Understanding Changes in Demographics, Preferences, and Markets for Public Transportation (2018)

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7 Transit managers, planners, and stakeholders need to understand how multiple future factors might influence the nature of demand for transit services in North America. For this study, TCRP Research Report 201: Understanding Changes in Demographics, Preferences, and Markets for Public Transportation, the research team created a set of future scenarios for transit markets to understand how shifts in demographics, attitudes, and levels of service might affect demand for transit. The study focuses primarily on factors beyond travel times and costs (supply characteristics) and seeks to improve the understanding of the background conditions that affect market behavior. The relationship between market demand, supply, and ridership is diagrammed in Figure 1. The research incorporated differing assumptions about demographics, transit orien- tation of the neighborhood, and market-based preferences, including values and attitudes. All three elements would be needed to support the development and analysis of alternative scenarios for the future of the transit industry in North America. All three elements are also needed to better understand the possible impacts of technology-based services such as trans- portation network companies (TNCs) in both the complementary and the competitive role with transit ridership. Research Approach Research has established that transit use is influenced by the urban form of the neighbor- hood, the demographics of the user, and the values and preferences of the user. These factors influence user mode choice through their relative times and costs. All three forces are inter- related when it comes to transit use—one’s values influence the choice of residential neigh- borhood, and the characteristics of that neighborhood and the service options available there influence short-term attitudes about taking transit. These factors cannot be fully untangled, but this study attempted to look at the effects of each factor separately to the extent possible. Additionally, patterns of travel are influenced by age and membership in a cohort of travelers. Cohorts retain some level of consistency as they age. The project has several implications for transit policy makers. For one, a critical market group presently consuming transit at high rates will soon see a sharp decline in its transit use: proactive policies must be developed to deal with this potential outcome. The project used data from a 2014 survey of 11,000 residents in 46 metropolitan areas undertaken by RSG for TransitCenter (hereafter referred to as the “2014 TransitCenter survey”) (TransitCenter 2014) and a new survey of 3,500 residents in 24 metropolitan areas undertaken by RSG in 2016 for TCRP Project H-51 (hereafter referred to as the “2016 TCRP survey”), C H A P T E R 1 Eight Major Findings and Policy Implications

8 Understanding Changes in Demographics, Preferences, and Markets for Public Transportation which is the subject of this report. In addition, members of the research team have leveraged extensive personal experience in interpreting the NHTS results of the past several decades. This chapter covers eight major findings from the project: 1. Demographic factors are critical for predicting future markets for transit. 2. Location is critical for predicting the future markets for transit. 3. Market-based preferences are critical for predicting the future markets for transit. 4. Age, preferences, and location together affected changes over the past decade. 5. Age, preferences, and location together explain expected changes for the future. 6. Transit level of service is more important than having a population that is pro-transit. 7. TNCs will offer more competition. 8. The results of the study have strong implications for the leaders of the transit community. The research team created seven technical appendices to accompany this report. These appendices include a bibliography and literature review and additional information on the subjects covered in Chapters 2 through 7 of the report: • Technical Appendix 1. Literature Review and Project Bibliography, • Technical Appendix 2. Demographics in Support of Chapter 2, • Technical Appendix 3. Geography and Neighborhood Type in Support of Chapter 3, • Technical Appendix 4. Survey and Market Segmentation in Support of Chapter 4, • Technical Appendix 5. Analysis of Preference in Support of Chapter 5, • Technical Appendix 6. Integrated Behavioral Modeling in Support of Chapter 6, and • Technical Appendix 7. Information and Communications Technology in Support of Chapter 7. These appendices are not printed herein but can be downloaded from the TRB website (trb.org) by searching for “TCRP Research Report 201”. Major Finding 1. Demographic Factors Are Critical for Predicting Future Markets for Transit The relationship of some demographic and geographic factors within transit markets is more direct than that of other factors. Nevertheless, these factors are critical for predicting transit markets. Figure 1. Factors affecting transit use: this study focused primarily on the underlying market factors shown in the pie chart on the left.

