English Summary
Transport Consequences of Telecommuting and Teleshopping
"Why waste time and money queuing on the highway when you can work at home?" More and more people ask themselves this question and research indicates that eventually many of them will take advantage of the new possibilities offered by information technology. Not only for working at home but also for shopping, banking and possibly even distance learning through the home computer.
It seems reasonable to assume that such developments are going to influence our patterns and habits of transportation and perhaps even contribute to a reduction in travel. Several reports thus envisage an important role for information technology in the effort to reduce the energy consumption and carbon dioxide (CO2) emissions associated with transportation.
But what would be the real effects on travel of these developments? - and is it possible to influence these developments? Those questions form the motivation for the analysis initiated by the Danish Transport Council and the present report aims at answering them.
Purpose
The purpose of this report is to analyse how the rapid development in information technology might influence travel during the next five years. The report focuses especially on the applications of telecommunications in telecommuting (working at home) and teleshopping (shopping via the Internet). This is due to the fact that these applications are related to a significant volume of person kilometres travelled and because they have been well documented. Finally these applications have been subjects of international research and there also exists good empirical data on travel related to working and shopping.
More specifically, the main purposes of the report regarding telecommuting and teleshopping are:
Approach and methodology
The analysis is based on the following model which illustrates the general understanding of the relations between telecommunication and travel.
The basic idea of the model is that developments in the use of telecommunication are determined by a number of drivers and barriers. Examples of drivers are technological development, the cost of transportation and government regulation and subsidy. Barriers are - among others - tradition, legislation and price level. For the present purpose, the term determinants is used to collectively describe drivers and barriers.
The determinants have been identified through comprehensive information retrieval and desk research. The information retrieval included extensive use of the Internet, database queries and more than 40 in-depth quantitative interviews with relevant key figures in Denmark, the European Commission and the USA. Finally, the project team have participated in several conferences and seminars.
Knowing the determinants and the ensuing changes to the use of telecommunication makes it possible to develop scenarios for future developments. By developing both a maximum and a minimum scenario the inherent uncertainty of estimates of future developments is anticipated. The difference between those two scenarios illustrates the latitude for government regulation, subsidies and other forms of intervention.
Quantitative estimates of the usage of telecommuting and teleshopping in about five years were made on the basis of the current usage and two scenarios. This was further supplemented by scenarios from other countries.
Subsequently, the relations between telecommuting and teleshopping and the amount of person kilometres travelled were analysed both qualitatively and quantitatively. A fairly large amount of international research and empirical studies covers the relation between commuting and telecommuting whereas teleshopping in relation to transport has been only sparsely researched.
The quantitative estimate of the effect on transportation is based on the surveys of travel behaviour made by the Danish Ministry of Transport. They constitute important data material because they provide detailed information about travel purposes and travel distance by city type, income distribution, family type, and occupation.
Results
The most important results of the report are described below starting with a summary of decisive determinants for the level/extent of telecommuting and teleshopping. Secondly, the ensuing effects on person kilometres travelled are described. Finally, a brief discussion of effects of other applications of telecommunication is presented.
Telecommuting
It is only within the last couple of years, that the possibilities of telecommuting have become an issue in the public debate in Denmark. Hence the lack of applied quantitative research into the usage of telecommuting and the consequent lack of accurate data on the spread of telecommuting in Denmark.
The principal parameters in assessing the future spread of telecommuting in Denmark are:
Regarding regulation and legislation a number of laws and government orders relating to telecommuting need clarification. Through the level of taxes and dues the government can influence the spread of telecommuting. Improved possibilities for tax exemptions for home office equipment as well as steadily increasing transportation costs are examples of this. An applicable and specific framework agreement on telecommuting between the labour-market parties would also increase the spread of telecommuting.
Our research shows that telecommuting is expected to be most widely used by professionals and similar types of employees who are used to work independently. The main driver will be the employees request for greater freedom to plan his or her time individually, thus maximising returns from both work and leisure. However, social considerations and work conditions make full-time telecommuting very difficult whereas telecommuting one or two days weekly seems very attractive to many employees. Limited telecommuting, of course, results in limited reductions in person kilometres travelled.
