time women Asymp. Sig (2-tailed) 0.113; for part-time men Asymp. Sig. (2-tailed) 0.751; for part-time women Asymp. Sig. (2tailed) 0.446. 7
in a travel voucher scheme and having a bus stop within a ten minute walk or a ®ve minute cycle ride of the main business premises. 9 Similarly, no signi®cant associations were found between willingness to take part in a travel voucher scheme or a cycle path within a ®ve minute cycle ride or a ten minute walk of the main (or sole) business premises. Neither did the Mann±Whitney U tests show any statistically signi®cant linkages between types of business and willingness to take part in a travel voucher scheme. 10 However, there is a signi®cant correlation between having a railway station within a ten-minute walk or a ®ve-minute cycle ride of the business premises and willingness to use travel vouchers. 11 A signi®cant association was also found between employers who had more than one premises and willingness to take part in a travel voucher scheme. 12 Cross tabulations were run between type of business and willingness to take part in a travel voucher scheme (Table 3). This shows that private sector manufacturing and education, i.e. schools/colleges, provide the highest proportion of types of business willing to use travel vouchers (33.3%). In contrast, those operating shops seem to be relatively wary of travel vouchers: just under 8% of shops would be prepared to take part in a travel voucher scheme. If a calculation of the proportions of those potentially using travel vouchers is undertaken, then private sector services (50%) and the public sector (10%) are the biggest potential users of travel vouchers. This is because of their prominence as the biggest sectors of employment in the survey (Table 6). A chi-squared test was carried out on this data to establish whether there was signi®cant variation in the responses to the question `would you be prepared to take part in a travel voucher scheme?' as answered by different types of business 13 (Table 7). The results indicate that there was a reasonably consistent body of respondents' opinion against the idea of travel vouchers. 14 Table 7 shows that private manufacturing and farms are more sympathetic to the idea of travel vouchers than the public sector and schools/colleges or private sector services, shops and `other businesses'. Manufacturing companies and farms might feel able to make more use of buses if they and their employees are in, or close to, major transport corridors. 9
Asymp. Sig. (2-tailed) 0. 763. Asymp. Sig. (2-tailed) 0.006. 11 Mann±Whitney U test for railway station Asymp. Sig. (2-tailed) 0. 02; Mann±Whitney U test for cycle path Asymp. Sig. (2-tailed) 0.97. 12 Asymp. Sig. (2-tailed) 0.244. 13 The Pearson chi-squared test on business categories that have been amalgamated to eliminate problems with fewer than ®ve respondents in each cell, came to 0.89. 14 That is, with 2 degrees of freedom, and a signi®cance probability of 5% the chi-square statistic is 5.99. The calculated ®gure of 0.89 indicates a close ®t between the observed and expected values, with a model in which approximately 80% of the respondents did not want to take part in a travel voucher scheme as suggested by the questionnaire. 10
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Table 6 Types of business and willingness to use travel vouchers (cross-tabulations and percentages) (numbers have been rounded) Business
Private sector manufacturing School/college Public sector Farm Private sector services Shop Other Total
Travel voucher scheme
within private sector manufacturing category within willingness to use travel vouchers Count within school/college category within willingness to use travel vouchers Count within public sector category within willingness to use travel vouchers Count within farm category within willingness to use travel vouchers Count within private sector services category within willingness to use travel vouchers Count within shop category within willingness to use travel vouchers Count within `other' business category within willingness to use travel vouchers Count within the business category within willingness to use travel vouchers Count
Total
Would take part (%)
Would not take part (%)
33 21 8 33 5 2 25 10 4 18 8 3 14 50 19 8 3 1 50 3 1 18 100 38
67 9 16 67 2 4 75 7 12 82 8 13 86 66 120 92 7 12 50 1 1 82 100 179
100 11.1 24 100 2.8 6 100 7.4 16 100 7.8 17 100 63.1 139 100 6 13 100 0.9 2 100 100 217
Table 7 Support for travel voucher scheme from different businesses: observed and expected counts and Pearson chi-square (numbers have been rounded) Business
Private sector manufacturing and farms Public sector and schools/colleges Private sector services, shops and businesses in `other' category
Observed and expected counts
Observed Expected Observed Expected Observed Expected Total observed Total expected Pearson chi-square
This might be the cause of their greater willingness to use travel vouchers. 4. Discussion There are other major employer-led initiatives to increase bus and train use in the UK, North America and Europe: other countries' schemes include the `Carte Orange' in Paris and the German `Bonus Malus' scheme. The strengths and weaknesses of these programmes appear to lie in a combination of factors, including the higher levels of investment in public transport and the willingness of central
Travel voucher scheme Would take part
Would not take part
11 7 6 4 21 26 38 38
30 34 16 18 133 128 179 179 0.88813
government to use ®scal measures to encourage use of public transport (DETR, 1998; Batchelor, 1999; Potter et al., 1998). In the UK the experience of offering travelcards to commuters by BAA at Heathrow has been, in contrast, rather disappointing 15 (Potter et al., 1998, p. 17). Similar schemes such as half-price travelcards for `New Deal' participants and `Jobsearch' travelcards for the unemployed are more successful, in terms of allowing greater mobility to a
15 BAA made the offer of a free annual Travelcard to over 2000 staff who lived in Slough, but only 300 used the scheme (Potter et al., 1998, p. 17).
