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Benefits and Costs of Travel Demand Management Plans

Developing and implementing a plan to manage travel to and from universities has both benefits and costs. A benefit-cost appraisal provides persuasive evidence that the benefits outweigh the costs, by demonstrating the high costs of catering for car demand and the potential cost reductions possible by redistributing this demand to other travel modes. This helps to provide justification for proposals and is important in convincing management and funding providers a TDM plan can deliver economic benefits to the university and the wider community.

The benefits from TDM plans include considerable cost savings where a university decides to discontinue catering for car travel. Benefits typically also include reduced costs for provision of car parking, improved local air quality and health benefits to students and staff, as well as the marketing edge of a sustainable, accessible and equitable university environment.

The costs resulting from planning and implementation of TDM will vary between universities depending on the potential for mode shifting, the availability of existing infrastructure, costs for providing new infrastructure, and the extent to which outside funding can be secured. Some costs and benefits may be incurred directly by the university such as those related to the cost of car parking, while other costs may be shared with other stakeholders (e.g. a new bus service), while others may occur as indirect costs and benefits, e.g. reduced air pollution and noise.

How to assess benefits and costs

Table 1 summarises the overall framework for assessment of benefits and costs. This is a guide only, and should be verified in each location. You are urged to make use of expert resources in transport and traffic planning, economics, urban planning and other relevant disciplines available within the university community to assist in preparing benefit-cost appraisals for their particular circumstances and proposals. Costs and benefits will vary from one location to another, reflecting the infrastructure requirements of each university campus and the local cost of materials, labour and construction. Similarly the magnitude of benefits will vary in response to the local economic factors.

To estimate the net benefit from a proposed scheme, calculate the individual benefits and costs shown below and sum, i.e. Net Benefit = (B1 + B2 + B3) - (C1 + C2). Care must be taken to avoid double counting or counting one-off costs as annual costs or annual costs as only one-off costs.

If the proposed term of the scheme is envisaged as say 10 years, it is necessary to 'discount' the stream of annual benefits and costs over this term of years by the 'social time preference' approximately equal to the rate received on cash bank deposits, say 4% in 2003. Benefits or costs received or incurred in equal annual amounts of say $10,000 over ten years will have a present value (viewed from year 0) of $81,000, not $100,000, because dollars received in future years are worth less than dollars received now. Where benefits and costs are incurred in unequal amounts per year (e.g. lumpy up-front costs or increasing benefits in future years), the effect of discounting must be calculated, and can significantly affect the balance between total future benefits and costs.

As shown in Table 1, in addition to the benefits afforded to the university, it is also possible to calculate 'Private User Benefits' and benefits for the wider community.

Table 1: Guidelines for Benefit-Cost Appraisal of a University TDM Plan
B1. Financial Costs Avoided by University:
Type of Cost Avoided Cost avoided or benefit gained Calculating the cost or benefit Typical Value
Car Parking Capital expenditure on multi-storey car parking. These may be large. Annualised cost (capital repayments and interest - real or implied) Annualised cost of initial outlay of $20,000 / car space
Land for car parking (where car parking is out-of-doors at ground level) Opportunity cost of land. Potentially medium/large. Annualised cost of land valuation that must be purchased or leased for other activities Depends on value of land
Parking maintenance Annual cost of maintaining and providing security in multi-storey or at-ground parking facilities. Potentially large. Average annual cost per parking bay $100/bay p.a.
Reduced staff sick leave Reduction in lost productivity resulting from more physical activity by staff and students Each staff member avoids 1 day / year lost time; say 10% take up TDM scheme $200 / day / person X 10%
B2. Financial Costs avoided by travellers:
Car travel Cost of fuel, vehicle maintenance, insurance & depreciation on motor vehicles used for travel to and from university. For students & staff potentially medium/large Unit cost per passenger-km, based on average occupancy and average cost per vehicle-km $0.6655 /km
Accident costs avoided Cost of road trauma, fatalities and property damage from road crashes avoided, as a result of fewer veh-km. Unit cost per pass-km. $0.09 /km /per capita
B3. Costs avoided by the Community:
These are frequently difficult to quantify. For a university estimating its own net financial benefit from TDM, it is likely very little weight will be given to these 'external' benefits. Estimates of these benefits also vary widely in the literature, but we have provided some guidance for those wishing to use these to bolster their case for TDM)
Reduced Greenhouse Gas emissions (GHG) The avoided cost of government programs for GHG abatement Net present value of average cost per vehicle-km 2/veh-km (some studies put these costs as high as 17.22 gross (i.e. without taking account of changes in road use if this amount were included in the price charged for road use)
Reduced local air quality degradation Health system costs avoided by reduced exposure to air pollution Average net present value per veh-km of cost of related respiratory and cardiovascular hospital admissions 0.54/veh-km
Avoided costs of insufficient personal physical activity Health system costs avoided Average net present value of avoided hostile admissions for life-style diseases Reliable estimates per veh-km or person-hr not available
Avoided community costs of traffic noise Avoided effects on health (eg elevated blood pressure and minor psychiatric illness), & less clear effects on urban amenity   Up to 0.5 / veh-km
Foregone revenue from visitor parking charges Forgone revenue from typical high-turnover visitor car park Approx $1.50/hr; 2.5 cars per space per day; 3 hrs occupancy /veh. $11.25 / bay / day
Foregone parking permit revenue - staff Forgone revenue. Some staff will purchase permits for occasional use, so even though they are users of TDM strategies, the revenue from this source will not be lost   $100 / permit p.a. (applicable rate for use in appraisal will vary between universities and car park 'level')
Foregone parking permit revenue - students Forgone revenue. Some students will purchase permits for occasional use, so even though they are users of TDM strategies, the revenue from this source will not be lost   $90 / permit p.a. (applicable rate for use in appraisal will vary between universities and car park 'level')
C2. Costs of Travel plan - typical one-off and annual costs (must be verified for local situation)
Conduct travel demand survey (one-off initial cost only) $8,000
Introduce and manage car pooling scheme and review after 12 months $5,000 p.a.
Operate shuttle bus service $250,000 p.a.
Publish and distribute Access Guide (one-off initial cost only) $25,000
On-going information and advertising program $10,000 p.a.
Provide additional bike bays (one-off initial cost only) $120/bay
Install bike lockers in end-of trip areas (one-off initial cost only) $400 per bike
Install showers in new building with dedicated hot water (one-off initial cost only) $6000 per shower
Build new share paths (one-off initial cost) $80/linear metre
Employ TravelSmart Officer (varies by location) $45,000 p.a.

