Road Transportation
Background
Road Conditions and Traffic Congestion
Vehicles
Delivery
Customer Use of Roads/Parking
Employee Use of Roads/Parking
a. Public Transportation
b. Telecommuting
c. Owner Commuting
Roads and Business Location
Final Comments
Background
The transportation infrastructure of the United States is not usually associated with small-business interests. Yet, small business, as all commerce, is intrinsically linked to the web of streets, roads and highways over which goods and people flow. Transportation, of course, is not synonymous with surface transportation let alone streets, roads and highways. But driving or street/road/highway transportation is the most critical direct means of transportation for small-business owners, employees, and customers. It is also an aspect of transportation over which they exercise some control through scheduling, vehicle purchases, etc. In addition, the large fleet of vehicles that small-business owners operate generates substantial tax revenues that help fund this portion of the nation’s infrastructure. Small-business owners are eager that these user fees, primarily fuel taxes, are employed for purposes that make street/road/highway transit easier, quicker, and safer. The condition, including traffic congestion, and financing of roads is, therefore, important to small business. As a result, this issue of the National Small Business Poll is devoted to Road Transportation.
back to top
Road Conditions and Traffic Congestion
Small-business owners are generally pleased with the condition of roads in the area(s) in which they do business. Eighty-seven (87) percent rate them at least satisfactory (Q#18). But 14 percent call them excellent and another 37 percent say they are good. Just 5 percent classify this type of infrastructure as poor, though another 7 percent believe that road conditions in their area are not good. While an overall assessment may belie spots where conditions lie outside the norm, these marks are among the best small-business owners would give to any governmental activity.
A persistent theme throughout this report is the notable differences between the transportation assessments and situations of owners of businesses in urban and rural areas. Those in the most urban areas are the most critical of road conditions. Still, 78 percent of small-business owners in those areas assess the roads as in satisfactory condition or better. (For current purposes, zip codes are divided into five groups based on population density. The 20 percent living in the most densely populated create the most urban group, etc.)
The view of traffic congestion is less positive. While congestion is usually in the eye of the beholder, 12 percent say that traffic is congested much of the time in the area(s) where they do business (Q#19). Another 16 percent report it heavy for a total of 28 percent who provide a negative assessment. Yet, a larger share report traffic free-flowing or light (36%).
A large share of the differential is an urban-rural phenomenon. For example, 32 percent of owners in the most population-dense zip codes term traffic congested while 30 percent in the least population-dense zip codes term it light. Still, the proportion at both extremes of population density who describe traffic as occasional backups is similar.
Asked to choose between traffic congestion and condition of the roads as the more important problem in the area(s) they do business, small-business owners most frequently opt for a third choice. They volunteer that neither road conditions nor traffic congestion is a problem. Forty-four (44) percent say neither, while traffic congestion generates 37 percent of small-business owner responses, road conditions 14 percent, and 4 percent volunteer that both are (Q#20).
Here, too, the population density of the area in which a business is located shapes an owner’s response. But small-businessmen and women in the most urban areas seem relatively less concerned with traffic congestion than those in the second tier of population density. The former select traffic congestion over neither congestion nor road conditions as a problem by a 46 percent to 37 percent margin compared to the latter who select congestion by a 54 percent to 26 percent margin over neither as a problem. Only in the least dense one-tenth of the country are road conditions termed a more serious transportation problem than congestion.
Despite overall positive marks for the nation’s infrastructure of roads, highways, etc., an important segment of the small-business owner population believes that traffic congestion and/or road conditions are increasing their cost of doing business. Over one-third (35%) say that they are increasing costs (Q#17). Just 5 percent classify the higher costs as significant, but 14 percent classify them as important.
Sales are apparently less impacted. Twenty (20) percent believe that road conditions and/or traffic congestion have hurt sales (Q#16). Yet, only 2 percent consider the damage significant.
back to top
Vehicles
Small businesses (employers with 1-249 employees) use an estimated 26 - 27 million vehicles in their businesses with 82 percent possessing at least one (Q#4). Of those owning one or more vehicles, the average number per firm is 5.9 (not including off-road vehicles such as tractors or snowmobiles). The median number is almost three. However, a great difference exists in the number of vehicles, if any, used for business purposes.
Trucks are the most frequent type of vehicle used. Just over half (52%) of small businesses use at least one truck in their business operation (Q#2). More than 6 percent have what could be characterized as a fleet of trucks, running six or more of them. The average number of trucks used is 2.2 per firm and 4.2 per firm among those having at least one.
Cars and SUVs are not as plentiful as trucks, but almost as many firms have them. Between 40 and 45 percent of small-business owners use each type. The average number of cars is 1.5 per firm and 3.2 among those owning at least one (Q#3). The average number of SUVs used per firm is 1.1 and 2.5 respectively (Q#1).
back to top
Delivery
Business vehicles serve a number of functions. Transporting people from place to place or from customer to customer, for example, is an important and on-going use. Another primary function of business vehicles is delivery (hauling). Forty-eight (48) percent of those using one or more vehicles or about 40 percent of the entire small-business population use at least one vehicle for this purpose (Q#5). Therefore, the ability to move easily on the nation’s streets, roads and highways has a direct economic impact on a large proportion of smaller firms.
