Carrots Are Good for You, and So Are Sticks

A very interesting post today on the Streetsblog Network from getDowntown, in Ann Arbor, Michigan. The getDowntown program, which aims to get more people using alternative modes of transportation through a variety of incentives and support systems, is a partnership between the Ann Arbor Area Chamber of Commerce, the Ann Arbor Transportation
Authority, the City of Ann Arbor and the Downtown Development Authority. It’s been around since 1999.

In this post, getDowntown’s Nancy Shore steps back and asks a philosophical question about the mixture of incentives and disincentives — carrots and sticks — that are necessary to get people to kick the car-commuting habit:

I’ve been conducting a commuting audit for a local organization. Currently, this organization offers free parking passes for all of their employees. As a result, all of these employees park downtown.

Given the economic times, this organization is looking at ways to cut costs, and providing $130/month for each employee for a parking space is starting to look like a lot of money.

So that’s where I come in. I’ve been chatting with each staff member and asking them what other options might work for them. Pretty much every staff member knows what his/her options are, from using the Park & Ride Lots to biking to work to carpooling to telecommuting. And it’s clear to me that if this organization stopped paying for parking, many of the staff would use one of those other options rather than pay for parking themselves.

Here is a case where a stick would work to change behavior. We saw the same thing with gas prices. No one likes to lose something, especially when it feels like a pay cut. And for some staff it is just easier to park at a park and ride everyday and take the bus to work than others. If that’s the case, should everyone get the same stick, or only some people?

At the same time, the getDowntown Program offers lots of carrots to try to get people to change their commuting behavior. We have a huge carrot known as the go!pass, that gives employees unlimited rides on the buses, including to park and ride lots in addition to other incentives.  But those carrots only work if there isn’t also a chocolate cupcake (such as employer paid parking) on the plate.  In addition, our carrots are only as effective as the bus service, or the bike lanes. If the buses don’t run frequently enough or the bike lanes are poorly maintained, our carrot becomes less and less appealing.

The reason I am troubled by all of this is that people see sticks as bad. Our society sees restrictions as bad. We are all about freedom of choice. I think that’s why carrots are so appealing. But my carrot will only work if there isn’t a better incentive out there.

We’d like to hear about how other communities are handling the mixture of incentives and disincentives. Any other creative solutions out there?

More from around the network: The Dirt looks at the economic value of parks. The Infrastructurist examines Portland’s McMansion-style bridge proposal. And The Political Environment rips into Milwaukee’s massive Zoo Interchange highway expansion project.

  • Rather than calling biking and walking “alternative modes of transportation,” how about “other?” It makes them sound more mainstream and normal.

  • Josh

    Carrots taste a lot better than sticks, though.

  • To discourage an activity — car-commuting in this case — it’s always more efficient to raise its price than to subsidize possible alternatives.

    In the Ann Arbor situation, it’s the negative activity that is subsidized, so it should be simple to raise its price: just remove the parking subsidy.

    The resulting upset can be mitigated and, I would bet, overcome, by ensuring that the subsidy “pie” is distributed equally to all employees (and not just to those who have been availing themselves of the subsidy).

    This is a form of Don Shoup’s “cashing out free parking,” of course. I wrote about it several years ago in an op-ed concerning Microsoft. Here’s the link.

    By the way, the general principle I stated at the top — that sticks are more essential than carrots — explains why a carbon tax would be far more effective at reducing CO2 emissions than, say, subsidizing renewable (non-carbon) energy.

  • This needs a Cost Benefit Analysis: what’s cost difference is for an employer to give their employees GOpasses vs. paying for parking, factor in other benefits (stress, vibrant streets etc…) and then see where to apply sticks and carrots.

  • J:Lai

    Charles komanoff:

    you are correct with the exception of your 3rd paragraph. While those who haven’t been recieving the free parking benefit would probably concur that it is an excellent idea, those who have would legitimitely view it as the loss of a valuable benefit. The difficulty of limiting parking permits to public service employees in New York is a perfect example of how difficult it is to eliminate this type of benefit.