In a recent example shown in Table 2, the TravelSmart initiative in South Perth, Western Australia demonstrated a private user benefit of $2.54 million for the 35,000 people participating. This is equivalent to a saving of approximately $76 per person/annum.

Research by ARRB Ltd (ARRB 2002) sets out the benefits to the wider community including financial gains to the State in revenue from conversions of car trips to public transport; annual health service cost savings due to the improved health and fitness of the community through exercise and reduced air pollution; reduction in costs of road building through a reduced rate of traffic growth.

Table 2: South Perth TravelSmart - Private User Benefits and Costs
Benefits and Costs Value (a negative value is a cost reduction)
Private vehicle operating costs -$3.53m
Public transport fares +$0.62m
Cycling costs +$0.05m
Walking costs Not estimated
Health and Fitness -$0.58m
Perceived cycle/walk injury risk +$0.90m

Challenges to sustainable transport in Universities

Universities face particular challenges in moving towards more sustainable transport solutions. There are several factors which impact on university travel patterns. In order to get a comprehensive solution, each of the following factors should be addressed in a TDM Plan.

Geographical location of the University

Travel patterns generated by a university are affected by its location. The surrounding land use and transport resources contribute to the transport choices available:

City centres campuses usually have limited on-site parking, and little space for its expansion. Conversely, city campuses usually have better access to public transport and infrastructure for walking and cycling. As a result it is normal for travel to city campuses to rely more on non-car and non-motorised transport.

Suburban campuses are usually well serviced by roads (including road-based public transport) but may be inadequately served by rail. Roads near suburban campuses often carry high peak traffic volumes, discouraging pedestrians and cyclists and delaying bus services, affecting transport choices. Public transport services may be limited by lack of patronage outside peak periods.

Regional or rural campuses are usually well serviced by roads, have ample car parking available and (usually) access to sufficient land to meet foreseeable parking demand. However, travel distances are generally longer and infrastructure for walking and cycling to and from campus are limited.

Campus facilities

Staff and students who stop en-route to university during car-based trips for shopping and other personal business, discourages the use of public transport or non-motorised modes for commuting (Department for Transport 2002a). On site facilities including cafes, convenience shops, post office and banking can reduce the need to for car travel.


Distance is a deterrent to non-motorised travel and is cited as the reason people do not walk or cycle to university (Poinsatte & Toor 1999; University of Western Australia 2003). As distance of residence from the university increases, the proportion of people walking and cycling declines. Poor amenity along pedestrian and cyclist routes can also be discouraging. Visually interesting routes, with low traffic volumes and reduced traffic speeds can be important for encouraging walking to university (Poinsatte & Toor 1999).

Car pooling is also affected by distance. It is made less attractive by long deviations to drop off or collect passengers (Curtis & James 1998).