Eight Major Findings and Policy Implications 9 Age and Transit Ridership Age provides the most consistent reference point for the analysis of how the demographics of the traveler affect travel preferences, characteristics of the traveler’s residential location, and the modes available for a specific trip. Chapter 2 explores this topic in greater detail and examines age as an organizing factor among many interrelated factors that affect transit use in North America. The chapter reveals the strong role age plays in explaining transit mode share and the much weaker role of gender. Younger people consume more public transportation services and older people consume fewer. The role of gender is less clear. Gender per se is not an effective predictor of propensity to use transit, but men tend to take more rail transit trips than women. On the other hand, differences exist between men and women in their attitudes and preferences concerning home location, tolerance for sharing space, and feelings of inde- pendence from the private automobile. These differences are explored throughout this report. Age and Demographic Shift This study concludes that there will be a major demographic shift that could affect the makeup of the transit market over the next three decades. Demographic analysis reveals that the millennial generation is now the largest single age-based component of the United States popu- lation. As of 2010 (the best census year for comparison with the results of the 2009 NHTS), there were 1 million more millennials in the United States than baby boomers; it is forecast that by 2030, there will be 22 million more millennials than baby boomers (McGuckin and Lynott 2012). In 20 years, a cohort now in an age bracket roughly between 15 and 35 will be in an age bracket between 35 and 55. Role of Age Over a Two-Decade Period While transit trip rates grew solidly in the nearly two decades between the 1990 NHTS and the 2009 NHTS, the age groups showed different growth rates. In the 2009 data, those under 25 used transit at about the same rate as those in that age group two decades earlier: all the other age groups registered significant increases in their rates of transit trip making. Importantly, rates of transit use of individuals between the ages of 25 and 34 in 2009 were almost as high as those of the youngest age group (those under 25). This study revealed new insights on issues potentially affecting the future of public trans- portation in the United States. Many factors have historically driven transit use; the most informative factor is age. The youngest age group (those under 25) has the highest rate of transit use and often has the highest propensity to hold pro-urban attitudes and preferences. Both Figure 2 and Figure 3 demonstrate that transit use decreases with increasing age. Whether millennials can maintain their historically high transit use is a key future question. This research has documented something more complicated: the transit-riding behavior of the 16- to 24-year-old age group is no different from the behavior of past cohorts when in that age group. Transit use at this age is high, but that is no different from the pattern of the past 25 years. However, those aged 25 to 34 in 2009 were using transit at a far greater rate than those in that age group in the base year of 1990. In other words, this cohort continued the high transit use patterns of their youth as they proceeded into their late twenties and early thirties. In addition, those aged 35 to 55 were using transit at a far greater rate than their historical predecessors. The extent to which the high rates of transit for the younger age groups can be partially maintained as the cohorts age is unknown. However, those who were between the ages of 35 and 55 at the time of the 2009 NHTS used transit considerably more often than those who were between 35 and 55 at the time of the 1990 NHTS. Notwithstanding the effects of migration, this finding implies that at least one cohort retained a certain level of transit orientation as

10 Understanding Changes in Demographics, Preferences, and Markets for Public Transportation it aged. This cohort’s experience touches on the central research question: to what extent will those in the 25- to 34-year-old age group continue their current level of transit orientation? The research found that while fundamental attitudes supportive of urbanism will continue, pressures to find appropriate housing will result in some of these pro-transit individuals living in locations much less supportive of transit use. Race and Ethnicity and Transit Ridership Demographic factors have powerful and consistent implications for attitudes toward and use of public transportation. Transit riders are more diverse than they were previously—now nearly evenly split nationwide among white, African-American, and Hispanic riders. Chapter 2 describes how nonwhite populations have higher rates of transit use than white populations for every transit mode and for walking/biking. Hispanic populations also have higher transit use than non-Hispanics for every transit mode and for walking/biking. The project also reviewed the extent to which transit use by Hispanics might be attributable to confounding factors such as income and exposure to better transit services rather than to race and ethnicity. Source: TransitCenter 2014. 0 2 4 6 8 10 12 14 16 18 18–24 P er ce nt ag e 25–34 35–49 50–64 65 Male Female Millennial Gen X Boomer Older Figure 2. Transit share of all trips in metropolitan areas by age and gender. Source: 1990 and 2009 NHTS. 0 5 10 15 20 25 30 35 40 45 50 16–24 25–34 35–55 >55 T ra ns it T rip s pe r C ap ita Age Group 1990 Transit 2009 Transit Figure 3. Annual transit trips per capita, 1990 compared with 2009.

Eight Major Findings and Policy Implications 11 Figure 4 shows that there is a wide difference between the propensity of Hispanics and non-Hispanics to take transit at all income levels. However, the research team found that this difference is not attributable to differing levels of transit service quality within residential neigh- borhoods. Hispanics use transit more than others at all levels of transit quality, which rebuts the argument that the higher rates might be attributable to their residential location relative to high-quality transit services, as discussed further in Chapter 2. Effect on Transit Use of Being Born Outside the United States The travel behavior of those who migrated from other countries reflects acculturation in which initial patterns are (eventually) replaced by patterns more influenced by the new community. Recent immigrants are less likely to have an automobile when they arrive, but the difference in auto availability decreases over time via acculturation. Impact of Other Demographic Variables on Transit Use The impact of socioeconomic variables such as income level is twofold. First, greater dis- posable income facilitates more travel. Second, greater income also allows for more selectivity in turning away from transit and toward driving. Other variables, such as education level, are highly intertwined with other factors and often difficult to sort out. Major Finding 2. Location Is Critical for Predicting Future Markets for Transit Knowing where people live is essential to understanding how much they choose transit today and how much they might choose it in the future under various scenarios tested in this study. The way in which geographic factors interact with propensity to use transit is explored in some detail in Chapter 3. Transit Use by Region The quality of transit services offered varies by region, and the quality of transit accessi- bility affects transit demand. Analysis undertaken in the 2014 TransitCenter survey showed that six American cities—New York, Philadelphia, Boston, Chicago, San Francisco, and Source: TransitCenter 2014. P er ce nt ag e Figure 4. Higher transit mode share by Hispanics not a function of income level. Knowing where people live is essential to under standing how much they choose transit today and how much they might choose it in the future.

