Working from Home: Revising metro strategic transport models

This project tracks the travel activity and positions in relation to Working from Home (WFH) caused by the COVID-19 impact. It covers the Australian population through a longitudinal data plan (commencing in March 2020) and what this might mean as we get to understand responses from employers and employees to WFH until we reach some equilibrium, possibly when vaccination is widespread.

The COVID-19 pandemic has produced a number of unintended consequences for the transport network. At the height of the pandemic, we had a significant number of people work from home, in large measure due to government restrictions, with travel allowed only where work was deemed ‘essential’.

With WFH we observed substantial reductions in travel by all modes, but especially shared modes – public transport and rideshare (for example, taxi, Uber, Ola). With WFH during the pandemic phase, and plans as we transition out of COVID-19 to relax restrictions while still ensuring social (or physical) distancing in all public spaces (including offices and common space in office buildings), the ‘success’ of flattening the pandemic curve has resulted in flattening the peak periods of travel (what we call ‘killing off the camel and replacing it with a horse’).

Participants

• Department of Transport and Main Roads (Queensland)
• Department of Transport (WA)
• Transport for NSW
• University of Sydney

The unintended consequence of increased WFH arising from COVID-19 is a demonstration of how it has the ability to tame traffic on the roads and crowding in public transport. The forced intervention of the virus shows WFH as perhaps the most significant and available policy lever to manage the performance of the transport system. Other than the advent of the automobile itself, its subsequent impact has perhaps been the most significant in recent transport history.

This raises important questions as to what revisions will be required to strategic models used by State governments particularly in respect of modal choice and frequency of weekly travel under various WFH futures. This research program develops revised post-COVID-19 travel choice models, conditioned on WFH preferences.

Project background

COVID-19 may have broken the resistance of many employees and employers to working from home. The idea that working from home through telecommuting or a nine-day fortnight, referred to as distributed work practices, has been suggested for many years. Indeed earlier research on finding ways to reduce enhanced greenhouse emissions, essentially CO2 in the transport sector, suggested that the two main ways of achieving this, in the absence of road pricing reform, was to improve the fuel efficiency of cars (reduced emissions per kilometre) and to introduce distributed work practices.

Efforts to improve public transport within the financial constraints of government have not proven to be a panacea in making a significant difference to traffic congestion. We now have first-hand evidence – a real market test, admittedly under severe restrictions – that working from home indeed works much better than many employers, and indeed many employees, had thought. So the early evidence is in, and although we do not expect such a high incidence of working from home when restrictions are lifted, we now have a real opportunity to promote an increased amount of working from home to achieve a number of other societal challenges.

One of the greatest impacts has been on traffic congestion, although we recognise that it has also resulted in a significant drop in public transport use, and some trips normally taken by public transport are now undertaken by car given the growing importance of biosecurity on one’s health risk.

When the restrictions are fully relaxed, if we could obtain at least one day a week working from home, spread equally over the five working days (or reasonably equally to avoid a dominance of Friday or Monday), then we can improve the travel times on the roads significantly. This will have a greater impact on traffic congestion, especially in the peak periods, than construction of new roads or changing the physical capacity of existing roads through transport management interventions.

This may be politically more palatable than some other initiatives, such as road pricing reform, which remains a challenge. There is no reason now to not take advantage of this new normal to contain congestion growth. Indeed, if we can reduce car traffic each day by about 10%, we should eliminate the worst of congestion, returning all times of the year to the levels of traffic generally experienced in school holidays, which is usually very acceptable to the travelling public.

Additionally, increased WFH also represents a significant opportunity to recoup some of the approximate $30 billion of lost time and productivity benefits due to congestion. This is an opportunity not to be foregone by industry and government, and offers a real opportunity for employers to show a commitment to sustainable goals, something many aspire to and very few ever get close to achieving. Indeed, the traditional view of business has been that they need to see the economic benefits that come from implementing sustainable mobility practices if they are to be convinced to adopt those practices. The increased productivity for many staff of WFH (discussed below) means that flexible working arrangements for employees are now seen as the principal mobility management tool¹.