The availability of free or cheap and plentiful parking within university sites and on surrounding streets is a significant challenge to reducing car travel. More universities are charging staff and students for parking on university grounds, but these charges are often low.

Free parking in nearby streets limits the impact of parking restraints. The success of parking controls depends on appropriate management of off-site parking in addition to on-site restrictions. This may require cooperation with local authorities and residents.

Contra flow cycle lane
Parking restrictions at
aged persons residence
- Curtin University at rear

Some universities have parking permit systems for staff and students. These systems are usually aimed at covering some of the costs of maintenance of parking infrastructure, not at travel management. This reflects that once a parking permit has been purchased, the marginal daily cost of parking is zero (Poinsatte & Toor 1999; Department for Transport 2002a).

'Pay per day' charging schemes are a daily reminder of the cost of car parking, and discourage its regular use (Department for Transport 2002a), particularly where charges are higher than the cost of an all-day public transport ticket.

Convenience of parking to the destination compared with the inconvenient location of public transport stops also contributes to the attraction of car travel (Poinsatte & Toor 1999). Car parking located within university grounds is often a short and convenient walking distance, but public transport stops may be located on the periphery of university campuses and in some cases one stop services a whole site.

Public transport

Infrequent public transport and inadequate service coverage are deterrents to public transport use. Services every 15 minutes or less are considered to offer flexibility comparable to a car (Estill and Associates and Department of Transport 2003), but must be available to patrons from close to home locations.

Lack of traffic priority for public transport in the surrounding transport network also deters to its use, if travel times are increased. Late buses and long journey times created much dissatisfaction amongst patrons at the University of NSW and contributed to the poor opinion of bus services at that University (Black, Mason & Stanley 1999).

Walking and cycling

Several obstacles discourage greater use of walking and cycling for staff and students residing within suitable distance from the university. Obstacles include the absence of safe crossings over busy roads, bike lanes that end at roundabouts, on-road cycling on heavily trafficked roads, lack of shared paths and inadequate bicycle parking. (Poinsatte & Toor 1999; University of Western Australia 2003).

Roundabout entrance to Curtin University
On-Road bike lane ends at
roundabout entrance to
Curtin University
Poor pedestrian access
Poor pedestrian access linking student
accommodation to campus across
main access road to Curtin
University (speed limit 70kph)

Transport integration

Lack of integration of transport modes to facilitate inter-modal transfers is a challenge. Most Australian transport services do not provide for bike-bus or bike-train journeys. By integrating these forms of transport the potential catchments for public transport can be significantly enlarged.

The Western Australian Public Transport Authority has 'counter-flow' allowances for bikes on trains at peak times, and allows bikes on trains in any travelling direction outside peak hours (Department for Planning and Infrastructure 2003). Counter-flow travel allows cyclists to take their bikes onto trains travelling in the opposite direction to the peak during the 7 - 9 am and 4.30 - 6.30 pm peak periods. There is no charge for travelling with a bike on Perth trains, presenting an opportunity for universities in Perth to promote cost effective multi-modal travel to staff and students.

Similar initiatives are required for bus travel that will enable bikes to be taken on buses, as is the case in Canada and some areas of the USA. Brisbane is trialling a bus scheme between November 2002 and October 2003.

Policy and Practice Constraints

Some challenges to adopting sustainable transport practice lie in the policy and practice of universities:

Timetables and Schedules: A daily 13-hour teaching window creates variance in individuals' daily schedules and different schedules between individuals makes shared transport logistically difficult (Kaufman n.d.).

Car use incentives: Incentives to staff for car use including salary packaging of cars, which offers a financial incentive for extensive car use from fringe benefit tax rate reductions in line with increased annual vehicle mileage (Bureau of Transport and Regional Economics 2002; Curtin University 2003b), not matched by similar benefits for travel on other modes (Bureau of Transport and Regional Economics 2002).

Parking incentives: Student Guilds may offer financial incentives to students through parking permit subsidisation, e.g. free permits offered as prizes during orientation week (Curtin University 2003a). This promotes the use of car transport to and weakens the potential for financial levers to favour sustainable modes.

Information: Lack of information about non-car modes presents another challenge to the use of these modes. Surveys have found that providing personalised public transport timetables, and maps of public transport and cycling routes is successful in encouraging a switch to these modes (Socialdata Australia 2000; University of Western Australia 2003).

Lifestyle/preference choice of the individual: Lifestyle barriers related to household and carer responsibilities are more common to staff and postgraduates (Oxford Brookes University 1999). 'Taste' preference is common to undergraduates, evident in the desire to avoid unfashionable compulsory helmets and therefore not cycling (University of Western Australia 2003).