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A. Root / Transport Policy 8 (2001) 107±114
relatively mobility restricted groups (DETR, 1998; Skinner and Ferguson, 1998). Although the numbers estimated to be likely to change are small (i.e. 5.7% of employees changing every day), this level of change, if it happened, would produce substantial change in congestion levels and public transport usage. But the question that remains is whether, given the relatively high level of public resistance to travel vouchers found by this survey, the merits of such a system could outweigh the disadvantages. A discussion of the issues of this case follows. 4.1. Possible advantages Our ®ndings suggest that rural employers with more than one premises and employers where the workplace is within a ®ve minute walk or a ten minute cycle ride of a railway station would be more likely to use travel vouchers. This could have important effects on take-up, although the impact might be relatively small due to the fairly low number of workplaces that have more than one base and are this close to railway stations. Travel vouchers have some advantages as a means of `sweetening' possible ®scal transport policies (Coleman and Curtis, 1997; Bradshaw et al., undated). After the Transport White Paper (DETR, 1998), enabling legislation is awaited to allow local authorities to introduce road charging or congestion charging. Details have now been announced of a forthcoming Transport Bill for the next session of Parliament (Batchelor, 1999). Travel vouchers might be seen as a carrot to compensate for these taxation `sticks' (Coleman, 1999; Coleman and Curtis, 1997). If used by motorists, a travel voucher scheme could encourage modal shift away from cars. It would, in this way, confer a range of environmental and social bene®ts such as minimising pollution and congestion and reducing the social severance caused by traf®c (Oram Associates, 1994; Oxfordshire Chamber of Commerce and Industry and Oxfordshire County Council, 1997). However, it should be noted that as traf®c is increasing fastest in rural areas (Cullinane and Stokes, 1998) it is likely that other (`stick') measures would need to be added if the small gains made through a travel voucher scheme are not to be lost through the relatively high growth rate in car use in rural areas. A travel voucher scheme might mean extra patronage on buses that could help to ®nance further service improvements. This would have positive equity effects, as existing bus users would bene®t from service enhancements and the existing users who are predominantly low-income and/or disadvantaged by a range of factors (White, 1998; Skinner and Fergusson, 1998; Grayling, 1999). 4.2. Possible disadvantages The administrative costs of such a scheme might be offputting or too high. There would be proportionally small
revenue losses to the Inland Revenue but the travel voucher scheme(s) themselves would need to be administered. In the USA, administration is done on a commercial basis, but careful scrutiny of best practice in other countries would be needed to ensure that such a method of ®nancing travel vouchers was viable. This might limit travel voucher scheme take up. There is also a capacity problem. Trains and buses are already too crowded in some places at some times of day, so a scheme that encouraged further use might be unwelcome. This problem is likely to be particularly prevalent in the south-east, where many commuter trains to London are already overcrowded and it can cost ten times more than buses to upgrade services (Grayling, 1999). The ability to increase capacity is limited on the railways by track capacity and land availability, although extra investment should make further services possible (DETR, 1998). But there is scope to increase bus availability more easily and so it would seem to be reasonable to try to encourage a modal shift to buses in areas where there are greatest problems with rail and underground capacity. Thus, it might be sensible to restrict the usage of travel vouchers for the London `travel to work area' (as de®ned by the Census) to buses in the rush hour for this reason. Geographical and peak hour inequalities such as this could be partially justi®ed by different region's public transport capacities (DETR, 1997). Restricting travel vouchers in this way would be unlikely to affect the poorest in London and the south-east because they would be much more likely to already use the buses rather than trains (Grayling, 1999). This scheme might most encourage occasional new users of public transport (i.e. once or twice weekly bus trips which are shifted from cars) but might not trigger a large change in existing public transport users. Evidence from the USA shows that the introduction of travel vouchers usually has most effect on existing users of public transport, who most often increase their ridership when travel vouchers are available (Oram Associates, 1994). Experience from the USA shows that of those receiving travel vouchers from schemes run by Commuter Check in the San Francisco Bay area the biggest change was in those making 3±4 more work trips per week by public transport and 1±2 non-work trips each week by public transport. There are also, of course, potential ®scal disadvantages to travel voucher schemes. For instance, there is likely to be a loss of revenue to the Government. This would be money that would otherwise be paid as wages and so would be taxable. However, in the USA, this sum is felt to be relatively small as most of the money used by employers to pay for travel vouchers is not felt to be money that would otherwise be paid as wages. Instead, it is felt that travel vouchers are used as a `perk' and given as an additional bonus, irrespective of wage deals (Oram, 1999). For this reason, in the USA the upper limit on the amount that can be given in travel vouchers was recently removed (Commuter Check, 1999).
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Table 8 Access to car by location of workplace for those living in rural areas (percentages). (Source: Cullinane and Stokes, 1998, p. 33, originally from National Travel Survey 1988±91)
London Central London Outer Conurbation centre Conurbation suburb Other urban centre Other urban suburb Not urban Not working Total
Company car main driver
Main driver of household car
Other driver
42.9 18.2
28.6 81.8 83.3 56.5 56.3 63.8 60.1 28.9 40.7
19.0
4.8
4.8
17.4 17.0 12.9 13.8 11.3 12.5
16.7 13.0 13.5 12.3 19.8 24.0 20.6
1.3 0.7 1.6 34.1 21.7
13.0 11.9 10.3 4.7 1.7 4.6
Non driver
Under 17
Percentage of all 0.6 0.3 0.2 0.7 9.3 13.6 12.8 62.2 100
A recent survey suggested that 30% of car drivers living in rural areas work in cities (Lex, 1997). Figures from the National Travel Survey offer a similar, but slightly lower ®gure of 24.7% of those living in rural areas who have access to a car and work in an urban area or conurbation (Cullinane and Stokes, 1998, p. 33 and Table 7). Their ®gures from The National Travel Survey also show that 12.8% of the rural population have access to a car and work in a rural area (op cit. and Table 8). These ®gures can be combined, to show that those who have access to a car and who live and work in rural areas and those who also have access to a car and live in a rural area but work in a non-rural area, comprise 37.5% of the total rural population. (That is, respectively, 12.8 and 24.7% of the rural population.) From this survey, a conservative `rule of thumb' ®gure would be that 19.1% of employees were felt by their employers to be likely to use travel vouchers, either occasionally or every day (Table 5). Using the ®gures given by Commuter Check (1999), then approximately 7.2% of rural residents (that is, 19.1% of 37.5% of the eligible rural population) would be likely to use tax-free vouchers for some journeys to work. In 1998 there were 12,042,000 people in the UK in registered employment (GSS, 1999, p. 86). Following commonly used OPCS de®nitions of rurality, approximately 10% of the UK population can be considered to live in rural areas (this is de®ned as settlements under 10,000 population) (op cit. p. 33). This means that approximately 1,204,200 of the employed population (10% of 12,042,000) will be living in rural areas. Thus, assuming on this evidence that 7.2% of the rural population are likely to use travel vouchers, approximately 87,000 rural residents will be likely to use them. Commuter Check evidence in the USA shows that the average (modal) value of travel vouchers given was $20 per month in 1994 (Oram Associates, 1994; IBI Group, 1999). This is equivalent to approximately 0.9% of an average US annual income of $26,980 (Phillip, 1999). The UK equivalised 16 weekly income (before housing costs) is £309
per week (DSS, 1999), thus a travel voucher to the value of 0.9% of this would be worth about £3.00. Average weekly expenditure on fares and other travel costs (excluding motoring) in 1997±98 was £8.10 (GSS, 1998, p. 69). Although the sum of £3 per week seems small, US evidence suggests that the actual value of travel vouchers makes very little difference to usage (Oram Associates, 1994). Therefore tax loss to the UK Government of introducing rural travel vouchers would be likely to be from tax free income of £3 per week to a range of 65,000±110,000 employees, allowing a 25% margin for changes in uptake. This would involve a tax-free amount of £195,000 to £333,000 annually. Assuming a 23% standard tax rate, this would mean an annual loss of between £45,000 and £76,500 tax revenue if this measure was introduced in rural areas. This is a negligible proportion of national tax revenue (ONS, 1996) and echoes Canadian research ®ndings that indicate that travel vouchers can be introduced at negligible cost (Litman, 1997). Any loss of direct revenue to the Government can be offset by environmental protection, reduction of harmful emissions, so possible reduction of health costs due to fewer respiratory diseases, cancers and accidents, 17 etc. (Acheson, 1999). There would also be savings to the economy made through less congestion and savings in terms of greater social inclusion, due to less traf®c in streets (Whitelegg, 1993). The losses in strictly ®nancial terms could be mitigated by many other factors.