With the field test component of this project complete, we should also use look to use WFH to benefit climate change, wellbeing, and infrastructure priority funding, enabling a greater amount of funding directed to essential services such as health services and care support.

Two scenarios

At least two scenarios are possible as we move out of restrictions:

• One, business as usual; or
• A significant change in the mobility framework as shared modes are less attractive and working from home takes on an increasingly popular status by both employees and employers (business not as usual).

We argue that the new normal offers opportunities never before achievable in terms of taming congestion on the roads and crowding on public transport, and that this opportunity should not be frittered away.

Scenario 1:

Travel will return to the pre-COVID-19 normal within a few months, with public transport, ride share, and private car use showing very similar levels of use, crowding, and congestion as before. This scenario assumes that WFH will have a limited impact..

The rationale is that, although the situation is somewhat fluid and the likely response is extremely uncertain, with Australia’s success compared to other countries in minimising exposure and transmission (‘flattening the curve’) there is a real possibility that normality might return quicker, with perceptions of risk dissipating at a fast rate.

Habit persistence is also a significant trait of human beings. Crowds, described as heaving at shopping precincts on Mother’s Day (10 May 2020) in Melbourne and Sydney, despite social distancing requirements in place, highlights this outcome.

Scenario 2:

One of the most important policy levers now available², in contrast to pre-COVID-19, is the effectiveness and growing acceptance of WFH. We have never had a real experiment of what might happen to the transport network in the presence of a growing interest in WFH.

One of Australia’s leading banks, the National Australia Bank (NAB), for example, is reporting a 15% increase in productivity associated with WFH since travel restrictions were instituted. 80% of NAB employees currently working from home would like to have the flexibility to work remotely in the future.

This evidence, and growing anecdotal evidence, together with the Beck and Hensher (2020) findings from a national survey, suggest the possibility of a noticeable shift to WFH and consequent changes in commuting (and non-commuting) travel demand. WFH will be encouraged while offices are required to practice social distancing and hence have to stagger working hours for staff, including the possibility of less days in the main office. with the balance as WFH.

Firms will be interested, as they can save on office space in the longer term. (although the aforementioned NAB has just invested in a huge premises at Redfern, near the Sydney CBD). Smaller firms may even shed expensive centrally located offices completely.

The preferred scenario

Scenario 2 is the one that we would like to see play out over the next 18 months, with employers supporting staggered working hours (even when there is no imposed external constraint to do so) for employees whose work aligns with this strategy, and also with the number of days working from home varying by negotiation. This is especially so where there is substantive evidence of no productivity loss, indeed it is desired that there would be productivity gain.

This is an opportunity for the sustainability charter of supporting mandating increased flexibility of office hours as a consequence of social distancing, which will oblige a number of businesses to introduce staggered working hours, and only requiring attendance at the office on an agreed number of days per week³. Many sectors already supported WFH pre-COVID-19, a prime example being the technology sector. Importantly, WFH has a strong chance of becoming a new⁴ policy lever to benefit the transport network⁵. In particular we do not want to return to the peak phenomenon, where we have excessive road congestion and public transport crowding⁶.

Governments need to not lose this opportunity, especially while social distancing is in place, assuming the anxiety around using public transport can be overcome fairly quickly⁷, to support a re-aligned network that also works for employers and employees and the wider community more broadly. Flattening the peaks has huge productivity benefits beyond passenger movements, with the freight distribution sector in particular gaining significant travel time savings and reduced costs of doing business. Some light goods movement can be picked up by underemployed Uber drivers, and also by community transport.

However, on the flip side, economies have been set up to support large movements of people from place of home and work with associated economies and businesses in existence to support this. A structural change to how people interact with their place of work and cities will mean some sectors of the economy will be significantly negatively impacted.

While this new normal is ambitious, it may just be achievable for the first time since the advent of the internal combustion engine. It will require a rethink of road user charges to ensure that the road network in particular does not deliver growing congestion through not only private car use, but also increased road freight vehicle activity. The position of the private car is dependent on the extent of WFH, the staggered daily commute times, and an in-place road user charge scheme.