12 Understanding Changes in Demographics, Preferences, and Markets for Public Transportation Washington, D.C.—had high and well-established transit ridership. These cities are categorized as “traditional cities.” Beyond these cities, substantial variation by region was found. Figure 5 shows that region explains some variation in propensity to use transit. For example, among those between 25 and 34 years old, 40% of those living in traditional cities used transit at least once a week, compared with only 15% in the Midwest. However, the study found that this variation in transit use was attributable to other factors, most of which reflect that the level of transit accessibility offered in the traditional cities is significantly higher than that in the Midwest, for example (see Chapter 7). Thus, there is no southern factor or northwestern factor for transit. This, in turn, suggests that the question of migration between regions can best be interpreted on its face value; individuals moving from an area with better transit to an area with worse transit decrease their transit ridership. Region size is important, but its role is changing. This research found that the greatest rate of increase in transit ridership between 1995 and 2009 was not in the largest urban areas (e.g., New York City) but rather the midsized metropolitan areas. The highest rates of increase were seen in those metropolitan areas with populations between 500,000 and 3 million people. In some cases, but not all, these were areas in which new investments in capital facilities had occurred. Areas with populations between 1 and 3 million grew an impressive 45%, while those with populations greater than 3 million grew only about 10%; in the 2010 census, there were more than 30 metropolitan regions in the smaller population category. Quite simply, the increase in transit use does not all stem from New York City, Chicago, and San Francisco. Transit Use by Residential Neighborhood Type The nature of neighborhoods has a strong impact on transit ridership; neighborhoods with higher-density and more pedestrian-oriented design tend to support higher levels of transit ser- vices. The combination of such land use patterns and a higher level of transit service is referred to in this report as being “transit-oriented.” The transit orientation of a residential neighbor- hood can be categorized by the extent to which it supports transit ridership, as demonstrated in a Smart Location Database research effort by EPA (EPA 2014). Researchers in that program developed a new evaluative metric that takes the form of the ratio of transit accessibility divided by highway accessibility, with the number of jobs within a given travel time as the metric for each. The overall transit orientation of any area can be characterized with this transit–highway Source: TransitCenter 2014. T ra ns it U se O nc e P er W ee k (% ) 0 10 20 30 40 50 60 Traditional Cities West Coast South West/Southwest Midwest 18–24 25–34 35–49 50–64 65 Figure 5. Transit use by age group and region.

Eight Major Findings and Policy Implications 13 ratio (as shown in Figure 6)—a method its developers report can stand as a surrogate for tradi- tional indexes such as density, diversity, and design. Consistent with expectations, the 2014 TransitCenter survey of 42 metropolitan areas found that 23% of trips were made by transit in the neighborhoods with the highest transit–highway accessibility ratio; just 3% of trips were made by transit in neighborhoods with the lowest level of accessibility. Clearly, the nature of the neighborhood in which one lives is a key factor in understanding transit use. Transit Use by Employment Location The transit orientation of employment location is more difficult to draw conclusions from. Chapter 3 demonstrates that the pattern of job-location moving to the suburbs over the past few decades has been detrimental to transit. On the other hand, geographic experts have been documenting an evident return to highly urbanized downtown areas in the past few years by certain employer categories. The extent to which this pattern reverses a long-dominant trend of decentralization of jobs overall remains to be seen. Major Finding 3. Market-Based Preferences Are Critical for Understanding Present and Future Orientation Toward Transit This study defined four separate market segments of respondents in the 2016 TCRP survey conducted for the study. The segments were defined by their attitudes and preferences, ranging from those with attitudes supportive of transit to those with attitudes opposed to transit. These four groupings of survey respondents and the process used to derive them, are described in more detail in Chapter 4. The research revealed the attitudes of various demographic market groups toward several key issues. Highlights of those findings are as follows: Attitudes about urbanism: • Those under 35 years of age were more likely than those in the older age groups to report that it was important to them to live in a neighborhood with ethnic diversity and shops and restaurants within walking distance. • Millennials were more likely than any other group to prefer to live in the city. Source: TransitCenter 2014. 0 5 10 15 20 25 Highest Ratio Mid-Level Lowest Ratio Transit/Highway Accessibility T ra ns it M od e S ha re ( % ) Figure 6. Effect of neighborhood type on transit mode share.

