Mark Sinclair's blog: 13 August 2010 - Limits to congestion
13 August 2010
Mark Sinclair is boss of leasing firm Alphabet
We all enjoy the lack of competition for road space during the summer holidays but it seems the UK's roads are starting to get a little emptier anyway.
Government data show that the number of registered vehicles in the UK has declined in the past couple of years. The amount of driving has fallen too, as well as traffic congestion and the volume of petrol and diesel consumed.
None of these changes are huge as yet - or very surprising in a recession. Even so, they may also reflect longer-term trends in people's behaviour; changes that are being driven by changes in technology, lifestyles and the economy.
Teleconferencing and online shopping have lessened the need to make car journeys for business and household reasons. Social networking has replaced some of the physical "face time" that people used to spend with their families and friends.
It's not that cars have become any less important to people. What we're seeing is a response to influences such as environmental concerns and higher fuel prices. Owners are using their cars differently and, in many cases, a little less.
The only people who seem to be genuinely surprised by all this are the Government's own transport planners, who are sticking to their forecasts for greatly increased levels of traffic and congestion in the future.
Perhaps they share the modern disdain for the ideas of Thomas Malthus, the 18th century English cleric who questioned expectations of endless growth in his "Essay on the Principle of Population".
Malthus's work immediately sparked a heated debate between those who sided with his contention that resource constraints would eventually set limits on growth and those who believed that man's technological ingenuity would overcome every barrier to progress.
Two hundred years down the line, the match is deep into extra time and it's still a draw. We now know that population growth tends to tail off when countries attain a certain level of development. On the other hand, since science found new ways to turn fossil energy into higher crop yields, the global population and economy have reached heights that Malthus could never have imagined.
So spectacular has this growth been that economists who are wedded to neoclassical endogenous growth theory (and they are the ones who currently occupy most of the influential positions) have come to believe that believe that technology-enabled growth has essentially no limits.
That's one reason why our road planners are still working on blueprints for new motorways, road tolls and traffic management technology (e.g. variable speed limits and hard shoulder running) in order to accommodate the expected 30% surge in vehicles and traffic.
Of course, such growth is still theoretically possible. But it's also hard to ignore the signs that we may have reached some inflection points in energy costs, public attitudes to issues like debt and the environment, and technological alternatives to road travel.
If these shifts lead to changes in the way people use cars, then traffic volumes and road capacity may indeed be beginning to balance each other out.
For the UK, this implies a very different kind of road transport strategy - one that puts much more emphasis on tackling existing bottlenecks than on trying to predict and provide for projected growth.
For fleets, the message is more subtle.
On the face of it, fewer discretionary car users on the roads will mean more room for essential business drivers, which every business will doubtless welcome.
But there are also deeper implications for fleet policy makers. If the century-long upward trend in car ownership and traffic growth really is about to peak, then it seems to be a good time to think carefully about fleet issues.
For example, what if the current preoccupation with reducing fleet costs is not just a temporary phenomenon in response to recession but is in fact part of a long term adjustment towards a very different operating environment?
How might you need to change your approach to allocating vehicles? Are there better ways to leverage the attractiveness of car benefits across your business? Are employees and the company sharing the risks and rewards of car ownership fairly, or is one side taking all the rewards and the other all the risks?
There are already examples of major businesses moving to company-wide salary sacrifice schemes in order to benefit from their flexibility and their funding and tax benefits. More firms are using mileage audit systems to manage fuel and mileage costs and to capture valuable data to help them decide future fleet strategy.
The key point is that these fleets are looking at the bigger picture and trying to position themselves for the long term. After all, if the economy snaps back into shape next year, they'll have lost nothing. But if the reality turns out to be a 'muddle through' economy for the next few years, businesses with efficient and low cost car provision will have a clear competitive advantage over those that react more slowly to the deep seated changes we now seem to be experiencing.
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