Employers are uncertain whether telecommuting can benefit their companies. Even though research from abroad show increased productivity for telecommuters many employers fear that this productivity gain will be offset by increased work load for colleagues of the telecommuter. Employers would also benefit from reduced investments in office facilities since more telecommuters can share one desk. However, this benefit has to be compared to increased costs of establishing and maintaining home office facilities. Additionally, some companies fear that the telecommuter might stagnate professionally and fall out of step with the corporate culture. This fear can be reduced, however, if measures are developed to support the telecommuters informal contacts to colleagues and managers.
Teleshopping
The principal parameter for the spread of teleshopping is simple and user-friendly contact between vendor and customer. The Internet satisfies those demands. Through the rapid growth of the Internet and coming possibilities of integrating it into television sets many households in Denmark will have access to the Internet in five years. Thus the precondition for a steep increase in teleshopping is present.
Growth in teleshopping is limited by problems of payment safety on the Internet. However, many technical solutions to this problem are being tested at the moment and the likelihood that a satisfying solution is found shortly - probably before the end of 1997 - is high.
Teleshopping is suitable for both convenience goods and durable goods. But the two categories of goods exhibit important differences which influence expectations of the development in teleshopping during the next five years.
The spread of teleshopping in convenience goods is expected to be slow because the establishment of an efficient and competitive delivery service requires a large number of customers in a community. At first, goods will be delivered by local shops but if teleshopping becomes widely spread the retail stage can eventually be left out and replaced by special distribution storages outside city areas providing direct delivery to households.
When buying dry food stuffs i.e. rice, sugar the possibility made available by the Internet of presenting goods through pictures and descriptions will often be sufficient to replace a visit to the shop and often the customer will thus be able to order and pay through the Internet.
Fresh-food, i.e. meat, vegetables and fresh bread, are not standardised goods and hence many customers want to see them in the shop. Fresh-food also cause more problems of distribution than dry goods because they are more delicate and often requires cooling.
The Internet already makes it possible to buy durable goods. Durable goods are mainly mail order goods like compact discs, books, software, sex products etc. Smaller durable goods are particularly well fitted for teleshopping. The customer has no actual need to visit the shop since all relevant information can be presented through the Internet. In addition, the size of the goods make postal delivery competitive, in some cases even from abroad. International transactions, however, cause difficulties of collection of taxes and dues and is becoming an increasing problem for the Danish tax authorities.
The Internet is useful for comparing price and quality for large durable goods. Hence the customer can work out the most attractive offer in the comfort of his or her home. Once found the customer can drive directly to the right shop, inspect the item and perhaps negotiate purchase conditions. A drive to the selected shop is still necessary but in many cases drives to shops with less attractive offers can be avoided.
Effects of telecommunication on transportation
Telecommuting
Research into the effects of telecommuting show that it might result in a major reduction of person kilometres travelled for the individual telecommuter. The effect is increased by the tendency that employees who wish to telecommute often have longer commuting distances than the average employee.
Recurrent hypotheses claiming that the telecommuter increases his or her use of transportation for other purposes seem to be rejected. Furthermore results of trials do not imply that the telecommuters family increase their use of transportation.
However, if aspects such as appointments and patterns of settlement are included conclusions become less clear. Telecommuters can move further away from their workplace or they can seek employment further away from their home. This might result in an increase in transport kilometres that will more than offset the reductions following 1-2 days of weekly telecommuting. But research results in the area are relatively few since the effects in question are detectable only after a number of years of observation. An American study based on relatively few participants shows a tendency for telecommuters to locate further away from their workplace.
In the long run, even limited telecommuting can reduce the need for car ownership. Since experience indicates a relationship between car ownership and transport behaviour this might in itself reduce both vehicle kilometres and total person kilometres. However, other circumstances are important as well. An example of this is the need for leisure related transport which is difficult to satisfy by light or public transportation.
