Is Car-Free Growth the Next Great Business Opportunity?

Thursday, May 09, 2013

A blogger at the Harvard Business Review has made some predictions about the face of the 21st Century economy. The picture he paints is, as it happens, painted green...both in terms of emerging trends in sustainable, emission-free solutions and the money to be made in developing and supporting these solutions.

That means if you're a savvy business owner it's a great idea to take a look at car-free trends. According to author Alex Steffen:

"Auto emissions--their manufacture and tailpipe emissions, together with the emissions created by the infrastructure, land use, and businesses designed to support their use--make up the largest single source of greenhouse gasses in the United States.

But the solution to the problem of car emissions will not be found under the hood: even the best cars we can imagine would be unsustainable in the context of auto-dependent sprawls. That context, though, can change. Indeed, it already is changing, and rapidly.

Compact, walkable neighborhoods are in high demand now, and it's probably the best-proven finding in urban planning that dense communities use less energy on transportation and require fewer cars and less infrastructure to meet the needs of their residents. New housing growth that fills out existing communities, rather than creating more urban sprawl; investments in walkability; improvements to mass transit; all of these not only dramatically shift driving needs, they improve quality of life. Rebuilding cities will cut auto emissions much faster than technological innovation in the auto industry. And we're entering a city-building boom, both in the US and internationally. Climate, energy, and resource issues guarantee those cities will not work as they do today."

Some businesses have already made money from car-free trends. As the above-referenced post mentions, the ride-sharing service Zip Car (now owned by car rental service Avis) is one example of this.

But you don't have to start an innovative new business to benefit from the link between public transportation and the opportunity for profit. Some of the most traditional types of storefronts in the world, from restaurants to dentist's offices, can benefit from the expansion of public transportation services.

How can public transit increase your profits?

  • Public transportation creates more disposable income for families. The average American car owner spends $8776 per year per car on car payments, gas, car insurance, and car maintenance. What could your business accomplish if more people are free to spend a portion of that $8776 on your products or services instead?
  • More customers. An increase in public transportation services means that more people can get to your doorstep than ever before -- people for whom your establishment might previously have been out of reach. That means more sales and higher profits for you.
  • Better employees. You get a larger labor pool to choose from. There's also less absenteeism and turnover for businesses that are near public transportation options. A single vehicle is prone to breakdown and malfunction. It is not "reliable transportation." A well-run public transportation fleet is reliable transportation, since a broken down bus can be replaced with another bus from the fleet with relative ease.

Of course, if you are in the business of selling cars or car services you'd have to find other ways to adapt and grow in the 21st century economy, just like the guy who sold horses and horseshoes at the beginning of the 20th. But if you are in any other business there are profits to be made should you choose to add your voice to others who are choosing to advocate for better, more expansive public transportation services for their communities.