This is a very important point, and the latter will be necessary to at least provide funding (in contrast to an efficient pricing model) to support the revenue loss from public transport⁸ (which typically only recovers 24% from the fare box) and other sources of mobility revenue loss, as well as supporting new initiatives in mobility investments (such as improved walking, cycling, and active transport infrastructure).

If governments desire to flatten the peaks, they may be prepared to offer tax relief to employers who arrange employer work hours in order to achieve this⁹, especially after social distancing is relaxed. This can be seen as a very relevant transport demand management (TDM) initiative. The benefits may well outweigh the additional costs to society of a return to congestion¹⁰ and crowding. However, counteracting this may well be a longer term saving in office space rental,¹¹ as fewer employees need to be in the one location at any point in time¹².

The new normal has implications on the pre-COVID-19 strategic model systems (e.g., Sydney Travel Model, and SEQ STM) which have been estimated and calibrated under network conditions typified by previous levels of traffic congestion on the roads and crowding on public transport. Will these models offer useful forecasts of travel demand under post-COVID-19 network conditions? It is unlikely, and so it is necessary to review existing models and develop a set of alternative models that can be estimated and calibrated under the new normal, where decisions around WFH and the extent to which it is adopted will need to be factored in.

For example a previously regular public transport user who switches to mainly WFH may become a car user for the 2 days per week they travel to their workplace; so there may be a role for fare incentives to ensure continued public transport use. This is an important consideration, as the incidence of increased WFH will likely have significant ramifications for future transport investment as levels of demand may vary dramatically from what was projected in a pre-COVID-19 world.

There may even be changes in residential location patterns consequent on the ability to work remotely and local office hubs being established. This requires data appropriate to the new normal, which has already been collected in two waves to date by the Institute of Transport and Logistics Studies, but which will require additional surveys as restrictions are met to identify a point in time when we can be confident that the new normal is a new equilibrium.

We propose to consider a number of alternative models that can be informed by the data from our ongoing surveys.

Project objectives

Through this project, the Institute of Transport and Logistics will use best endeavours to meet the following objectives:

1. Design a framework within which we can develop new statistical models to study the influences on the propensity to work from home and its implications on the amount travel by car and public transport, for commuting travel in particular.
2. Analyse data collected as Wave 1 (late March) and Wave 2 (late May) as a national survey to begin to identify the key influences on the probability of working from home a given number of days per week and what this means for weekly car and public transport travel. The influence of employees and employers is considered.

3. Use the experiences gained in waves 1 and 2 to design a series of ongoing waves (3 to 7) to continue to gain an understanding of how WFH and its impacts on travel demand is changing as restrictions are slowly lifted in the Covid-19 world, with an increased sample for South-East Queensland, and for New South Wales, distinguishing the Greater Sydney Metropolitan Area (GSMA) from Regional NSW.

4. Develop and refine relevant modelling options / frameworks as we obtain new data designed to track changes in WFH activity and commuting travel that can inform the actions to revise the strategic travel demand forecasting models for the Department of Transport and Main Roads Queensland (TMR), Department of Transport (WA), and Transport for NSW.
5. Consider changes required to non-commuting travel and reflect it in revised travel models.
6. Advise (recommend) TMR and Transport for NSW on the possible ways in making use of the findings for scenario testing by using their existing the travel demand modelling systems.
7. Potentially undertake an overall economic and demographic assessment on the impacts on changes from a commuter-based economy to a WFH based remote working economy.
8. Suggest, as a result of analysis over the waves, policy triggers for consideration across future transport priorities.

UPDATE: April 2021

The Institute of Transport and Logistics Studies have published a working paper, ITLS-WP-21-08, Insights into Working from Home in Australia in 2020: Positives, Negatives and the Potential for Future Benefits to Transport and Society, authored by Professor David Hensher and Matthew Beck. The working paper is downloadable via this link.

UPDATE: December 2022 – Project completed

This project has been completed, and we hope to make the final report available soon.

UPDATE APRIL 2023 – Final report available

The final report for this project is available for download at COVID and Working from Home: How has it impacted transport?