Telecommuting and Transportation

Author: Dr. Jean-Paul Rodrigue

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1. Information Technologies and Transportation

The emergence and diffusion of information and telecommunication technologies (ICT) have several economic and social impacts, notably on functions related to information processing and diffusion. One of the ongoing tenets is that ICT can offer a form of substitution for physical mobility. Particularly, it can be expected that work-related movements can be mitigated through telecommuting.

Telecommuting. Using information and telecommunication technologies to perform work at a location away from the traditional office location and environment. Commuting is thus substituted and it is implied that it took place remotely.

There are obviously various degrees of telecommuting ranging from a partial substitution where a worker may spend one day per week performing work at another location, to a complete substitution where the work is performed elsewhere. The later is much less likely as the great majority of work tasks tend to be collaborative and require face-to-face meetings. Yet, with the emergence of an information society, the transactional structures of the economy have changed drastically towards a networked organizational form to which ICT support improved and more intensive interactions. There interactions involve three major spheres:

• Personal. ICT enables individuals to maintain contact through additional mediums (e.g. email). This main lead to more interactions.
• Customer / Retailer. Online retailing has opened a whole new array of commercial opportunities as a complement or a substitution to conventional shopping. It does not necessarily imply that there would be more consumption, but that a growing share of retailing transactions take place online, resulting in parcels to be delivered.
• Business to business. The increasing scale and intensity of business transactions is commonly linked with new efficiencies, particularly through supply chain management.

2. Telecommuting and Transportation

Computers, networking and related information and communication technologies continue to push the centrifugal forces that have shaped the physical structure of metropolitan areas around the world outward for the last five decades. Reducing automobile use is one of the primary expected benefits of telecommuting, as it is assumed that corresponding home-to-work trips will not be made. Telecommuters usually eliminate two trips per day when they work at home. If this commuting was done driving, the reduction of trips has obviously environmental benefits, including reduced emissions of pollutants and reduced fossil fuel use.

Telecommunications, like the automobile, has become a force shaping land use and transportation in urban areas. Cheaper space in the suburbs is an important requirement for newer and smaller firms that are users of new telecommunications technologies. The growing capability of telecommunications allows businesses and other organizations to locate operations more flexibly, but this may be perceived as paradoxical as telecommuting may be supporting an energy inefficient spatial structure.

This all said, telecommuting has often failed the meet expectations and its share remain relatively unchanged. There are many reasons, ranging from activities that cannot be easily substituted to a loss of direct control from management. One major factor behind this continuing low usage level is that if a job has the potential to be complemented by telecommuting it is also a target to be relocated in a low cost location. There is thus a large amount of telecommuting that took place as offshoring instead.

3. Telecommuting and Office Space

Location and larger building sizes have dominated retailing and offices since the Second World War. Indeed, newer and larger stores overtook smaller rivals and established new distribution structures based on mass retailing. The standard 2,000 square feet market of the 1950s, became the 20,000 square feet supermarket in the 1960s and evolved into the 50,000 square feet superstore of the 1990s. Following a similar trend, the small office of a company has become several floors in a skyscraper located in downtown areas and in time the amount of space devoted to administrative functions has increased significantly.

Competition and technological changes are forcing corporations to recognize real estate as an undermanaged asset as occupancy cost is the second largest corporate expense after wages. Telecommunications advances may lead to a change in the space needs of several corporations, as more services can be performed with less office and branch space. Telecommuting workers also tend to be more productive as they systematically spend more time working, mainly because they are not spending that time commuting but also ICT makes them more available to perform tasks.

Most corporations see telecommuting as a way to reduce costs, not necessarily to promote the welfare of their office employees, even if they are doing both at the same time. The costs of providing office space to employees is very high, far more than just the cost of leasing or building the space and maintaining it. It also concerns for instance parking which tends to be more expensive in high density areas often related with office activities. In some cases, it can run as high as 20 to 30% of disbursed salaries per employee. In 2007, nearly 20 million workers in the United States (about 3% of the total workforce) were telecommuting at least once a month.

The impacts of telecommuting on office space and on the general urban environment can be summarized by the following:

• The rapid proliferation of electronic communications, such as faxes, cellular phones, intranets and teleconferencing, promotes the existence of telecommuting.
• Telecommuting is part of a paradigm where organizational structures are being transformed for a hierarchy to a network of collaborators.
• Telecommuting is changing parts the retailing sector by rendering some location structures obsolete and by minimizing inventory costs.
• Telecommuting helps lower office space requirements by decentralizing a set of tasks to a low cost environment, such as the suburbs or at home. There are a corporate strategy to improve the productivity of labor.
• Telecommuting reduces the usage of the urban transport system because fewer trips are generated and distances are shorter and may reduce congestion.
• Telecommuting improves the flexibility of office activities by offering a wider array of locational choices.