Over the last three years, traffic congestion and road conditions have forced small-business owners into making important changes in their deliveries. Twenty-nine (29) percent report that they have changed the time of day that they deliver due to either or both causes (Q#5A). Owners of smaller, small firms are somewhat more likely to have done so, suggesting that they have more flexibility in scheduling.
A somewhat larger share (35%) report changing the route(s) they use when making deliveries or hauling (Q#5B). Twelve (12) percent indicate that they changed the type of vehicle used (Q#5C). However, the survey did not determine if the vehicles grew larger or smaller as a result.
The cost of delivery is rising. Though the per unit cost of vehicles, fuel, and people have been reasonably behaved over the last three years, more than half (51%) report that the amount of time required to make the same deliveries or hauls has increased (Q#5D). Increased time on the roads translates into higher employee and fuel costs, and greater wear on the vehicle.
Twelve (12) percent say that it has been necessary during the last three years to cancel delivery to some customers due either to traffic congestion or road conditions (Q#5E). Four percent who do not now deliver report that they, too, terminated the service in the last three years for the same reasons (Q#6). That means over 8 percent of those with vehicles have been forced to cancel at least some delivery service. It is not possible to calculate the economic impact of the actions taken with the data available.
Small businesses could also be economically impacted in their role as consumers as well as in their role of providers of delivery or hauling services. However, nearly three-quarters (73%) of small-business owners report that the timeliness of deliveries made to them has not changed in the last three years (Q#7). Of the remainder, almost twice as many say the timeliness of service has improved (15%) as say it has deteriorated (8%). These numbers don’t account for owners who have lost service nor for the price they now pay for the service. Yet, the most noticeable impacts currently seem to fall on the side of the provider.
back to top
Customer Use of Roads/Parking
About 60 percent of small businesses must have at least some customers reach their business premises in order to operate normally, though only 35 percent need all or most of their customers to be able to reach them (Q#8). Thirty-nine (39) percent of small-businessmen and women say that customers do not have to come to their business location in order to operate normally. The business effectively goes to the customer in those cases. Still, convenient customer access to the majority of small businesses is important to their operations.
When customers do travel to a small business’s premises, most do so by driving. Ninety-six (96) percent of those small-business owners whose customers appear at the business say driving is the typical means of getting there (Q#8a). That leaves almost nothing for other modes of transportation. However, these numbers should not be interpreted to mean that 96 percent of all small-business customers reach a business location by driving. It means customers “typically” do so. For example, 75 percent may drive, 10 percent walk, 10 percent take the bus, and 5 percent ride a bicycle. But, driving is overwhelmingly the way customers reach small businesses.
Once customers reach a business, they need to be able to park their vehicle. Small-business owners for the most part (95%) believe that their customers have reasonable access to parking near the business (Q#8b). Just 4 percent do not. As a result, customer parking is infrequently viewed as a business problem.
back to top
Employee Use of Roads/Parking
Like customers, most small-business employees reach the business location by driving. Eighty-eight (88) percent report the largest number of their employees drive to work (#9). Six percent say that most walk. Employee walking occurs almost exclusively to the smallest firms. Anecdotally, owners of the smallest businesses have a high propensity to hire from the immediate area. These data re-enforce the impression.
Few small-business owners have a substantial portion of their employees who reach their jobs in ways other than the way the largest share do. Eighty-eight (88) percent believe that virtually all of their employees reach work by a single mode of transportation, usually driving (#9a). Four percent say that a substantial portion of their employees, though not the largest number, reach work by public transit.
Employee parking is sometimes an issue for employees as well as policy makers. Eighty-three (83) percent of owners report that they have a parking lot where employees may park (Q#10). Among those who have firms with 20 or more employees, the parking lot number rises to 95 percent. Of the 17 percent who do not have employee parking available, 11 percent or 2 percent of the total population help their employees pay for parking in commercial lots or garages (Q#10a).
back to top
a. Public Transportation
While obviously varying by locale, public transportation is not a major mode of transportation for small-business customers or employees. Still, 64 percent say that their business is accessible by public transit (Q#11). The survey did not determine the extent of access, for example, the frequency of buses.
One strategy to divert employees from commuting by automobiles is for employers to subsidize employee fares on public transit. Six percent of those whose businesses are accessible by public transit or 3 percent of the entire population provide such subsidies (Q#11a).
back to top
b. Telecommuting
A second strategy to alleviate congestion on roads and highways is to encourage telecommuting. Nineteen (19) percent of small-business owners report that they have one or more employees who work primarily from their homes (Q#12). The practice is most prevalent in the smallest firms suggesting that such flexibility is one way even the smallest can compete for employees.
Telecommuting is confined to only a limited number of employees, however. About half (48%) who engage in the practice allow only a single employee to telecommute and about three-quarters (78%) allow two or fewer (Q#12a).