16 `Equivalised' means that ®gures have been adjusted to take account of number of dependants. This ®gure excludes the income of the selfemployed.
17 For example, estimates of annual costs imposed on California by motor vehicle pollution were in the range of $0.5±$10.7 billion (Whitelegg,1993, p. 137).
5. Conclusions This survey has shown that there is limited acceptance of approximately one in ®ve employers of the idea of using travel vouchers amongst rural employers in Oxfordshire. This level of acceptance would provide a suf®ciently big pool of participating businesses to suggest that a rural and
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A. Root / Transport Policy 8 (2001) 107±114
possibly, a national, trial travel voucher scheme is worthwhile. In the UK, our ®ndings suggest that take up of travel vouchers would be likely to be highest amongst employers with more than one base or set of premises and where the workplace is within a ®ve minute walk or a ten minute cycle ride of a railway station. Resistance, where a reason was speci®ed, is mostly due to perceptions of poor public transport provision. Those who feel that public transport provision is insuf®ciently good to make their participation worthwhile would `self select' out of the scheme. This may mean that there is more take-up in urban and suburban areas, but if introduced in conjunction with congestion charging travel vouchers might equalise the greater costs for drivers in more built-up areas. Ability to increase capacity is limited on the railways and the London Underground by track capacity and land availability, although extra investment should make further services possible. But there is scope to increase bus availability more easily and so it would seem to be reasonable to try to encourage a modal shift to buses in areas where there is greatest problems with rail and underground capacity. Thus, it would seem sensible to try to ®nd ways of encouraging travel voucher use in the big conurbations outside London, where scope for an increase in bus provision is biggest. The above exploration of the strengths, weaknesses and appeal of travel vouchers is inconclusive because of its limited rural scope. It needs further work in order to determine more about how employers and employees in nonrural locations would react to travel vouchers. Acknowledgements This research in which this article was based was cofunded by the Rural Development Commission (now part of the Countryside Agency) and the Rees Jeffreys Road Fund. My grateful thanks are due to them for the support that has made this project possible. Gratitude is also due to Dr John Preston, Sylvia Boyce and Ann Heath of the Transport Studies Unit, University of Oxford, for much on-going support and invaluable assistance. My thanks are also due to the two anonymous referees who made extremely detailed and helpful suggestions about ways to improve this article. The usual disclaimers apply. References Acheson, D., 1999. Report on Independent Inquiry into Inequalities in Health. TSO, London. Batchelor, C., 1999. Opposition hits out over plan to charge motorists. The Financial Times, 18 November , London. Bradshaw, R., Grosvenor, T., Wo®nden, D., undated. Employers' Attitudes
to green commuter plans. MOSAIC paper. Transport Studies Group, University of Westminster. Coleman, C., 1999. Employers' attitudes and policy towards staff travel. Working Paper No 181, School of Planning, Oxford Brookes University, Oxford. Coleman, C., Curtis, C., 1997. Reducing car-based journeys to work: what potential is there and whose responsibility is it? Local Environment, Vol. 2, No. 1. Commuter Check, 1999. Web site: http://commutercheck.com/Tax_code.html Cullinane, S., Stokes, G., 1998. Rural Transport Policy. Pergamon, Oxford. DETR, 1997. Building Partnerships for Prosperity: White Paper on Regions. The Stationery Of®ce, London. DETR, 1998. A New Deal for Transport: Better for Everyone. The Stationery Of®ce, London. DETR, 1999. Preparing your Organisation for Transport in the Future: The Bene®ts of Green Transport Plans. The Stationery Of®ce, London. Department of Social Security (DSS), 1999. Personal communication. Economy and Environment Unit, Oxfordshire County Council, 1999. Number of People Employed by Businesses based in Rural Oxfordshire. Personal correspondence. Government Statistical Service 1998. Family Spending: a Report on the 1997±98 Family Expenditure Survey. Government Statistical Service, London. Government Statistical Service 1999. Annual Abstract of Statistics. Government Statistical Service, London. Grayling, T. 1999. Don't let it pass you by. The Guardian, 10 November. IBI Group, 1999. Tax exempt status for employee provided transit passes, accessed from http://www.tc.gc.ca/envaffairs/subgroups1/passenger_urban/study5/Exec_Su¼/TransitPass.html on 12 October 2000. Lex, 1997. Lex Report on Motoring. Lex Service plc, London. Litman, T., 1997. Employer provided transit passes: a tax exempt bene®t. Victoria Transport Policy Institute, British Columbia, Canada (see www.vtpi.org). McLaren, D., 1995. Counter-Urbanisation: How Do We Achieve a Trend Breach?. Friends of the Earth Trust, London. Of®ce for National Statistics (ONS), 1996. United Kingdom National Accounts. The Stationery Of®ce, London. ONS, 1998. Annual Abstract of Statistics, 1998 ed. The Stationery Of®ce, London. Oram Associates 1994. Impact of the Bay Area Commuter Check Program: results of employee survey. Prepared for the Metropolitan Transportation Commission, Oakland, California, Oram Associates, New York, USA. Oram, R., 1999. Personal communication. Oxfordshire Chamber of Commerce and Industry and Oxfordshire County Council, 1997. Better ways to work. Travelwise, Oxfordshire Chamber of Commerce and Industry and Oxfordshire County Council, Oxford. Oxfordshire County Council, undated. Transport in Oxfordshire, Oxfordshire County Council, Oxford. Oxfordshire Rural Community Council 1994. Survey of rural services: April±July 1994, Worton, Oxfordshire. Phillip, G., 1999. Geographical Digest. Phillip, London. Potter, S., Rye, T., Smith, M., 1998. Tax and Green Transport Plans. Faculty of Technology, The Open University, Milton Keynes. Root, A., Boardman, B., Fielding, W., 1996. Rural travel and transport corridors, interim report. University of Oxford, Oxford. Skinner, I., Fergusson, M., 1998. Transport Taxation and Equity. Institute of Public Policy Research (IPPR) Monograph. IPPR, London. White, P. 1998. Bus services in an integrated transport system: some implications of the Integrated Transport Paper. Paper given at Aston University, 18 November. Whitelegg, J., 1993. Transport for a Sustainable Future: the Case of Europe. Belhaven Press, London.
