The Biggest Mode Share Trend in 30 Years

For decades the transportation industry has invested $100s of billions of dollars aimed at altering the mode of travel in the USA. Every 1/10th of percent of mode share has been fought over. Transit, carpool, walk and bike are all at lower levels than they were in 1970. By 1990 the dramatic fall started to stabilize. Then in 2020 a terrible event occurred - COVID-19.

The collective effort to dampen the transmission of COVID has opened many eyes to a Wizard of Oz moment - a mode that was always there and viewed as "desirable perk" became a part of how work got conducted for the last three months. Estimates of 25 to 35% mode share of work from home (WFH) have been floating around. This from a mode that was barely a few percent in 1970, mostly isolated to small home businesses. No trend or investment has moved mode choice so dramatically in as short of time, yet many people across the world found themselves with "no mode choice" and did it. Now we have headlines saying "ONLY 12% Want to Work from Home". WOW - that's a shift! Let's look into this a little deeper before we cast any judgments on the role WFH can play.

Background

WFH has been tracked in journey-to-work census information at least as far back as 1970 in the USA. Here are the USA trends over 50 years (all approximate census data for entire country):

In 1970 driving alone was 56%, carpool 23%, transit 9%, walk 8%, WFH 2%, other 2%.

In 1995 (a midpoint) drive alone 75%, carpool 14%, transit 5%, walk 3%, WFH 3% , other 2%.

By 2018 drive alone 76%, carpool 9%, transit 5%, walk 3%, WFH 5% and other 2%.

The WFH trend has been on the move increasing from 3.3% in 2000 to 5.3% in 2018 while most other non-drive alone modes have fallen. While these USA numbers blur specific information that a metropolitan area might experience, they provide broad trends, and WFH is moving nationally like no other mode. If the "headlines" are right, it will become the 2nd highest journey-to-work mode choice. In some of the largest metropolitan areas of the USA (Los Angeles, Houston, Atlanta, Miami, Phoenix, Minneapolis) the WFH share is currently the largest non-auto mode of choice. In 2018 some metropolitan areas have WFH well above others (for example, Atlanta 9.6%, Seattle 7.7% as compared to Houston 3.9% and Boston 3.7%). So the access to and use of WFH is not uniform, sort of like transit.

The nearly 70% growth since 1995 has been mostly in the last 10-15 years as technology has facilitated more than just small home businesses. Broadband is the new freeway. Prior to COVID, 60% of workers were capable of working from home and 80% did it some times. But an occasional ice storm or hurricane does not a mode make.

Today

During March, April and May when congestion evaporated across the USA, virtual WFH was the leading asset to economic survival. While folks are rightfully quick to point out that WFH will not be sustained at these COVID levels, clearly a new normal will settle in. Why is that?

Let's start with economic realities. Each employer's staff member that works from home saves them an estimated $11,000 per year. Each WFH worker saves an estimated $2,500 to $4,000 per year. Office rents are always fighting it out with health care as the top indirect business costs. Employees were not widely bought into densification of work areas to save rent costs through cubes and open floor plans. Now post-COVID, social spacing will be more common placing greater financial pressures on overhead cost.

As much as we hear folks "ready to return" to the office, the financial and worker flexibility issues do not align with a return to February 2020. WFH has been rising. The pandemic as only accelerated this pace. No one is advocating for sustaining the current level of WFH but it is clear that the outcome will not be 5%. So if it is not 35% and it is not 5% what will it be?

The Future

The advent of home broadband as contributed to a meaningful change in WFH in the last decade. The advance of 5G across the USA - rural, distance challenged to economically disadvantaged is likely to put WFH on steroids. Global Work Place Analytics estimated that 50-60% of workers were not at their desks at any one time. If just a portion of those meeting or breakouts were done WFH, we will not see 5% WFH any more.

In the San Francisco Bay Area the Metropolitan Transportation Commission had envisioned a "Columbus Day Initiative". It contemplated that if transportation management could be used to create the level of congestion reduction that occurred on a Columbus Day that would be a major mobility achievement for the region. We have clearly see much more than a Columbus Day in every metropolitan region during the COVID shelter at home crisis. While congestion is clearly on its way back in most metro areas, where it settles is fully speculative. Will WFH, bike and walk be able to offset severe reductions in transit use as people slowly adjust to post-COVID commuting? I guess we will see.

One thing is for sure, if we were to achieve a 12% WFH mode share we would be well on our way to a new normal. One that could be accelerated with 5G. A 12% share is really not a bad guesstimate. Gartner Research estimates that the mode choice may settle at 12.5%. If you say that compared to the 2018 baseline that if an additional 20% of workers would work from home one day a week on average this equates to nearly a 10% mode share - and not too heavy a lift to get there. WFH is poised to become the USA's new #2 journey-to-work mode choice.

Here is another way to look at it - if 52% of people WFH once every 20 days, 25% WFH once every 10 days, 17% WFH once a week, 4% WFH half time and 2% WFH full time - you end up at 12.5%. This points to a big question of how can we facilitate WFH to achieve it's potential? What other modes can help?

When we talk about strategic transportation infrastructure, we may want to consider 5G infrastructure collaboration, facilitation and hardening. In transportation demand management, maybe we should be talking about how new residential areas are best equipped for the future WFH reality - including floor plans. A huge question will surround retailing and how consumers are able to conveniently conduct transactions and have experiences that are not dominated by looking for parking in a shopping center. Transit is being asked to change in ways not imaginable four months ago. Maybe the marriage of frequent transit-served corridors and land use will emerge where limited transit resources can best be invested. Will micromobility roles for e-Bikes expand as discretionary active transportation modes seek a greater trip radius? Where do electric vehicles and transportation network companies fit into the 2021 landscape? Many more questions than answers, but the monumental changes of the past three months clearly points to changes. And if all WFH gets is 12% - WOW!