14 Understanding Changes in Demographics, Preferences, and Markets for Public Transportation • Over the past 12 years, the percentage of those under 35 who would prefer to live in a big city increased significantly, with nearly 40% stating that preference in the 2016 TCRP survey; the remaining 60% were divided across a set of less urban options. • About 60% of millennials stated they would prefer to live in the suburbs in the 2014 TransitCenter survey, which used a somewhat different set of location options. • Most millennials indicated wanting to live in a bigger house and were more willing than those in other age groups to drive longer distances to get to their destination; the same was true for Hispanics, nonwhites, and those who had not attended college. Attitudes toward auto dependence: • The under-35 age group stated the belief that they were less dependent on cars than their parents. • The younger age groups were far more open to sharing a vehicle than were the older groups. • Those under 25 reported using a friend’s car at four times the rate of older groups. Attitudes toward the environment: • Millennials were more likely to express environmental optimism and reported that this would influence their choice of mode. • Conversely, millennials were less likely to want to raise taxes to fix environmental problems. Attitudes about safety and privacy: • Millennials were more likely to be concerned about the lack of privacy on transit and about having to travel with people they did not know when using transit. • Millennials were more likely to express fear about crime on transit, a concern shared with women, Hispanics, nonwhites, and those with lower incomes. Perception of normative influences: The results of several analyses in this report suggest that normative support (friends and family) for transit is a key factor in encouraging transit use. Both of the younger age groups indicated that, while their friends and family did not typically use transit, they would approve of the respondent taking transit. Attitudes about improvement to transit: If improvements to transit were implemented, those most likely to state they would increase transit use were those with full-time employment and college degrees, Hispanics, nonwhites, and the foreign born. Attitudes about the need for information: • Millennials were vastly more likely to report that their cell phone would be the most difficult possession to live without (as opposed to a vehicle or computer, for example); 50% of the youngest age group gave this response, compared with 10% of those over 65. • Millennials—female millennials in particular—were more likely to report they were “not sure I know how to do all the things to make a bus or train trip work” than were those 35 years or older, with about 50% of millennial females agreeing compared with 32% of males 35 years or older. Major Finding 4. How Age and Preferences Affect Location Trends in Preferences for City Type In a survey undertaken by the research team in 2004 as part of TCRP Project H-31 [see TCRP Report 123: Understanding How Individuals Make Travel and Location Decisions: Implications for Public Transportation (Karash et al. 2008)] and in the 2016 TCRP survey conducted for TCRP

Eight Major Findings and Policy Implications 15 Project H-51, whose findings are the subject of the current report, respondents were asked to choose between a preference for a big city, small city, suburb, small town, or rural area. The research quantitatively documented that the preference for living in a big city increased over the 12-year period between 2004 and 2016 with little variation by age group. Figure 7 shows that over the 12-year period, each of the age groups increased its level of preference for the big city, with the highest rate of increase experienced in the 25–34 age group. Further results for this 12-year period presented in Chapter 5 show increasing preference for the small city and decreasing preference for the suburbs. With regard to the preference for the big city, the increase over the decade for those under age 35 was almost entirely attributable to the 25–34 age group, whose level of preference rose by a ratio of about 1.3 to 1 (i.e., the percentage preferring rose by a factor of 30%). The modest increase in preference for the big city, even among the older groups, is clearly consistent with the conclusion that these results reveal a general increase in the preference for urbanism between 2004 and 2016. Trends in Preferences for Home Characteristics by Age In a parallel attempt to elicit preferences about the type of home, the 2016 TCRP survey repeated the same question used in the 2004 TCRP survey: Suppose you have a choice between two similarly priced homes: 1. An urban townhouse within walking distance of stores and public transportation or 2. A house in the suburbs where you need to drive to get to most places. Figure 8 shows an increase over time in the percentage of the sample preferring the urban townhouse over the house in the suburbs for age groups under 65. Again, the change between 2004 and 2016 was strongest for the 25–34 age group, whose preference for the townhouse increased from 45% to 61% (a ratio of 1.4 to 1)—a greater rate of increase than seen in the youngest age group, whose preference for the townhouse grew from 63% to 69% (a ratio of 1.1 to 1). This finding supports the observation that the preference for a more urban home setting seemed to be increasing between 2004 and 2016, particularly for those under 35; within that age group, the greatest rate of increase was seen among those between 25 and 34 years of age. It is also interesting that support for the urban context as expressed by the type of house (Figure 8) is so much higher than when expressed as the big city (Figure 7). Source: 2004 and 2016 TCRP surveys. P re fe re nc e fo r “B ig C ity ” (% ) 0 10 20 30 40 50 21–24 25–34 35–49 50–65 2004 2016 Figure 7. Percentage reporting a preference for “big city” in 2004 compared with 2016, by age group.

16 Understanding Changes in Demographics, Preferences, and Markets for Public Transportation Present Preferences for Urban Locations As noted, over the decade, support for the most urban condition has grown. In the 2016 TCRP survey, around 40% of those under 35 reported that they preferred the “big city” option, while the other 60% of this group reported preference for small cities, the suburbs, small towns, or rural locations (five options offered). The 2014 TransitCenter survey asked respondents to choose their ideal location from only three options: urban, suburban, or rural; both those under and those over the age of 35 years expressed a clear preference for the suburban category over the other two options. Figure 9 shows the preferences of two age groups for the three types of location. While the trend over the Source: 2004 and 2016 TCRP surveys. P re fe re nc e fo r U rb an H ou se C ha ra ct er is tic s (% ) 0 10 20 30 40 50 60 70 80 21–24 25–34 35–49 50–65 2004 2016 Figure 8. Preference for urban house characteristics, 2004 versus 2016, by age group. 0 10 20 30 40 50 60 70 80 Urban Suburban Rural Location Category P re fe re nc e fo r Lo ca tio n (% ) Millennial Older Group Source: TransitCenter 2014. Figure 9. Preference for location, millennials versus older group. Suburban locations were preferred over both urban and rural locations for both age groups (2014).