Transport Policy 8 (2001) 107±114
www.elsevier.com/locate/tranpol
Can travel vouchers encourage more sustainable travel? A. Root 1,* University of Warwick, Warwick Business School, Local Government Centre, Gibbet Hill Road, Coventry CV4 7AL, UK Received 1 May 2000; revised 1 October 2000; accepted 1 October 2000
Abstract The growth of transportation poses dif®cult dilemmas for social and environmental policy. There is broad agreement that a variety of `carrot' and `stick' measures are needed. This article asks whether tax-free travel vouchers for employees could be important as incentives or `carrots' to encourage the use of public transport. The basic idea of it is like Luncheon Vouchers for public transport. Employers issue the vouchers and claim the tax back from the Government. Potentially, travel vouchers could generate a `win±win' situation in which transport operators' rising revenues justi®ed new services and these, in turn, encouraged more passengers. The research described here uses survey data and the National Travel Survey to examine acceptability and potential ®scal impact of a rural tax-free travel voucher scheme throughout the UK. These results show that there is suf®cient acceptance of the idea of travel vouchers in rural areas to justify the further development of this policy. q 2001 Elsevier Science Ltd. All rights reserved. Keywords: Incentive; Public transport; Rural; Sustainable; Travel vouchers
1. Introduction The objective of lessening use of private cars and increasing public transport use was established in the recent Transport White Paper (DETR, 1998) and is widely supported by environmentalists, businesses and many other groups. The White Paper recommended the introduction of charging for employee car parking spaces, and other documents such as `Preparing your Organisation for Transport in the Future' (DETR, 1999) explore a range of options for reducing use of the private car. When introduced, this will increase the pressure to ®nd alternatives to car commuting. Travel vouchers can provide an incentive not to commute by car. A main aim of the study is to produce an assessment of willingness or unwillingness to use travel vouchers, by type and size of employer. Secondly, it aims to identify the main factors that determine participation in travel voucher schemes. This is the ®rst such study of its type, as far as we are aware. There are many shared aims between more sustainable travel plans, which have been promoted by DETR (1998) and adopted by many businesses and other organisations in the UK (Potter et al., 1999; Bradshaw et al., undated) and travel vouchers. The principle behind travel plans is for * Tel.: 144-24-7657-3116; fax: 144-24-7652-4410. 1 Also at: Transport Studies Unit, University of Oxford.
employers to encourage modal change for journeys to work, by offering incentives such as reduced rate bus passes or cash payments for those who relinquish workplace car parking spaces (op cit.). Much of the motivation for introducing green travel plans comes from the environmental concerns raised earlier, and the proposal in the recent Transport White Paper and the Transport Act (DETR, 1998, 1999) to allow for local authorities to charge for workplace car parking spaces. Other countries such as the USA, Germany and France have adopted travel voucher schemes, such as Commuter Check and Travel Check (USA), Bonus Malus (Germany) and the Carte Orange (France). The basic model is that the employer issues travel vouchers, to be used to pay for travel on public transport. These vouchers are tax free, thus providing an incentive for the employers and employees to use them instead of, say, a wage increase of equivalent value. Travel vouchers operate like Luncheon Vouchers, but for travel. Commuter Check (the trademark of one of the main travel voucher schemes operating in the USA) allows employees to use tax-free vouchers, given to them by their employers, on public transport. Employers can then claim the tax back from the Government. Commuter Check has been shown to encourage greater use of public transport: for instance, for every $20 of vouchers, approximately $7 extra is generated as new revenue for transit
0967-070X/01/$ - see front matter q 2001 Elsevier Science Ltd. All rights reserved. PII: S 0967-070 X(00)00 038-X
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A. Root / Transport Policy 8 (2001) 107±114
Table 1 Summary of the survey response rate and size of businesses in Rural Oxfordshire. (Sources: Economy and Environment Unit, Oxfordshire County Council, 1999)
Table 2 UK standard industrial identi®cation of economic activities: employers in rural Oxfordshire. (Source: Economy and Environment Unit, Oxfordshire County Council, 1999)
Questionnaires distributed Questionnaires returned (Percentage response rate) Average (mean) number of employees in respondents' businesses Average (mean) number of employees in Oxfordshire's rural businesses Average (modal) number of employees in respondents' businesses
UK standard industrial identi®cation of economic activities
Employers in rural Oxfordshire
Agriculture, etc. Fishing Mining, etc. Manufacturing Electricity, gas and water supply Construction Wholesale and retail trade, etc. Hotels and restaurants Transport, etc Financial intermediation Real estate, business activities, etc. Public administration and defence, etc. Education Health and social work Other community, personal services, etc. Private households with employed persons
601 5 12 610 3 544 1535 616 238 92 1204 57 306 298 387 3
1800 226 12.5 10 11 3
companies. As a consequence, at a typical employer, employee use of public transport rose by over 30% (Oram Associates, 1994). Commuter Check has been used as a model for travel vouchers in this study. This study was aimed at businesses in rural areas mainly because rural sustainable transport issues usually receive less attention than urban ones (Root et al., 1996). Another reason for the rural focus was the availability of funding from the Countryside Agency: money that was only given on the condition that it was directed to problems found in areas with settlements of less than 10,000 people. Within this constraint, it was felt that conducting a survey in rural Oxfordshire, an area of `counter-urbanised' countryside (McLaren, 1995) provided a suitable `microcosm' for testing this initiative. 2. Methods This was a survey of 1800 rural businesses in Oxfordshire which achieved a response rate of 226 (12.5%). The questionnaire contained mainly closed questions, but one question was open-ended. Some respondents offered comments on the issues and some of these qualitative responses are given below. 3. Results Most of the businesses were small organisations, with nearly half (46%) having under ®ve employees and 76% less than ten employees (Table 1). Comparison to Oxfordshire County Council data and national data (ONS, 1998, p. 141) suggests that the survey was broadly representative of types of business in this county. The biggest single type of business represented by the respondents was private sector services, who were nearly two-thirds of those who returned the questionnaire (64%). The second biggest group was private sector manufacturers (11%), followed by farmers (7.5%). Approximately 7% of the responses were from public sector employers and 3% from schools and colleges. The remaining responses were `other'.