  • Lucy

    Why is it considered a punishment (stick)when people are expected to pay for what they use?

  • Nations with high rates of transit use have two things in common: high gas prices and high-quality rail service, including high-speed rail, conventional rail, suburban rail, and light rail.

  • That’s not entirely true, Mark. Some nations with high transit use just have populations too poor to afford cars or gas. Of course, there, the commuting experience is nowhere near as pleasant as in countries with good transit.

  • It’s time to move on from the carrot/stick metaphor. NYC’s first congestion pricing attempt boasted of having both, and all we got for it was an entitled minority wailing into microphones about being penalized. Opposition rallied around the declared motivation for the fee more than the fee itself—quite reasonably, as so few people would have been significantly affected. But who wants to admit to having been “bad” today, yesterday, and for many years before that? Who wants to be likened to a donkey, for that matter?

    Which makes me think that instead of “Let’s improve human behavior with carrots and sticks” we should stick to practical and economic terms. It’s not about changing any one person’s behavior. It’s about closing actual budget deficits and raising our surface transportation to some measure of efficiency. People can decide for themselves if they’re feeling “discouraged” from driving or rather “liberated” from traffic. I don’t care if anyone feels guilty or not, I just want to have safer, cleaner streets and transit that works.

    In other words: what Lucy said.

  • If my job installed pay toilets and then my boss circulated a memo that referenced rising city sewerage charges and the need to “pay for what we use,” I would think of it as a cut in benefits, and as her employee, I would be appalled at her inability to stand up for her workers.

    So what if I could use the toilet at home in the morning before I left the house.

  • One of the many differences between real life and this bizarre hypothetical is that everyone uses, and must use, the toilet.

  • garyg

    Mark Walker,

    Nations with high rates of transit use have two things in common: high gas prices and high-quality rail service, including high-speed rail, conventional rail, suburban rail, and light rail.

    No. The only nations with high rates of transit use are those that are either too poor for mass ownership of private automobiles or too constrained by geography for mass use of private automobiles. Few people will choose transit where driving is an affordable and practical alternative.

  • Few people will choose transit where driving is an affordable and practical alternative.

    No, few people will choose transit when the government spends massive amounts of money on huge incentives for them to own and drive private cars. Not the same thing.

  • Nathan, the point of the “bizarre hypothetical” was to move the discussion back from airy pronouncements on the utility of “safer, cleaner streets” to what the original post said:

    Given the economic times, this organization is looking at ways to cut costs, and providing $130/month for each employee for a parking space is starting to look like a lot of money.

    If the organization cuts out benefits that some fraction of the workforce finds essential, probably some workers will get demotivated and some others will look for work elsewhere. That costs the organization money, probably more than the $130 a month parking bill. If it’s your organization, those are decisions that you have to make.

  • If the organization cuts out benefits that some fraction of the workforce finds essential, probably some workers will get demotivated and some others will look for work elsewhere.

    That’s easy to fix: adjust other things so that the overall compensation remains unchanged. The most straightforward is if they get the cost of the parking in the form of cash, which could be spent on parking or something else.

  • gargyg

    few people will choose transit when the government spends massive amounts of money on huge incentives for them to own and drive private cars.

    Fortunately, governments don’t have to spend massive amounts of money on huge incentives for people to own and drive cars for driving to be an affordable and practical alternative to transit. That’s why driving is the overwhelmingly dominant form of transportation in virtually all wealthy democracies.

    In contrast, governments DO have to spend massive amounts of money on huge incentives for people to use transit, just to achieve very low levels of ridership. Without those huge government incentives, transit ridership would be even lower.

  • In contrast, governments DO have to spend massive amounts of money on huge incentives for people to use transit, just to achieve very low levels of ridership.

    Actually, they don’t. They just have to not spend massive amounts of money subsidizing private car use. But thanks for playing, Garyg!