The primary reasons to allow employees to work at home have little or nothing to do with traffic congestion, at least not directly. Less than 1 percent cite traffic as the reason that they allow employees to telecommute, though an unopposed reason such as “allowing them to work at home is the only way I could hire the person” may be indirectly responsible (Q#12b). Still, the primary reasons given for allowing employees to telecommute are business oriented. Better space or facilities at home, personal situations such as small children or a handicap, closer to places that the employee must travel on business such as with a salesman, and too far from the owner’s location are offered with similar frequency. A plurality say “other,” though it is not clear what other means.
back to top
c. Owner Commuting
There are relatively few owners compared to the number of their employees, so their direct impact on roads and highways is relatively small. Yet, owner commuting practices reveal much about where the owner lives and the type of employee commute practices he or she is likely to encourage, if he encourages any at all.
A large number of owners live close to, or in the same building as their firms. Almost one-quarter (24%) take fewer than five minutes door-to-door to reach work on a typical day (Q#13a). That figure is readily explained by the 23 percent who say that their firm is home-based (Q#4D). Owners of the smallest businesses are significantly more likely to fall into this category. But even when owners do not live above the store, commutes appear reasonable indicating that they live within the community. Almost 60 percent take less than 15 minutes door-to-door to reach their businesses and 80 percent take less than one-half hour. Seven percent report that it takes them 45 minutes or more.
Most small-business owners (79%) reach work by driving just as do their employees (Q#13). Those with more than 10 employees are about 20 percentage points more likely to do so and indicate that they live farther from their businesses than do those employing fewer than 10 people. The second most frequent mode of transit is walking. Fourteen (14) percent walk to work. Four percent say they reach work some other way which often means by bicycle. But virtually none of them use public transit to reach their businesses.
The number driving seems inconsistent with the number of home-based firms. How can one drive to work when he is already there? The most likely explanation is that many of these owners conduct business outside the home, such as a contractor, and drive to the work site or customer’s premises.
back to top
Roads and Business Location
In the last five years, one in five businesses has changed location (Q#14). (Since these figures do not account for churn in the business population, they do not fully represent the turnover in commercial and industrial properties.) The condition of roads and/or traffic congestion plays a role in many of those relocation decisions.
Fourteen (14) percent of small employers who did relocate, or about 3 percent of the entire population, say that their personal commuting time was a major factor in their decision to relocate (Q#14a). Another 10 percent say that it was a minor factor. A non-mutually-exclusive 14 percent report that parking for employees and customers was a major factor, though 19 percent claim it a minor factor (Q#14b). Convenience to another form of transportation, such as rail, water, or air, played a major role in just 3 percent of relocation decisions (Q#14c). Thus, where transportation is an important factor in the decision to relocate, roads, highways and associated facilities are the critical consideration. By extension, one might assume that once a decision has been made to relocate for reasons other than transportation, the specific site for the move would be influenced by roads far more often than any other transportation form.
Fifteen (15) percent of small-business owners disclose that in the last five years they added one or more business locations (Q#15). The owner’s commuting time was a major factor in few of the sites chosen. Just 5 percent report it was, though 18 percent say it was a minor factor (Q#15a). Parking for employees and customers is more important. The relative importance of these two interests makes sense as an additional facility will likely be the primary operating location for employees/customers but not the owner. Fourteen (14) percent say that parking was a major factor and 12 percent a minor factor (Q#15b). But when adding locations in contrast to relocation, other transportation modes become more important than when changing locations. Nine percent say another form of transportation was a major factor in deciding where to locate the additional facility (Q#15c).
back to top
Final Comments
Roads are the primary and almost exclusive means of transportation immediately affecting small business. The overwhelming majority of employees reach work by driving; most customers come to small businesses by driving; a large majority of small-business owners arrive at their firms by driving. Moreover, these firms use 26 - 27 million business on-road vehicles, about one of every eight in the country. Though almost two-thirds of small businesses are accessible by public transit, public transit is typically a non-factor in any aspect of small-business operations. Other transportation forms, except walking, are even more rarely used. The survey did not, however, explore the use of transportation modes such as air for such business activity as sales calls or convention attendance.
Small-business owners are generally happy with street/road/highways/bridges infrastructure in the areas in which they do business. However, they see the costs associated with using the roads rising, particularly in terms of time spent on them. Eight percent of those with business vehicles say that in the last three years they have cancelled delivery to some or all customers. Such cost increases appear tied to traffic congestion rather than road conditions. Still, traffic congestion is far from a universal phenomenon and most small-business owners experience free flowing traffic or occasional back-ups most of the time including in cities. Even employee and customer parking does not appear to be a common problem.
Despite their favorable assessment of current road transportation, many small-business owners anticipate deteriorating conditions, at least in specific areas. The best example of that concern involves decisions to relocate the business and/or decisions on where to place an added location. Personal commutes and employee and customer parking are often factors in these decisions, sometimes major factors.
The urban/rural location of a business influences the assessments made by small-business owners. As a general rule, traffic congestion and associated costs are greater the more urban the area. But with the exception of the 10 percent of the population who lie in zip codes with the highest population density, the differences are marginal rather than radical. The number of cases in the most urban 10 percent is too small to allow sweeping statements, but it appears that the radical differences begin and end here (and perhaps also, to a much less extent, in the most rural 10 percent).