These proportions are comparable to the pro®le of the rural employment sector in Oxfordshire as shown in Table 2. The categories in Table 2 do not overlap exactly with those used in this survey, but they are close enough to suggest that the respondents were broadly representative of rural Oxfordshire businesses. Most of the businesses had one set of premises (74%). Sixteen per cent did have other premises and 10% of respondents did not answer this question. Approximately 50% of the sample said that their employees travelled 9000 miles, or less, in the course of their work each year. About three quarters of the sample answered that their employees travelled 27,000 miles or less in the course of work each year and the remaining quartile said that their employees travelled between 27,000 and approximately half a million miles in the course of business each year. The median for travel was 9000 miles. About two thirds of respondents said that they were situated within a ®ve minute walk of a bus stop (66.5%) and about 10% said that they were situated within a ten minute walk of a railway station. Nearly 20% (19.6%) said that they were within a ten-minute walk of a cycle path. Nearly a quarter of employees referred to by respondents were full-time women workers (24%); over a third were full-time male employees (38.5%); just over a quarter were part-time women employees (26.3%) and about 10% were part-time male workers. Interestingly, slightly more than the total number of employees reported (2240) were recorded as having different modes of travel (2397), a discrepancy probably arising because some people used more than one travel mode, or because some estimation took place. Of this sample, just over half (1472) were reported as driving to work, 13% walked (309) and 11% (268) were car passengers (Table 3).
A. Root / Transport Policy 8 (2001) 107±114
109
Table 3 Modes of travel to work (numbers have been rounded) Mode of travel to work
Total number of employees
Percentages
Number of companies with workers using this mode of travel
Drive Walk Car passenger N/A (live on premises) Cycle Local bus Works bus Train Other
1472 309 268 125 120 35 14 0 46
61 13 11 5 5 2 1 0 2
154 78 52 37 52 13 4 4 11
Table 4 Reasons given for not wanting to participate in a travel vouchers scheme (numbers have been rounded) Reason
Percentage (number in brackets)
Second reason, percentage, if given (number in brackets)
No reason given/missing No public transport Local work/house (e.g. working from home or farm) Location too isolated Public transport too slow/unreliable/not convenient/not enough public transport Public transport not appropriate (tools to carry, etc.) Too small an employer/vouchers OK elsewhere Other Non-regular hours (e.g. shifts) Totals
32 (73) 25 (56) 15 (34) 7 (16) 6 (12) 4 (8) 4 (10) 4 (10) 3 (7) 100 (226)
81 (183) 3 (7) 1 (3) 3 (7) 5 (11) 1 (3) 3 (5) 1 (3) 2 (4) 100 (226)
Respondents were asked whether or not they were willing to participate in a travel vouchers scheme. Eighty two per cent said that they would not take part in a travel voucher scheme (185 respondents) and 17% (39) said that they would. 2 One per cent did not answer. The reasons which respondents gave as to why they did not want to take part are recorded in Table 4. The biggest group did not give a reason for why they did not want to participate in a travel voucher scheme. This might be because they were annoyed at being probed and/ or did not want to put more effort into the questionnaire, or because they cannot articulate their reasons for opposition very easily (transport may not be something they think about much), or for other reasons. The second biggest group, over a quarter of those replying (25% in the ®rst question and 3% in the second), said that there was no public transport serving their business's location. Another 10% said that their business was too isolated for the scheme to be applicable. This means that about a third of employers (or more if second reasons are included) feel that their geographical location and/or the lack of public transport makes a travel voucher scheme inappropriate for them. This 2 Two hundred and twenty four respondents answered this question and two did not. The responses were counted by taking as `yes' any positive answer to the previous question about the number of employees in their company who would be likely to switch to using public transport either every day or occasionally.
®gure is not surprising, given the reduction of bus and train services in many rural areas in the last few decades.3 The third biggest group said that they worked at home, or that their employees lived within walking distance of their workplace. This ®gure of nearly one in ®ve of the businesses having employees who are non-commuters is higher than might have been expected, given the high levels of car ownership in the County. 4 Employers, on their own and their employees' behalf, gave answers about the likelihood of using travel vouchers, should they become legal. About a third of employers answered that they would be likely to use travel vouchers occasionally, compared to well under a ®fth who would be likely to use them every day, i.e. 36% compared to 15% (Table 5). Estimates of usage were lower for employees. Six per cent of employees were reported as likely to change to using travel vouchers everyday, and 13% to occasional use 5 (Table 5). 3 Figures from 1991 show that of parishes with under 10,000 people in Oxfordshire in 1991, 66% had a less than seven days a week bus service and 9% had no bus service (Oxfordshire Rural Community Council, 1994). 4 Car ownership was 117 cars per 100 households in Oxfordshire in 1991 and is forecast to be 125 cars per 100 households in 2001 (Oxfordshire County Council, undated, p. 18). 5 Figures for the number of employees unlikely to use travel vouchers were obtained by using the ®gure of the total number of employers responding, and multiplying by 10, the average number of employees (Table 1) and then subtracting the number that answered af®rmatively.
