The transit industry is becoming aware that it must adapt to the culture and demands of a new generation of riders. Not only must it serve its traditional riders, and serve them well, it must attract those whose connections to the world begin and end with the Internet, and whose idea of waiting time is "right now". The Transit Cooperative Research Program has initiated a project called "New Paradigms in Transit". The project, primed by Cambridge Systematics has a number of UTRC colleagues associated with it. The research asks the question, "If transit knows that it must look different in just a few years, but is constrained by a number of practices, regulations and operating assumptions, how can it change"? The answers are to be found in the ability to integrate new technologies, bring into play new operating procedures, stimulate new labor-management relationships, and, of greatest importance, stimulate change in the very institutions that support and operate these systems today.

We already have a few examples of some shifts. In New York, the MTA has adopted electronic fare cards, and made them successful by redesigning its fare policies. This is a combination of integrating new technologies with operating changes. The results have been an increase in daily ridership of 400,000. In upstate New York, the Niagara Frontier Transportation Authority has proposed a complete restructuring of its service - primarily fixed route to become more of a mobility manager. This is an example of organizational change. And Vancouver has put in place a new regional transportation governance structure to address multi modal decision making, land use and the environment in one body - a strong example of institutional change.

Taken together, these are strong evidence that there is not only strong life left in the transit business, but that transit leaders are going to play an aggressive role in shaping our urban futures.
 
 

Commuter Choice: Turning Legislation into Action

 On November 4th, over 78 representatives from business organizations, transit agencies, transportation management associations and organizations, government agencies and other institutions from across the tri-state region attended a workshop to discuss how the Commuter Choice tax benefits contained in Section 9010 of the Transportation Equity Act for the 21st Century (TEA-21) could be turned into action.  This workshop was sponsored by the Metropolitan Mobility Network of the Tri-State Region (a consortium of Metropolitan Planning Organizations and Transportation Management Agencies/Organizations), the University Transportation Research Center, the Rutgers University Transportation Policy Institute, and the New York, New Jersey, and Connecticut Chapters of the Association for Commuter Transportation.

 Expert panelists explained the new Federal tax provisions, including the implications for parking management.  TEA-21 affects the way in which transportation benefits can be offered and used, giving these benefits the same tax treatment as parking benefits (under the Taxpayer Relief Act of 1997).   Transportation benefits can be provided by employers to employee for transit use and participation in car and vanpools.

 A key provision of TEA-21 involves parking management.  Under the new law employers may offer employees the choice between free/partially subsidized parking space or the money equivalent to the out-of-pocket cost of the space.  In his presentation, Michael Kodama of Kodama Consultants indicated that barriers such as perceptions and attitudes, pricing, land-use policies and worksite characteristics (such as lease arrangements) can be overcome by using tax incentives to encourage cash-out, education and creating customized programs.  The integration of regional and local perspectives and policy changes that help employers understand the cost of parking are important.

 Besides discussing the tax provisions in detail, the workshop reviewed commute alternative programs currently operating in the region, including New Jersey's Smart Moves for Business Program, New Jersey Transit's Business Pass and Vanpool Programs, Connecticut DOT's Incentive Programs, Westchester County DOT's Smart Commute Program and the Yale University Employee Parking Program.   The new legislation brings fresh challenges to these and future programs that could encourage commute alternatives.

 The workshop also identified a number of barriers to implementation of the new legislation.  Amongst those issues were, reaching out to the right people at worksites with a comprehensible message, finding the right marketing opportunities, ensuring that everyone understands what's in it for them, simplifying the administration and distribution of instruments that facilitate transit vouchers, the ability of transit providers to provide new/additional services, simplified fare structures, peoples' attitudes, inadequacy of transit services in suburban and rural areas.

 Workshop participants suggested a number of strategies to overcome these challenges.   There is need for a comprehensive marketing plan, clearly identifying the benefits (and costs) of providing commute alternatives under this new law.   Outreach/education of employers, employees, local officials, unions, professional associations, is necessary.  It is important that everyone understands the potential for comprehensive commute benefits for themselves, employees, and members, and be aware of the accessibility of transit services.  Outreach and education of legislators is critical, because local and state, including parking-related zoning practices need to be re-examined.  As happens in Connecticut political leaders and governmental agencies can follow their own lead and so provide visibility to commute-benefits choices.  It is important that transit providers buy in to the process as in some instances commute benefits may be dependent on innovative transit services, especially for suburban and rural worksites.

 A synergy of actions may provide the desired results, and the workshop sponsors will closely examine the suggestions made.  Turning this new legislation into action will not be easy,  but exploitation of the full menu of commute benefits provided, could only benefit the entire region.
 

In two recent papers, Professor Jose Holguin-Veras, derived formulae to
calculate the optimal prices that should be charged to users of priority
systems, such that the capacity constraint at container terminals are not
violated. The solutions he found extend price differentiation theory in a
number of different ways. First, they confirmed the initial assumption
about the importance of considering opportunity costs. Furthermore, it is
found that optimal prices depend not only on the unit opportunity costs,
but on their elasticities. The explicit consideration of the role of the
capacity constraint upon optimal prices is another contribution of his
research. The models he found represent more general and powerful
versions of the original models, developed in 1927 by Frank Ramsey.

From the practical standpoint, these models represent a step forward
with respect to the techniques currently in use. In the pricing rules that
are being used, the cost of operating the storage yard (plus a fraction of
the fixed cost and a profit margin) is allocated among the different
storage technologies as a function of their unit operational costs and the
number of containers using each technology. As demonstrated in this
research, the optimal prices are a function, not only of the operational
costs, but of the logistic opportunity costs (and the corresponding
elasticities) and the capacity constraint. More importantly, the nature of
the contribution of each of these components depends on the pricing
rule. Since the traditional approach, based on accounting techniques,
only take operational costs into consideration, the set of prices it
provides is not likely to be consistent with the objectives of the pricing
policy. Using the framework developed in this research, the consistency
of the yard allocation and storage prices with the objectives of the
pricing rule is guaranteed.

See:

    Holguin-Veras, J. and Jara-Diaz, S. Optimal Space Allocation
    and Pricing for Priority Service at Container Ports.
    Forthcoming in Transport Research Part B.
    Holguin-Veras, J. and Jara-Diaz, S. Practical Implications of Optimal Space
    Allocation and Pricing, in Ports' 98, Vol 1, pp. 89-97, Michael Kraman,
    ed. March 1998. ISBN 0-7844-0329-5