Colorado emerging mobility impact study
The study
The Colorado Department of Transportation (CDOT) and Colorado Energy Office recently concluded an in-depth study and analysis of transportation and mobility solutions in the State. Specifically, the 2019 Emerging Mobility Impact Study (the Study) is designed to assist Colorado lawmakers, regulators and industry participants with “develop[ing] methods to manage and reduce overall transportation demand on [Colorado’s] transportation network, and to encourage a shift from polluting gasoline and diesel vehicles to zero emission vehicles (ZEV), such as electric vehicles (EV).”[1] Importantly, the Study relies on numerous academic resources, studies, facts and figures.
While broad in scope and expansive in research, the Study focuses on predicted future impact and growth of vehicle miles traveled (VMT) as derived from six separate and distinct types of commercial transportation and mobility: transportation network companies (TNCs), taxis, peer-to-peer car sharing, fleet-based car sharing, rental car and residential delivery. The Study also explores numerous different tax/fee structures designed to reduce VMT and incentivize the investment in – and application of – ZEVs and EVs in Colorado’s transportation and mobility space.
Peer-to-peer car sharing v. other types of mobility in Colorado
The Study reflects many differences between peer-to-peer car sharing and the other transportation solutions, not the least of which is the massive disparity in VMT and environmental impact as measured by emissions. The Study employs an estimate of 1,800 to 2,700 VMT per day and one short ton per day of CO2e (carbon dioxide equivalents) for peer-to-peer car sharing in 2018.[2] This figure contrasts starkly with the VMT/impact figures for the other types of transportation and mobility providers:
· Rental car – 3.1 million daily VMT and 1,423 short tons per day of CO2e[3]
· TNC – 750,000 daily VMT and 335 short tons per day of CO2e[4]
· Taxi – 53,000 daily VMT and 24 short tons per day of CO2e[5]
· Fleet/commercial car share – 12,800 daily VMT and six short tons per day of CO2e[6]
These estimates illustrate just how unique of an impact these vastly different types of transportation and mobility have on Colorado’s environment and infrastructure resources. On one end of the impact spectrum, peer-to-peer car sharing is currently estimated to result in 2,700 VMT per day. On the other end, the Study estimates that rental car companies are responsible for more than 3 million (million!) driven miles per day – times that figure by 365 and we see that rental car companies are estimated to be responsible for over 1.1 billion driven miles per year in Colorado.[7] That is more than 1,116x the VMT of peer-to-peer car sharing.
Fee structures
The Study explores a number of different tax/fee structures applied to Colorado’s commercial transportation activity with the intent of curbing VMT and reducing negative impacts on Colorado’s environment. Without getting too technical, the Study was conscious of the fact that different goods and services respond differently to taxation.[8] This demand-side effect is called the “elasticity of demand.” Basically, there are certain goods and services that people will buy/consume out of necessity or compulsion no matter the tax/fee levied on that good or service (with some ultimate upward cost ceiling). This type of demand is considered to be “inelastic,” i.e. demand won’t shrink or change as much as a more “elastic” demand under the same amount of pressure (tax).
The Study employs a “constant” elasticity factor across all six different types of transportation and mobility because “there is not enough data in the literature or from the Colorado market to estimate a full demand curve for emerging modes.”[9] However, it is extremely important to note that the Study recognized differing real-world elasticities of demand between the distinct types of transportation and mobility. Relying on numerous academic resources, the Study suggested that rental car transactions seem to enjoy “relatively inelastic” demand, especially at airports (factors as low as -.07 at Denver International Airport). [10] In stark contrast to rental car demand elasticity, studies that exist on car sharing suggest relatively much lower inelasticity (factors of -.85 to -1.4) and more responsive demand.[11]
This means that, dollar-for-dollar, or “net-net,” any amount of taxation will more negatively impact (i.e. lower) demand for car sharing as compared to rental car transactions (due to rental car’s more inelastic demand). Rental car companies know this, and they want to use this economic phenomenon to their advantage.
Conclusion
The massive difference in both impact (VMT and emissions) and demand elasticity between peer-to-peer car sharing and other kinds of transportation and mobility as illustrated in CDOT’s 2019 Emerging Mobility Impact Study is indicative of just how unique peer-to-peer car sharing is. We are talking about personal cars, here; personal cars that belong to men and women, moms and dads, students, first responders and teachers – not massive, corporately-owned fleets of vehicles. The same goes for our wonderful community of Turo Guests. Our Guests book cars on Turo not because they need a “rental car” – but because of the exact opposite: they do not need a rental car. They need a local car, a neighbor’s car, a friend’s car, a special car. This “demand” is different than rental car demand – different demand elasticity, different impact, different use, different mobility.
In 2020, please continue to stay up-to-date with OpenRoad and join us advocating for peer-to-peer car sharing; help us push back against the continued rental car assault on Turo Hosts and Guests; help us make 2020 the best year yet for peer-to-peer car sharing.
[1] 2019 Emerging Mobility Impact Study Report on Colorado Senate Bill 19-239. Executive Summary, ES-1. November 2019. Available online at https://www.codot.gov/library/studies/emerging-mobility-impact-study/emis-documents/2019-emis-report.pdf.
[2] Id. at Transportation Impact Analysis, 4-8.
[3] Id. at 4-10.
[4] Id. at 4-6.
[5] Id. at 4-9.
[6] Id. at 4-6.