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A. Root / Transport Policy 8 (2001) 107±114
Table 5 Employers who were willing to use travel vouchers and estimates of their employees who might use travel vouchers Yes
No
Total
Percentage
Employers willing to use travel vouchers (excluding non-respondents) Every day 19 112 131 15 Occasionally 52 91 143 36 Employees willing to use travel vouchers Every day 74 1236 1310 5.7 Occasionally 191 1239 1430 13
When asked which factors were more likely to persuade employees to use travel vouchers, almost half of the respondents (47%) opted for living in proximity to frequent (half hour or more) bus/train routes. The second most frequent linkage was thought to be with a low salary (23%) and the third, car availability. Possibly linking the idea of low salary and/or car availability, 13% of respondents thought that some occupational groups would use travel vouchers more than others and just 4% thought that a high salary would be likely to make employees use travel vouchers. Approximately 8% of car drivers (124 out of 1476 car drivers) were thought likely to change if offered a travel voucher of £40 per month. Over double this number, i.e. 17% of car passengers (45 out of 268) were thought likely to change to using travel vouchers. Twenty one per cent of the employees who walked to work (66 out of 309) and approximately 18% of those cycling to work were felt likely to change if offered travel vouchers worth £40 per month. The loss of cycle trips would have environmental disbene®ts, in terms of release of climate change and other pollutants, and it would also have important public health disadvantages, in terms of reduction of exercise. However, this change may help by giving greater choice to some who feel that they are cycling because there is no other affordable option for travel. Association between willingness to take part in a travel voucher scheme and a variety of variables was tested using the Mann±Whitney U test. No signi®cant associations were found between willingness to take part and the mileage driven by employees in the course of business. 6 Similarly, no connections were found between the size of businesses, measured by the number of employees, and their willingness to take part in a travel voucher scheme,7 nor were there linkages between gender and full or part time jobs. 8 The Mann±Whitney U test indicates that there is no signi®cant association between willingness to take part 6
Asymp. Sig. (2-tailed) 0.723. Asymp. Sig. (2-tailed) 0.389. 8 For full time men the results were Asymp. Sig. (2-tailed) 0.564; for full time women Asymp. Sig (2-tailed) 0.113; for part-time men Asymp. Sig. (2-tailed) 0.751; for part-time women Asymp. Sig. (2tailed) 0.446. 7
in a travel voucher scheme and having a bus stop within a ten minute walk or a ®ve minute cycle ride of the main business premises. 9 Similarly, no signi®cant associations were found between willingness to take part in a travel voucher scheme or a cycle path within a ®ve minute cycle ride or a ten minute walk of the main (or sole) business premises. Neither did the Mann±Whitney U tests show any statistically signi®cant linkages between types of business and willingness to take part in a travel voucher scheme. 10 However, there is a signi®cant correlation between having a railway station within a ten-minute walk or a ®ve-minute cycle ride of the business premises and willingness to use travel vouchers. 11 A signi®cant association was also found between employers who had more than one premises and willingness to take part in a travel voucher scheme. 12 Cross tabulations were run between type of business and willingness to take part in a travel voucher scheme (Table 3). This shows that private sector manufacturing and education, i.e. schools/colleges, provide the highest proportion of types of business willing to use travel vouchers (33.3%). In contrast, those operating shops seem to be relatively wary of travel vouchers: just under 8% of shops would be prepared to take part in a travel voucher scheme. If a calculation of the proportions of those potentially using travel vouchers is undertaken, then private sector services (50%) and the public sector (10%) are the biggest potential users of travel vouchers. This is because of their prominence as the biggest sectors of employment in the survey (Table 6). A chi-squared test was carried out on this data to establish whether there was signi®cant variation in the responses to the question `would you be prepared to take part in a travel voucher scheme?' as answered by different types of business 13 (Table 7). The results indicate that there was a reasonably consistent body of respondents' opinion against the idea of travel vouchers. 14 Table 7 shows that private manufacturing and farms are more sympathetic to the idea of travel vouchers than the public sector and schools/colleges or private sector services, shops and `other businesses'. Manufacturing companies and farms might feel able to make more use of buses if they and their employees are in, or close to, major transport corridors. 9
Asymp. Sig. (2-tailed) 0. 763. Asymp. Sig. (2-tailed) 0.006. 11 Mann±Whitney U test for railway station Asymp. Sig. (2-tailed) 0. 02; Mann±Whitney U test for cycle path Asymp. Sig. (2-tailed) 0.97. 12 Asymp. Sig. (2-tailed) 0.244. 13 The Pearson chi-squared test on business categories that have been amalgamated to eliminate problems with fewer than ®ve respondents in each cell, came to 0.89. 14 That is, with 2 degrees of freedom, and a signi®cance probability of 5% the chi-square statistic is 5.99. The calculated ®gure of 0.89 indicates a close ®t between the observed and expected values, with a model in which approximately 80% of the respondents did not want to take part in a travel voucher scheme as suggested by the questionnaire. 10
A. Root / Transport Policy 8 (2001) 107±114
111
Table 6 Types of business and willingness to use travel vouchers (cross-tabulations and percentages) (numbers have been rounded) Business
Private sector manufacturing School/college Public sector Farm Private sector services Shop Other Total
Travel voucher scheme
within private sector manufacturing category within willingness to use travel vouchers Count within school/college category within willingness to use travel vouchers Count within public sector category within willingness to use travel vouchers Count within farm category within willingness to use travel vouchers Count within private sector services category within willingness to use travel vouchers Count within shop category within willingness to use travel vouchers Count within `other' business category within willingness to use travel vouchers Count within the business category within willingness to use travel vouchers Count
Total
Would take part (%)
Would not take part (%)
33 21 8 33 5 2 25 10 4 18 8 3 14 50 19 8 3 1 50 3 1 18 100 38
67 9 16 67 2 4 75 7 12 82 8 13 86 66 120 92 7 12 50 1 1 82 100 179
100 11.1 24 100 2.8 6 100 7.4 16 100 7.8 17 100 63.1 139 100 6 13 100 0.9 2 100 100 217
Table 7 Support for travel voucher scheme from different businesses: observed and expected counts and Pearson chi-square (numbers have been rounded) Business
Private sector manufacturing and farms Public sector and schools/colleges Private sector services, shops and businesses in `other' category
Observed and expected counts
Observed Expected Observed Expected Observed Expected Total observed Total expected Pearson chi-square
This might be the cause of their greater willingness to use travel vouchers. 4. Discussion There are other major employer-led initiatives to increase bus and train use in the UK, North America and Europe: other countries' schemes include the `Carte Orange' in Paris and the German `Bonus Malus' scheme. The strengths and weaknesses of these programmes appear to lie in a combination of factors, including the higher levels of investment in public transport and the willingness of central
Travel voucher scheme Would take part
Would not take part
11 7 6 4 21 26 38 38
30 34 16 18 133 128 179 179 0.88813
government to use ®scal measures to encourage use of public transport (DETR, 1998; Batchelor, 1999; Potter et al., 1998). In the UK the experience of offering travelcards to commuters by BAA at Heathrow has been, in contrast, rather disappointing 15 (Potter et al., 1998, p. 17). Similar schemes such as half-price travelcards for `New Deal' participants and `Jobsearch' travelcards for the unemployed are more successful, in terms of allowing greater mobility to a
15 BAA made the offer of a free annual Travelcard to over 2000 staff who lived in Slough, but only 300 used the scheme (Potter et al., 1998, p. 17).