Telecommuting might enhance cohesiveness in the community. When people are not required to leave their community to go to work they will probably make more use of local shopping and leisure facilities. Hence telecommuting might contribute to a reduction in the current concentration of shopping facilities and consequently reduce the need for transportation related to shopping and running errands.
The estimates for the usage of telecommuting during the next five years have been made under assumptions of good and bad preconditions respectively for the usage of telecommuting. According to the estimates about 50,000 individuals will be telecommuting an average of 1.2 days weekly under bad conditions in about 5 years from now whereas about 200,000 individuals will be telecommuting an average of 2 days weekly if conditions for telecommuting are good.
Calculations of the effect of telecommuting on person kilometres travelled under good and bad conditions show a reduction in the total need for commuting between home and work of between 0.5% and 3.5% respectively. This amounts to a reduction in total person kilometres travelled of between 0.1% and 0.7%.
Hence the direct influence of telecommuting on person kilometres travelled is very small. Of perhaps greater significance is the fact that higher costs of transportation make telecommuting more attractive. Consequently, higher costs of transportation make telecommuting a more attractive alternative to physical transportation.
Both nationally and on EU level applications of telecommunication are often mentioned as means to enhanced development in peripheral regions. In addition to other applications of telecommunication such as distance learning and video conferences telecommuting has had huge attention as measures for maintaining and improving employment possibilities. To the extent that such applications succeed in increasing economic activity in peripheral regions there will be an increase in freight transport and travel in the region. Furthermore an increase in travel and freight transport between the peripheral regions and economic centres can also be expected.
Teleshopping
The estimates of the spread of teleshopping in five years covers the following interval:
Minimum: 64,000 weekly telepurchases
Maximum: 257,000 weekly telepurchases
Based on the above estimates the total reduction in person kilometres travelled in Denmark will be between 0.08% and 0.31%, i.e. a very small effect. The estimates do not include increased freight transport due to goods delivery and the real reduction of transportation is consequently even smaller.
A scenario based calculation show that the freight traffic stemming from delivery of convenience goods is significantly less than the traffic stemming from individual shopping. Similar results are found in calculations on the national level. However, goods delivery will result in changed traffic patterns and heavier traffic in residential areas. In spite of this, calculations show a general reduction in carbon dioxide (CO2) emissions.
In the long run teleshopping is going to threaten mainly shops whose existence rely on dry goods. Hence discount stores may be endangered by teleshopping whereas local shops who also sell fresh-food stand better chances of surviving.
In the case of durable goods, visiting the shop may also have the additional purpose of providing a shopping experience. The shopping experience is a phenomenon which is regarded as being of increasing importance to Danes and which can not be substituted by telecommunication.
Teleshopping of shopping goods is not necessarily going to replace much travel but it will contribute to an increase in freight transport due to delivery of goods. To the extent that goods are ordered from abroad the increase in freight transport may be substantial. If the existing possibilities of delivery through postal services are used the effect on local traffic will be limited but if new delivery services are established in parallel to postal services an increase in freight transport might follow.
Other applications of telecommunication
The focus of this report has been on telecommuting and teleshopping but other applications of telecommunications also have the potential to reduce travel. One of the most interesting applications is the use of video conferences which has the potential to reduce the need for travel by air. Since only a few Danish companies use video conferences at the moment the reduction in travel is expected to be relatively small. Our calculations show that only a very high level of video conference usage reduce travel at a level comparable to a reduction from telecommuting.
Other applications of telecommunication expand heavily at the moment. Mobile communication usage and the Internet expands rapidly. In five years it is expected that in Denmark about 4 out of 5 million people will have a mobile phone and more than two millions will have access to the Internet of which one million will have access from their homes. The mobile phone makes the user able to communicate from any location. The Internet makes contact and co-operation with the rest of the world feasible which will often cause travelling. Even a small influence from those applications may have greater consequences for the total level of person kilometres travelled than the applications studied in this report.