Eight Major Findings and Policy Implications 17 decade is clearly improving for the most urban condition, most people in both surveys preferred less-urban options when given the choice. Are the Reasons for Choosing a Home Location Changing? Chapter 5 reports that the major considerations involved in the choice of the home location have not changed much at all, with little variation seen over the 12-year period between the surveys undertaken for TCRP Projects H-31 (TCRP Report 123) and H-51 (TCRP Research Report 201, the current report). In both years, the rank order of the three most important reasons were (1) price of the home, (2) minimization of commute distance, and (3) types of homes available. All three of these reflect the well-documented trade-off between wanting to minimize commute distance while desiring the variety of home and price combinations that increased distance provides. While some respondents did choose “within walking distance to stores” and “close to public transportation” as their primary reason for their choice of home location, both reasons ranked far lower than the top three in both survey years. Major Finding 5. How Age, Preferences, and Location Explain Expected Changes for the Future Age and Personal Expectations for Future Behavior This study explored the concept that transit use is affected by several factors. Such factors are the backdrop against which the user chooses between immediately available modes on the basis of their relative times and costs. Importantly, these factors will again come into play when the individual enters a new life phase and chooses a new home location. What Do They Expect to Happen in Their Lives? Given the conclusion that there has been something of a shift in preferences and attitudes toward urbanism (most consistently among the 25- to 34-year-old cohort of millennials), how do the members of the 2016 TCRP survey sample expect that they will change their behavior over the next decade? As explored further in Chapter 5 of this report, the present research shows that the clear majority of those under 35 expect major events such as marriage and child-rearing to occur, while the majority of those over 35 have moved on to deal with other expectations, such as becoming an empty-nester and retiring. Desires for Future Home Location In the next phase of an individual’s life, preferences for future home locations are influenced by age and by psychographic grouping (i.e., market segment). In the 2004 and 2016 TCRP sur- veys, the research found that most of the primary reasons for choice of residential location involved the trade-off between wanting to minimize commute distance and the home–price combinations that increased distance would provide. That is, the individual chooses the next home location in a high-stakes trade-off between desired attributes (short commuting distances) and constraining realities (price for a given set of home features). What Will They Do in the Future? At the time of the survey more than 50% of the millen- nials in the sample lived in cities versus less than 40% of the respondents in the older age groups. When respondents looked 10 years into the future, fewer respondents in all age groups except the oldest (65 years and older) expected to live in a city. Millennials also predicted a substantial reduction in their use of personal public transit, whereas respondents in the older two age groups foresaw an increase.

18 Understanding Changes in Demographics, Preferences, and Markets for Public Transportation When respondents in the 25–34 cohort age into the next age group, they will face new chal- lenges. Two questions based on this project’s framework then arise: 1. Will respondents continue to value densely settled urban settings and stay in these locations? 2. Will respondents continue to hold preferences and attitudes that question the importance of auto ownership and facilitate shared vehicle use? Stay with Urban Location? Research results suggest that, for many millennials, the answer to the first question is no, they will not continue to prefer the densely settled urban setting. A careful review of the factors documented above shows that millennials (particularly those in the 25–34 age group) are acutely aware that their lives will soon change, and many will be look- ing for better schools and more living space. They are ready to move on and more willing than other groups to increase their commute by 40 minutes to get a bigger home. As urban as their present situation might be, and as much as they want to live in an urban setting, they expect to appreciate the suburbs more as they age, even admitting their future home may look like their parents’ home. The youngest group most expects it will have to drive more with increasing age. Millennials and Emerging Adulthood. Many millennials had difficulty finding initial jobs around the time of the 2009 NHTS.1 As a result, many are getting married later and settling into the first-owned home later. However, the survey work undertaken for this project (and described in Chapter 5) suggests that their intention is to get back into a pattern similar to that of previous generations, however late. On the basis of the research conducted for this report, the millennial generation is a cohort that has delayed—or postponed—the timing of major permanent household formation activities such as leaving the home of the parent, getting married, and purchasing a home associated with child rearing. The millennial generation is not a cohort that is denying or rejecting the next steps in the life cycle. These young households will at some point continue a pattern in which the preference to stay close to desired activities (schools, jobs, present neighborhoods) is traded off against the inescapable fact that a longer commute distance brings a wider selection of adequate homes, neighborhoods, and prices. In metropolitan areas where housing costs in closer-in settings have not exploded, it may well be possible for the next home selection move to be to a (close-in) sub- urban neighborhood supportive of traditional transit services. However, in the cities where transit has been most successful, it is possible that the explosion in home prices will make that desired relocation virtually impossible. This would result in many who hold pro-urban values ending up in distant, lower-density locations despite those long-held values. The result is a condition of dissonance between valued location and actual location. A recent study in Boston concluded [A]s Millennials age and consider planting more permanent roots, Greater Boston’s housing market may push them to other locations. [Our] respondents reported that housing costs have already had an impact on their decisions: In the last five years, 33% were forced to move because either their rent or mortgage payments were too high. (Vance and Ciurczak 2017) Implications This study found that many in the cohort between 25 and 34 years of age will face location decisions that may or may not reflect their longer-term values to be loyal to a highly urban lifestyle. The study has shown that, as this cohort aged out of the youngest group, it kept up a strong pattern of transit use. Now, the members of this group report that they expect to move The millennial gen- eration is a cohort that has delayed—or postponed—the timing of major perma nent household formation activities. . . . These young households will at some point continue a pattern in which the preference to stay close to desired activities (schools, jobs, present neighborhoods) is traded off against the inescapable fact that a longer commute dis- tance brings a wider selection of adequate homes, neighborhoods, and prices. 1 The unfavorable economic circumstances for the millennials in 2009 is explored in NCHRP 08-36, Task 132 (AASHTO 2017).