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A. Root / Transport Policy 8 (2001) 107±114
relatively mobility restricted groups (DETR, 1998; Skinner and Ferguson, 1998). Although the numbers estimated to be likely to change are small (i.e. 5.7% of employees changing every day), this level of change, if it happened, would produce substantial change in congestion levels and public transport usage. But the question that remains is whether, given the relatively high level of public resistance to travel vouchers found by this survey, the merits of such a system could outweigh the disadvantages. A discussion of the issues of this case follows. 4.1. Possible advantages Our ®ndings suggest that rural employers with more than one premises and employers where the workplace is within a ®ve minute walk or a ten minute cycle ride of a railway station would be more likely to use travel vouchers. This could have important effects on take-up, although the impact might be relatively small due to the fairly low number of workplaces that have more than one base and are this close to railway stations. Travel vouchers have some advantages as a means of `sweetening' possible ®scal transport policies (Coleman and Curtis, 1997; Bradshaw et al., undated). After the Transport White Paper (DETR, 1998), enabling legislation is awaited to allow local authorities to introduce road charging or congestion charging. Details have now been announced of a forthcoming Transport Bill for the next session of Parliament (Batchelor, 1999). Travel vouchers might be seen as a carrot to compensate for these taxation `sticks' (Coleman, 1999; Coleman and Curtis, 1997). If used by motorists, a travel voucher scheme could encourage modal shift away from cars. It would, in this way, confer a range of environmental and social bene®ts such as minimising pollution and congestion and reducing the social severance caused by traf®c (Oram Associates, 1994; Oxfordshire Chamber of Commerce and Industry and Oxfordshire County Council, 1997). However, it should be noted that as traf®c is increasing fastest in rural areas (Cullinane and Stokes, 1998) it is likely that other (`stick') measures would need to be added if the small gains made through a travel voucher scheme are not to be lost through the relatively high growth rate in car use in rural areas. A travel voucher scheme might mean extra patronage on buses that could help to ®nance further service improvements. This would have positive equity effects, as existing bus users would bene®t from service enhancements and the existing users who are predominantly low-income and/or disadvantaged by a range of factors (White, 1998; Skinner and Fergusson, 1998; Grayling, 1999). 4.2. Possible disadvantages The administrative costs of such a scheme might be offputting or too high. There would be proportionally small
revenue losses to the Inland Revenue but the travel voucher scheme(s) themselves would need to be administered. In the USA, administration is done on a commercial basis, but careful scrutiny of best practice in other countries would be needed to ensure that such a method of ®nancing travel vouchers was viable. This might limit travel voucher scheme take up. There is also a capacity problem. Trains and buses are already too crowded in some places at some times of day, so a scheme that encouraged further use might be unwelcome. This problem is likely to be particularly prevalent in the south-east, where many commuter trains to London are already overcrowded and it can cost ten times more than buses to upgrade services (Grayling, 1999). The ability to increase capacity is limited on the railways by track capacity and land availability, although extra investment should make further services possible (DETR, 1998). But there is scope to increase bus availability more easily and so it would seem to be reasonable to try to encourage a modal shift to buses in areas where there are greatest problems with rail and underground capacity. Thus, it might be sensible to restrict the usage of travel vouchers for the London `travel to work area' (as de®ned by the Census) to buses in the rush hour for this reason. Geographical and peak hour inequalities such as this could be partially justi®ed by different region's public transport capacities (DETR, 1997). Restricting travel vouchers in this way would be unlikely to affect the poorest in London and the south-east because they would be much more likely to already use the buses rather than trains (Grayling, 1999). This scheme might most encourage occasional new users of public transport (i.e. once or twice weekly bus trips which are shifted from cars) but might not trigger a large change in existing public transport users. Evidence from the USA shows that the introduction of travel vouchers usually has most effect on existing users of public transport, who most often increase their ridership when travel vouchers are available (Oram Associates, 1994). Experience from the USA shows that of those receiving travel vouchers from schemes run by Commuter Check in the San Francisco Bay area the biggest change was in those making 3±4 more work trips per week by public transport and 1±2 non-work trips each week by public transport. There are also, of course, potential ®scal disadvantages to travel voucher schemes. For instance, there is likely to be a loss of revenue to the Government. This would be money that would otherwise be paid as wages and so would be taxable. However, in the USA, this sum is felt to be relatively small as most of the money used by employers to pay for travel vouchers is not felt to be money that would otherwise be paid as wages. Instead, it is felt that travel vouchers are used as a `perk' and given as an additional bonus, irrespective of wage deals (Oram, 1999). For this reason, in the USA the upper limit on the amount that can be given in travel vouchers was recently removed (Commuter Check, 1999).