  • garyg

    Transit fares cover only about 28 cents of every dollar of transit spending. The rest is subsidies. Transit users pay only about one-quarter of the costs of providing them with the transit services they use. And yet even with that huge economic incentive to use transit, it accounts for less than 2% of all motorized travel in the United States.

  • Transit fares cover only about 28 cents of every dollar of transit spending.

    Except in parts of New Jersey, where they cover 104 cents of every dollar.

  • garyg

    Well done then, “parts of New Jersey.”

  • Thanks everyone for your insightful comments. In terms of what I am recommending for this organization, I will probably recommend that they get rid of some spaces and try to flex the rest with a combination of people using Park and Rides and telecommuting to make it all work. We also have Zipcars so that should make things easier.

    What this exercise has really taught me is that there is a vicious spiral when you pay for employee parking. Many of these employees live really far away so using the bus really isn’t an option and the Park and Ride works but isn’t ideal. One wonders if this org never paid for employee parking if people who applied for the jobs would try to find ways to work closer. But since Ann Arbor is relatively affluent, I am not sure it’s reasonable to believe that everyone could afford to live here.

    That being said, I think that providing free employee parking at the employers expense is an old model that is slowly changing. But that transition is going to be painful and for awhile is going to cause some people to be inconvenienced. But I have to say, for most people that’s what it is: an inconvenience. I wish we lived in a less entitled society where it was the norm to give up a little for the sake of others (or the planet or the community) because I also see that people feel like they should be guaranteed a parking space right next to where they work even if they work in a downtown urban setting. This is the reality of people’s perception, and it will take time to change those perceptions. But I do see the shift happening, little by little.

  • harrybrowne

    Cap’n, garyg is more correct than you.

    Government is (supposed to be) BY THE PEOPLE. Given a fixed level of transportation dollars sufficient to subsidize private transit or public transit, but not both, a society of means overwhelmingly chooses private.

    The most common criterion among nations with high rates of public transit use is a high population density. The best the US can hope for is high public transit use in large cities–approximately 400,000+–something that is in place already. Ann Arbor doesn’t fit the bill–it’s the most PC city in Michigan, trying to force an uneconomic (for them) system in place for ideological reasons.

    In US cities with high public transit usage, the common denominator is unaffordable (not merely expensive) parking for the masses. While not inexpensive, $130 a month doesn’t fit that bill, either.

    Unless and until most commercial deliveries can be accomplished by rail (a spur on every block), the physical infrastructure to support rail is prohibitively expensive and unnecessarily duplicative in all but densely populated urban areas.

    When public transit makes economic sense, you don’t need either carrots or sticks.

  • Harry Browne? I thought you died three years ago. Hey, it’s always nice to be told by some random stranger that the troll is more correct than me!

    Government is (supposed to be) BY THE PEOPLE. Given a fixed level of transportation dollars sufficient to subsidize private transit or public transit, but not both, a society of means overwhelmingly chooses private.

    You assume that they’re adequately informed about all the consequences of “private transit”: unwalkable neighborhoods, carnage, obesity, asthma, global warming, other kinds of pollution, oil wars, resource depletion, long commutes. Even a lot of sustainable transportation advocates have trouble keeping all of these in mind at the same time.

    In any case, I thought that Shore’s addition of the cupcake to the carrot-stick metaphor was brilliant, and completely rescued the metaphor and made it relevant again. How can you motivate a donkey with carrots if there’s a guy with sugar lumps luring it off course?

  • J. Mork

    harrybrowne:

    If “private” transport is subsidized by the public, doesn’t that make it just as public as “public” transport?

  • “If the organization cuts out benefits that some fraction of the workforce finds essential, probably some workers will get demotivated and some others will look for work elsewhere. That costs the organization money, probably more than the $130 a month parking bill. If it’s your organization, those are decisions that you have to make.”