Eight Major Findings and Policy Implications 19 to less-dense settings and to use transit less. A major question for the transit industry is how to benefit from some of the basic pro-urban preferences of this group as they relocate to less transit- supportive locations. Major Finding 6. Transit Level of Service Is More Important Than Having a Population That Is Pro-Transit This study created a new method that examines all three forces (demographics, geographics, and psychographics) that influence transit markets simultaneously in an integrated modeling process. The unified model integrates several service assumptions with multiple demographic and market preference assumptions. The results from the new model are helpful in understanding how market preference variation relates to transit choices, with illustrative highlights shown in Table 1. Scenarios Positive for Transit Future scenarios were modeled in which the entire population in the future year adopts a set of preferences positive for transit: • At present, those under 30 have many market-based preferences associated with higher rates of public transportation. In a future scenario, if the entire population had the attitudes and preferences of the under-30 market segment, the model predicts that overall transit ridership would increase by 5%. • At present, those with a graduate education have market-based preferences associated with their higher rates of taking public transportation. In a future scenario, if the entire population had the attitudes and preferences of the best-educated market segment, the model predicts that overall transit ridership would increase by 8%. • Finally, in a future scenario in which the entire population had the set of preferences of both the under-30 group and the best-educated group together, the model predicts that transit ridership would increase by 13%. In all three future scenarios, the level of transit service offered was constant. In a less-dramatic scenario, if the entire population were to adopt the preferences of the group just one level lower in age and one level higher in education, transit ridership would increase by 4%. Projected Change (%) Scenario Bus Train Total Transit TNC, Private TNC, Shared Car Transit-Positive All adopt under age 30 and graduate degree attitudes 11 15 13 13 19 –26 All adopt graduate degree attitudes 6 10 8 –3 7 –11 All adopt under age 30 attitudes 6 5 5 18 12 –15 Transit-Negative All adopt over age 65 attitudes –5 –1 –3 –23 –11 13 All adopt no college attitudes –4 –6 –5 0 –5 8 All adopt over age 65 and no college attitudes –9 –7 –8 –23 –16 21 Table 1. Projected mode use change from alternative attitudinal scenarios.

20 Understanding Changes in Demographics, Preferences, and Markets for Public Transportation Scenarios Negative for Transit The research team also modeled future scenarios in which the entire population in the future year adopts a set of preferences negative for transit: • At present, those over 65 have many market-oriented preferences associated with lower rates of taking public transportation. In a future scenario, if the entire population had the attitudes and preferences of the oldest market segment, the model predicts that overall transit ridership would decrease by 3%. • At present, those with no college education have market-oriented preferences that are associated with lower rates of taking public transportation. In a future scenario, if the entire population had the attitudes and preferences of the least-educated market segment, the model predicts that overall transit ridership would decrease by 5%. • Finally, in a future scenario in which the entire population had a set of attitudes and prefer- ences reflecting those of both the oldest and the least-educated market segments, the model predicts that overall transit ridership would decrease by 8%. Again, the level of transit services was held as a constant. In a less-dramatic scenario, if the entire population were to adopt the preferences of those just one level higher in age and one level lower in education, transit ridership would decrease by 5%. The research team then applied the same model to explore possible future assumptions about the quality of transit services offered (Table 2). The new integrated travel demand model can separate the impacts of hard explanatory factors for the propensity to choose transit (times, costs) from soft factors (attitudes, preferences). This comprehensive study concluded that the direct elasticities associated with improving transit services explained more than all the cross elasticities examined in the study. In other words, improving transit service has a much larger impact on transit use than does having a population with the attitudes, preference, and demographics of the most pro-transit among us. This study concluded that the fate of transit probably lies primarily with those designing the routes and services. Transit’s fate will not primarily be determined by difficult-to-analyze issues such as future values, preferences, and attitudes or future demographic mixes. Major Finding 7. TNCs Will Offer More Competition Travel options have expanded over the past decade. People in urban areas depend on TNCs such as Uber and Lyft, carshare and bikeshare services, and other means for both work trips and nonwork trips. This shift seems to enable selecting a travel mode on the basis of daily Improving transit service has a much larger impact on transit use than does having a population with the attitudes, preference, and demo- graphics of the most pro-transit among us. Change (%) Change to Service Bus Train Total Transit All bus and train service better; TNC service worse 34 35 All bus and train service better 30 30 All bus and train service better; TNC service better 22 22 All train service better 78 19 All bus service better –40 21 All car usage worse 36 31 22 –37 78 9 8 8 Table 2. Projected change in transit use on the basis of alternative service quality scenarios.