A. Root / Transport Policy 8 (2001) 107±114
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Table 8 Access to car by location of workplace for those living in rural areas (percentages). (Source: Cullinane and Stokes, 1998, p. 33, originally from National Travel Survey 1988±91)
London Central London Outer Conurbation centre Conurbation suburb Other urban centre Other urban suburb Not urban Not working Total
Company car main driver
Main driver of household car
Other driver
42.9 18.2
28.6 81.8 83.3 56.5 56.3 63.8 60.1 28.9 40.7
19.0
4.8
4.8
17.4 17.0 12.9 13.8 11.3 12.5
16.7 13.0 13.5 12.3 19.8 24.0 20.6
1.3 0.7 1.6 34.1 21.7
13.0 11.9 10.3 4.7 1.7 4.6
Non driver
Under 17
Percentage of all 0.6 0.3 0.2 0.7 9.3 13.6 12.8 62.2 100
A recent survey suggested that 30% of car drivers living in rural areas work in cities (Lex, 1997). Figures from the National Travel Survey offer a similar, but slightly lower ®gure of 24.7% of those living in rural areas who have access to a car and work in an urban area or conurbation (Cullinane and Stokes, 1998, p. 33 and Table 7). Their ®gures from The National Travel Survey also show that 12.8% of the rural population have access to a car and work in a rural area (op cit. and Table 8). These ®gures can be combined, to show that those who have access to a car and who live and work in rural areas and those who also have access to a car and live in a rural area but work in a non-rural area, comprise 37.5% of the total rural population. (That is, respectively, 12.8 and 24.7% of the rural population.) From this survey, a conservative `rule of thumb' ®gure would be that 19.1% of employees were felt by their employers to be likely to use travel vouchers, either occasionally or every day (Table 5). Using the ®gures given by Commuter Check (1999), then approximately 7.2% of rural residents (that is, 19.1% of 37.5% of the eligible rural population) would be likely to use tax-free vouchers for some journeys to work. In 1998 there were 12,042,000 people in the UK in registered employment (GSS, 1999, p. 86). Following commonly used OPCS de®nitions of rurality, approximately 10% of the UK population can be considered to live in rural areas (this is de®ned as settlements under 10,000 population) (op cit. p. 33). This means that approximately 1,204,200 of the employed population (10% of 12,042,000) will be living in rural areas. Thus, assuming on this evidence that 7.2% of the rural population are likely to use travel vouchers, approximately 87,000 rural residents will be likely to use them. Commuter Check evidence in the USA shows that the average (modal) value of travel vouchers given was $20 per month in 1994 (Oram Associates, 1994; IBI Group, 1999). This is equivalent to approximately 0.9% of an average US annual income of $26,980 (Phillip, 1999). The UK equivalised 16 weekly income (before housing costs) is £309
per week (DSS, 1999), thus a travel voucher to the value of 0.9% of this would be worth about £3.00. Average weekly expenditure on fares and other travel costs (excluding motoring) in 1997±98 was £8.10 (GSS, 1998, p. 69). Although the sum of £3 per week seems small, US evidence suggests that the actual value of travel vouchers makes very little difference to usage (Oram Associates, 1994). Therefore tax loss to the UK Government of introducing rural travel vouchers would be likely to be from tax free income of £3 per week to a range of 65,000±110,000 employees, allowing a 25% margin for changes in uptake. This would involve a tax-free amount of £195,000 to £333,000 annually. Assuming a 23% standard tax rate, this would mean an annual loss of between £45,000 and £76,500 tax revenue if this measure was introduced in rural areas. This is a negligible proportion of national tax revenue (ONS, 1996) and echoes Canadian research ®ndings that indicate that travel vouchers can be introduced at negligible cost (Litman, 1997). Any loss of direct revenue to the Government can be offset by environmental protection, reduction of harmful emissions, so possible reduction of health costs due to fewer respiratory diseases, cancers and accidents, 17 etc. (Acheson, 1999). There would also be savings to the economy made through less congestion and savings in terms of greater social inclusion, due to less traf®c in streets (Whitelegg, 1993). The losses in strictly ®nancial terms could be mitigated by many other factors.
16 `Equivalised' means that ®gures have been adjusted to take account of number of dependants. This ®gure excludes the income of the selfemployed.
17 For example, estimates of annual costs imposed on California by motor vehicle pollution were in the range of $0.5±$10.7 billion (Whitelegg,1993, p. 137).
5. Conclusions This survey has shown that there is limited acceptance of approximately one in ®ve employers of the idea of using travel vouchers amongst rural employers in Oxfordshire. This level of acceptance would provide a suf®ciently big pool of participating businesses to suggest that a rural and
114
A. Root / Transport Policy 8 (2001) 107±114
possibly, a national, trial travel voucher scheme is worthwhile. In the UK, our ®ndings suggest that take up of travel vouchers would be likely to be highest amongst employers with more than one base or set of premises and where the workplace is within a ®ve minute walk or a ten minute cycle ride of a railway station. Resistance, where a reason was speci®ed, is mostly due to perceptions of poor public transport provision. Those who feel that public transport provision is insuf®ciently good to make their participation worthwhile would `self select' out of the scheme. This may mean that there is more take-up in urban and suburban areas, but if introduced in conjunction with congestion charging travel vouchers might equalise the greater costs for drivers in more built-up areas. Ability to increase capacity is limited on the railways and the London Underground by track capacity and land availability, although extra investment should make further services possible. But there is scope to increase bus availability more easily and so it would seem to be reasonable to try to encourage a modal shift to buses in areas where there is greatest problems with rail and underground capacity. Thus, it would seem sensible to try to ®nd ways of encouraging travel voucher use in the big conurbations outside London, where scope for an increase in bus provision is biggest. The above exploration of the strengths, weaknesses and appeal of travel vouchers is inconclusive because of its limited rural scope. It needs further work in order to determine more about how employers and employees in nonrural locations would react to travel vouchers. Acknowledgements This research in which this article was based was cofunded by the Rural Development Commission (now part of the Countryside Agency) and the Rees Jeffreys Road Fund. My grateful thanks are due to them for the support that has made this project possible. Gratitude is also due to Dr John Preston, Sylvia Boyce and Ann Heath of the Transport Studies Unit, University of Oxford, for much on-going support and invaluable assistance. My thanks are also due to the two anonymous referees who made extremely detailed and helpful suggestions about ways to improve this article. The usual disclaimers apply. References Acheson, D., 1999. Report on Independent Inquiry into Inequalities in Health. TSO, London. Batchelor, C., 1999. Opposition hits out over plan to charge motorists. The Financial Times, 18 November , London. Bradshaw, R., Grosvenor, T., Wo®nden, D., undated. Employers' Attitudes
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