    If it’s your job, those are decisions that you have to make. The cost of finding another job may be greater to the employee than a $130 parking bill if they continue to drive alone, a $65 bill if they carpool, or a bus bass if they take transit, or whatever arrangements people come up with. They can be quite creative when given the choice of paying for a parking space, instead of their employer deciding that they will pay collectively out of their potential salaries. (Too airy?)

  • harrybrowne

    Why, Cap’n, should either of us assume they aren’t adequately informed? Is it not possible that many ARE informed, and choose different than you anyway because their values are different than yours? I don’t know their motivation, just their choice. It is entirely possible that informed people choose private transportation anyway because the benefits outweigh the detriments.

    And attibuting long commutes and obesity to private transit? Oh, please. For the majority of the country that does not live in densely populated urban areas, public transit lengthens, not shortens, commutes. While admittedly merely anecdotal, my observations of passengers when I do use public transit certainly don’t indicate public transit is a cure for obesity.

    I read your blog. You seem to me (and I allow for the possibility that my inference is wrong) to hold the opinion that it’s bad for a private party to use its own money to offer “cupcakes” in support of private transit (i.e., employer-paid parking), but good for a public party to use tax dollars to offer “cupcakes” in support of public transit (i.e., fare-free bus rides). If Ann Arbor is so against cupcakes, its DDA shouldn’t have built a bakery downtown in the form of a new parking garage with hundreds of theretofore non-existent spaces.

    In the case of the Ann Arbor employer, “adjust(ing) other things so that the overall compensation remains unchanged…” won’t do a thing to achieve the stated goal of cost-cutting.

    This is a cheese-and-chalk comparison anyhow. Ann Arbor, MI is not New York. It’s barely even a neghborhood in New York. What is economically feasible in New York is fiscal suicide in Ann Arbor.

    While their exists in this country a 5% in rabid favor of all things communal (at least to the extent that they can convince legislative bodies to force unwilling majorities to foot the bill), the majority desires private over communal arrangements in nearly everything–certainly in housing and transportation–and chooses thus when economically feasible.

    Mass transit developed in other countries in response to conditions that didn’t, and don’t, exist in most of the US. The push to re-create such a system, certainly in Ann Arbor, is a solution in search of a problem.

    Economics is the art of allocating scarce resources–in this instance, capital–among competing interests.

    Government is the science of telling people the economic choices they make are “wrong”, and that intelligent choices are the sole province of people whose paychecks are funded by tax dollars.

  • While admittedly merely anecdotal, my observations of passengers when I do use public transit certainly don’t indicate public transit is a cure for obesity.

    Well, maybe instead of relying on your own self-reinforcing prejudices you should read some studies.

    I read your blog. You seem to me (and I allow for the possibility that my inference is wrong) to hold the opinion that it’s bad for a private party to use its own money to offer “cupcakes” in support of private transit (i.e., employer-paid parking), but good for a public party to use tax dollars to offer “cupcakes” in support of public transit (i.e., fare-free bus rides). If Ann Arbor is so against cupcakes, its DDA shouldn’t have built a bakery downtown in the form of a new parking garage with hundreds of theretofore non-existent spaces.

    Well, yes, it’s bad for anyone, public, or private, to give incentives to drive because private cars are bad, for all the reasons I’ve stated. That includes the Ann Arbor parking garage. And I don’t know if donkeys even eat cupcakes, which is why I talked about sugar lumps instead.

    In any case, if a person gets killed by a car, they’re just as dead whether the driver was acting on the incentive of a “public party” or a private one.

  • Nathan, the IRS includes both employer-paid and employee-paid parking as Qualified Transportation Fringe Benefits, which are not taxed (The $20 a month for bicycle repairs is also a QTFB, for what it’s worth). So if your company converted the parking benefit into a $130 raise, the employees could just take the $130 and pay for the parking themselves, or bank the money and take the bus to work. As you note, folks can be quite creative in that respect.

    But if you just take the $130 benefit away from a worker who’s earning $40,000, that’s a 4% pay cut, and there are consequences for retention and productivity to that decision.

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