Eight Major Findings and Policy Implications 21 circumstances rather than habit. The integrated travel demand models developed in this project can be helpful to better understanding what might happen in the future with alternative roles for the new services. Variation in Use of and Attitude Toward TNC Services The 2016 TCRP survey showed that younger people are more likely to use newer transportation options (e.g., TNCs, carshares, bikeshares) and to use them more often. Although trips using TNCs for nonwork purposes were reported across all age groups, millennials also reported using TNCs for commuting. The car ownership rate for people with access to carshare programs was about half that of those without such access. As discussed in the recent literature, the role of new service types enabled by information and communications technology (ICT) remains one of the major unanswered questions concerning the future market setting for transit (Clewlow and Mishra 2017). The integrated model described above offers some sense of scale for the vulnerability of various markets to new competing services. As shown in Table 2, an optimistic scenario for the future of transit is one in which both bus and train service are improved, resulting in a 30% increase in transit ridership; this scenario holds the two TNC service categories constant. However, when improvements to TNC services are also assumed, the increase in transit is only 22%. In other words, TNCs could pose an increasing challenge to transit agencies, even if the agencies improve their services. The propensity to take TNC services varies significantly by age group. The scenario testing model described a future in which all age groups adopted the preferences of the under-30 age group; in this alternative scenario, ridership in shared TNC increased by 12%. On the other end of the spectrum, if all age groups adopted the market preferences of the over-65 age group, overall ridership on the shared TNC service would decrease. These calculations from the integrated modeling program support a basic paradigm that, in some cases, some new TNC services will operate as a competitive mode with transit. Further caution about the impact of demographic categories (in this case, age) comes from the response to the statement: “In general, if the shared car allowed me to wait less time than for the bus, I would take the shared car.” More than 50% of those under 35 years old agreed with this statement, while less than 50% of those over 35 agreed. This is generally consistent with the response to the statement, “If driverless cars were to become a reality, I would be less likely to travel by public transportation.” Here, about 48% of those under 35 agreed, with less than 30% of those over 35 agreeing. In both cases, the millennials displayed far more interest in moving away from traditional transit than the older age groups. Looking forward, millennials are embracing technology and the changes in travel behavior. TNCs and share programs/services that offer options for multimodal travel are growing at aggressive rates, fueled mostly by younger travelers. Looking farther out, younger people tend to imagine a world where autonomous cars would replace transit, while older respon- dents do not. Major Challenges Revealed Millennials are more concerned about security and disturbing behavior on public trans- portation than other groups: this could be a serious problem as new forms of competition (e.g., shared TNCs) emerge. Millennials are also more likely to say that conditions on public New services from the TNCs could impact transit rider ship, even if the agencies improve their services.

22 Understanding Changes in Demographics, Preferences, and Markets for Public Transportation transportation expose them to undesirable, disturbing behavior. These concerns could affect their future choice of mode, as illustrated in the following hypothetical scenario: Millennials perceive a shared-ride car or van as being local and filled with local people, while they perceive the transit bus as being regional and filled with people “not like me” who exhibit disturbing behavior. Moreover, given that millennials are more open to trying new things, they have more pro- pensity than other age groups to say they would take the shared car. In their survey responses, millennials strongly supported the statement that they “would be less likely to travel by public transportation” in a world with autonomous cars. All of this suggests that a valued transit market group is soon to move to less-dense and less– transit-supportive areas, and millennials hold some major concerns about their safety on transit. Over time, their mobility options will change, and traditional patterns will be reexamined. At that point, it would be highly desirable for transit operators and TNCs to work together to maximize the complementary nature of their service offerings. The perception by some that transit is associated with upsetting, disruptive behavior remains a serious challenge for the industry. If transit services can provide an increased feeling of safety on board transit, and other providers can offer supportive services to help meet noncommuting mobility needs, a pattern of a mobile life with less dependency on automobiles is more likely to be nurtured and survive. Major Finding 8. Implications for the Leaders of the Transit Community The research summarized in this report reinforces some basic observations about the forces that come together to influence the market setting for transit. Some factors are simply out of the control of those who would advocate more transit ridership: the progression of the separate cohorts through the age groups will occur independently of what transit proponents do or do not do, as will the ethnic composition of the local area population. However, other factors can be influenced by public policy, even if that policy is generated outside of the transit agency. The research makes abundantly clear how important it is to design higher-density neighbor- hoods that promote walking and are transit attractive and accessible. Urban planners will need to stress the importance of urban design, livability, and walkability and emphasize the need for better coordination of planning, zoning, and housing policy with transportation planning and policy. Finally, while it may be difficult to influence traveler preferences (including longer-term values and shorter-term attitudes), those in the transit community can try to affect the formation of attitudes. Although attitudes are less important than the design of routes and services, transit agencies can pursue efforts to influence attitudes toward their services through marketing (e.g., branding, image building, and promotion). Additionally, the design of services is highly correlated with the land use that is being served, which, in turn, is influenced by many partners of transit agencies, such as regional and local leaders and planners, through their policies, initiatives, and decisions. Attitudes and related demand for transit are influenced by density, diversity, and design, which are not within the control of transit managers. The “three D’s” also greatly influence the design of affordable services. For these reasons, the phrase “leadership of the transit community” should be interpreted broadly to incorporate all whose actions contribute to the creation of a supportive transit market setting. Policy Implications of the Scenario Testing Exercise The project’s advanced travel demand model provides the ability to separate out the impacts of hard explanatory factors for the propensity to choose transit (times, costs) from the soft Attitudes and related demand for transit are influenced by density, diversity, and design, which are not within the control of transit managers. . . . The phrase “leadership of the transit community” should be interpreted broadly to incorporate all whose actions contribute to the creation of a supportive transit market setting.

