Telecommuting Breaks Transportation, Pt. 3: House Money
By: Mitch Turck
Tags: Transportation, Urban Planning, Remote Working, Remote Work, Future Of Work

Credit: Macrovector (composite image)

This multi-part series addresses core concepts in telecommuting’s impact on transportation; concepts which have gone largely dismissed by the very experts who fund, plan, and build our nation. For more, see Part 1 and Part 2.

House Money

The holy grail of sales opportunities is the house money scenario, in which a customer’s investment in your solution presents zero financial risk because their dollars are currently being dumped wastefully into the very problem you’re solving. The rub, of course, lies in whether both parties agree on what is considered waste — and a lack of agreement there often stems from a misunderstanding about whose house you’re in.

Companies developing connected and autonomous vehicles have leaned on house money arguments from the beginning: no one wants to spend a hundred billion dollars to sit in traffic, and no one wants to spend eight hundred billion dollars to clean up the aftermath of traffic collisions. It stands to reason that if the public is routinely pouring money into unwanted outcomes, they’d surely be willing to invest in solutions to mitigate such unwanted outcomes for a fraction of the current expense.

That argument, logical as it might be, is problematic because the public doesn’t see their money going to waste. Whether veiled or normalized, the steps between a government’s money pit and a resident’s pocketbook are often exhaustively untraceable. We see evidence of this disconnect when surveying the public on connected & autonomous vehicle adoption, wherein the most effective carrot to gaining support is the notion of lowering their car insurance premiums — yet, the greater financial benefit of systemic infrastructure and operational savings goes ignored.

Mobility advocates have battled with this financial disconnect for decades. When a COVID-era traffic study revealed that Californians were saving $40MM every day thanks to the downturn in traffic collisions, transit reformists aplenty began nominating what should be done with the money. What money? The money from this alternate reality where insurance claims didn’t need to be paid out, and where city property wasn’t damaged?

Those dollars don’t get returned directly to residents as rewards for driving less. At best, they vaguely come back years later under the banner of lower taxes or health insurance premiums — at worst, they get absorbed as usual to balance budgets or boost profits. The public only sees a murky swamp of fluctuating social costs, unable to decipher where behavioral changes directly benefit them. Hence, citizens gravitate towards the immediately perceivable costs (e.g. car insurance), and the broader house money argument falls flat.

Not so with telecommuting. Working from home has its macroeconomic implications, without a doubt. But the relevance of its microeconomic impact hits home like no other, and as a result, makes it the most dangerous behavioral alternative in transportation.

Mrs. Citizen doesn’t like commuting. What’s more, while she doesn’t know she’s spending thousands every year to support commuter culture in general, she is well aware of the thousands she’s hemorrhaging to cover her fuel, parking, insurance, and maintenance costs. If a solution could simultaneously save her from something she doesn’t want to do, and save her the cost of doing it, the decision is all upside. House money.

This microeconomic influence is hard to argue with, but even in reversing some of the behaviors that made America so unsustainably car-centric, it still perpetuates ignorance of holistic financial impacts. That’s not to blame Mrs. Citizen for the lack of transparency corporations and governments have burdened her with — but when the ripple effects of telecommuting en masse begin to erode parking revenues, gas taxes, insurance revenues et al, balancing budgets at city and state levels will become an even more treacherous game of musical chairs.

Taken as an opportunity, leaders could open up their books and engage the public in a way mobility advocates have always dreamed would happen. Taken instead as a crisis, the usual three-card monte funding maneuvers which have sewn seeds of public distrust for decades could come to a head, as an influential minority of citizens naively proclaim their independence from transportation funding.