Effectively Managing Consumer Fuel Price Driven Transit Demand

(Center Identification Number: 77944)

Principal Investigator:

Justin Begley, Senior Research Associate

Phone: 813-974-1484
E-mail: begley@cutr.usf.edu
Fax: 813-974-5168
Center for Urban Transportation Research
University of South Florida

External Project Contact:

Erin Schepers
Florida TRIPS Manager, Florida Department of Transportation
erin.schepers@dot.state.fl.us
Phone: 850-414-4526

I.  Project Objective/Problem Statement/Background

In July 2008, retail gas prices peaked at an all-time high above $4.00 per gallon of unleaded gasoline.  This peak and the escalation in prices leading up to it, reportedly led to an increased demand for services from public transportation providers.  Because these thresholds of gas prices were being broken at never seen before levels, many transit agencies were discovering for the first time which of their services experienced an increased burden and wherever possible, they reactively adjusted service levels to accommodate this demand.  The following economic downturn and eventual drop in gas prices led to decreases in demand that followed shortly thereafter.

APTA conducted a survey in mid-2008 titled ‘Rising Fuel Costs:  Impacts on Transit Ridership and Agency Operations’ which sought to describe how public transportation providers were dealing with the gas price driven increases in ridership.

  • 86% of transit agencies reported ridership increases that coincided with rising fuel prices
  • 63% of transit agencies experienced capacity constraints during peak periods
  • 49% of transit agencies experienced capacity constraints primarily on short segments of high ridership routes
  • 54% of transit agencies reported crowding beyond local service standards
  • 39% of transit agencies reported the turning away of passengers

 

A variety of actions were employed to manage this demand once the escalation in gas prices had begun.  The reaction to events already unfolding puts transit agencies behind the curve in preserving ridership and user satisfaction.  Therefore, there is value in developing strategies to maximize ridership potential and customer satisfaction through periods of increasing gas price driven transit demand.

II. Objectives/Tasks

The purpose of this project is to identify fuel price sensitive demographics and transit system services, as well as to provide strategies for transit agencies to cope with associated demand fluctuations.  The project objectives are:

  • Conduct a literature review of existing research indicating a causal relationship between an increase in consumer fuel prices and transit demand.  Summarize a range of elasticities that have been documented in other studies.
  • Identify demographic profiles and environmental conditions which may lead to more public transit use as gas prices increase, both in generating new transit users and increasing transit use by existing customers.
  • Conduct a web-based survey of Florida’s transit agencies, determining if fluctuations in transit demand coincide with the volatility in fuel prices.  Work with two transit agencies in more depth within these parameters.
  • Discover potential stress points in a transit agency’s family of services that are more likely to experience greater demand in times of rising fuel prices.
  • Provide strategies that give transit providers ways to maximize ridership potential, best allocate resources and preserve customer satisfaction in times of increased demand driven by higher consumer gas prices.

 

The proposed scope of services for this project consists of the following tasks.

Task 1 – Conduct Literature Review

The research team will conduct a thorough literature review to investigate the effects of gas prices on transit use. This task will summarize a range of elasticities reported across several studies that attribute increased transit use to rising retail fuel costs. Recent publications from the Congressional Budget Office (CBO) and Federal Highway Administration (FHWA) address this relationship.  Also, in recent years several municipal case studies have been published for reference to isolate regional geographic factors of influence.

Task 2 – Identify Demographic and Environmental Conditions that Influence Transit Demand in Times of Rising Fuel Prices

From the literature review, the research team will identify several demographic and external conditions that may lead to a trip to be taken on transit even when a personal automobile may be available as an alternative.  These may include personal income level, trip type, employment, accessibility to public transportation and directness of the transit trip.  These factors, where available, will be geographically represented with GIS mapping in the Greater Tampa and Fort Lauderdale, FL areas.  These regions will receive a greater depth of analysis in the following tasks.

Task 3 – Conduct a Survey of Florida Transit Agencies and In-Depth Review of Two Service Providers

A web-based survey will be created and administered with a target audience of transit operators and planners in the state of Florida.  The survey will request this audience to answer questions about whether increased service demand has been observed in times of rising gas prices, and if so, across which services (local bus, flex bus, express services, paratransit, rail, as examples) and how service levels and management plans were adjusted accordingly to address this demand.  Route and stop level ridership data since 2008 will be obtained from HART and Broward County Transit for analysis to assess ridership fluctuations both retrospectively and spatially.

Task 4 – Discover Stress Points in a Transit Agency’s Family of Services

The objective of this task is to collectively review findings in the literature review, survey results and in-depth agency analyses to identify which transit service types may be more likely to experience greater demand in times of rising gas prices.  For example, peak hour limited stop express routes from suburban residential areas to employment centers may have increased transit demand during these times.

Task 5 – Develop Strategies for Coping with Gas Price Driven Transit Demand

This task will build upon the findings in the previous tasks and provide strategies with associated actions that transit providers both have and could use to proactively address fuel price driven transit demand.  The purpose of this task to provide research that can be applied to maximize transit ridership and preserve customer satisfaction at the agency level.

Task 6 – Summarize Findings and Deliver Draft Final Report

The final task of the research will summarize the results of the previous tasks in a final report. The report will be designed in a clear and concise summary format that will facilitate easy reading and application by FDOT project managers and public transit professionals.

The draft final report will be edited for grammar, clarity, organization, and readability by the director of the National Center for Transit Research prior to submission to the Department for technical approval. The editor providing the review will sign a cover sheet attesting to such review prior to submission. The provision for editorial services will be the Principal Investigator’s responsibility (the author or a designated party may perform the review). A well-written, high-quality report will be submitted. The only changes allowable between the draft final report and the final report will be those changes requested by the Project Manager and the Research Center. CUTR will coordinate the project with the project manager to ensure that the scope and activities are consistent with Florida DOT’s Public Transit Office’s goals and objectives.

Work not included in this scope of service is not to be performed and will not be subject to compensation by the Department.

III. Deliverables

Project Kickoff Meeting

Upon project execution, the CUTR principal investigator will coordinate a kick-off meeting with the FDOT project manager and prepare an agenda and participant invitation list. This kick-off meeting shall be scheduled to occur within the first 30 days of execution by the university. The preferred method for the kick-off meeting is via teleconference or video conference.  As a minimum, the project manager and the principal investigator will attend.   The Research Center staff must be advised of the meeting and given the option to attend.  Other parties may be invited, as appropriate. The subject of the meeting will be to review and discuss the project’s tasks, schedule, milestones, deliverables, reporting requirements, and deployment plan.  A summary of the kick-off meeting shall be included in the first progress report.

Quarterly Progress Reports   CUTR will submit quarterly progress reports to the FDOT Research Center.   The first report will cover the activity that occurred in the 90 days following the issuance of the task work order.  Reports should be submitted within 30 days of the end of the reporting period.  Reports are due even if little or no progress has occurred (in which case, the report should explain delays and/or lack of progress).  Progress reports will be sent in MS Word format to Sandra Bell, sandra.bell@dot.state.fl.us.

Progress reports must include the following information:

  1. Contract number, task work order number, and title
  2. Work performed during the period being reported
  3. Work to be performed in the following period
  4. Anticipated modifications (i.e., to funding, schedule, or scope).
  5. A progress schedule updated to reflect activities for the period being reported.

 

*To effectively track the project-related emails, the project contract number and title are required in the subject of the email to FDOT Project Managers. Failure to submit progress reports in a timely manner may result in termination of the work order.

Draft Final Report    The Draft Final Report is due 90 days prior to the end date of the task work order.  The draft final report will be submitted to Sandra Bell, sandra.bell@dot.state.fl.us.  It will be edited for technical accuracy, grammar, clarity, organization, and format prior to submission to the Department for technical approval.  The Draft final report shall be prepared in accordance with the “Guidelines for Preparing Draft Final and Final Reports” posted at http://www.dot.state.fl.us/research%2Dcenter/Program_Information/Guidelines%20for%20Preparing%20a%20Final%20Report%2012-07.pdf.

Closeout Meeting – A closeout meeting shall be scheduled to occur within the final 30 days of the project.  The purpose of the closeout meeting is to conduct a project performance review, discuss the deployment plan, and next steps.  Attendees shall include, as a minimum, the project manager, the principal investigator, and the Research Center performance coordinator.

Final Report   Once the draft final report has been approved, the university shall prepare the final report.  The university will deliver a minimum eight (8) copies on CD or DVD – seven (7) CDs should contain the final report in PDF format, one (1) CD should contain the final report in PDF format, MS Word format and a Summary of the Final Report. The CD/DVDs should be labeled in a professional manner and include at a minimum the contract number, task work order number, project title and date.

The final report is due no later than the end date of the task work order and should be delivered to the following address:

The Florida Department of Transportation

Research Center, MS 30

605 Suwannee Street

Tallahassee, FL 32399-0450

IV. Project Schedule

Start Date:  January 2012               Expected End Date: July 2013

V. Project Budget

Total Lump Sum Amount (Salaries and Benefits)              $74,998.62

Cost Reimbursable Subtotal                                                            $0.00

Indirect Cost (subtotal x 10%)                                                           $0.00

Total Project Cost                                                                      $74,998.62

VI. Equipment

No equipment is anticipated nor requested for the completion of this study.

VII. Travel

No travel is anticipated for this project. All travel shall be in accordance with Section 112.061, Florida Statutes. FDOT employees may not travel on research contracts.

VIII. Personnel

This project will be managed by Justin Begley, with direction provided by Rob Gregg, both of the CUTR Transit Management and Innovation team. The remainder of assigned staff will include Mark Mistretta, Research Associate, Melissa DeLeon, Research Assistant and Brian Warren, Undergraduate Student. Graduate student Christopher Cochran will provide GIS mapping support.

 

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