Eight Major Findings and Policy Implications 23 factors (attitudes, preferences). Chapter 1 concludes with a short set of observations about how the results of this study might be applied in support of the activities of the leaders of the public transportation community. Leaders of the transit community will be confronted with the need to influence both the hard factors and the soft factors. On the one hand, those in the service-planning field must be responsive to the needs of their clients today; on the other hand, those in transit marketing and capital planning must understand how those preferences will change tomorrow. It is not an either–or issue: transit leaders will need to deal with both hard and soft factors when planning for the future. Meeting the Market Needs of Those Between 25 and 34 Years Old Millennials, particularly those in the 25–34 age group, provide much reason for optimism about the future of public transportation in the United States: their attitudes about independence from car ownership and enthusiasm for the basic tenets of an urbanistic life are all strong. However, it is more complicated than that. This study leaves an important question unanswered: To what extent will this cohort retain these values as it seeks additional housing space and a resi- dential setting supportive of the needs of bringing up and educating children? Meeting Millennial Market Needs via Service Changes The following facts and questions remain. Millennials hold urban neighborhoods in high regard but plan to move to less-dense settings anyway. Can transit build on this pro-urban attitude in less-dense areas? A major market segment will leave the best geographic setting for transit. Can the transit industry take advantage of the positive attitude toward transit in newer, less-dense residential settings? • For transit managers, retaining an existing market in a new geographic setting will not be easy. For commuting services in lower-density settings, bus and bus rapid transit can benefit from large parking areas. • For nonpeak services, contracts with both private and shared TNC services may help to support lifestyles associated with decreased auto ownership. Meeting Millennial Market Needs via Technology and Communication Younger age groups and most other market segments were found to appreciate being connected and productive while traveling. In particular, younger women were more likely than other groups to say that they needed more information to “make the bus or train trip work.” • Onboard and in-station Wi-Fi should be enhanced and promoted. Advanced way-finding technologies must be applied to the total transit trip, from door to door. Information must be improved for those making a transfer or moving onto services from a separate provider. • The good news about transit—where it is, when it is coming, and what it can do—must be communicated through the same electronic devices that now provide just about all other information to the young. If information is not presented on a smartphone, it will not be used by these riders. Implications of Demographic Change and the Need for Outreach Meeting the Market Needs of Racially and Ethnically Diverse Riders Demographic trends show that transit riders are becoming more diverse. Some demographic factors, such as being nonwhite, being Hispanic, and having spent one’s childhood outside the

24 Understanding Changes in Demographics, Preferences, and Markets for Public Transportation United States, are associated with higher use of public transportation. Transit riders today are split nearly equally nationwide between white, African-American, and Hispanic riders. • Practical implications for transit leaders include a need for outreach to these communities to understand their needs. Outreach can also boost knowledge of the availability of and use of transit services. • Marketing messages need to show the diversity of users that constitute transit ridership today. Implicit in this is that transit marketing should be emphasizing that the system welcomes everybody (e.g., “This is my transit, and I am proud of it” and “The transit com- munity is made up of lots of people like me, and I feel welcome here”). Information conveying this message and others should be presented in several languages. Meeting the Market Needs of Riders of All Ages Age has a dramatic effect on transit ridership, with transit use per capita decreasing as age increases. However, while the youngest age cohort in 2009 (ages 16–24) used transit more per capita than the older cohorts, this group used transit slightly less than the same age group in 1990. Surprisingly, each of the older cohorts used transit more per capita in 2009 than in 1990. Those in the 25–34 group have maintained their high ridership as they have begun to age, and the greatest increase in transit riders has come from those between the ages of 35 and 55. • The practical implication is to understand that the increase in transit ridership is not just from youth. Improvements, marketing, and outreach should be broadly aimed to retain higher rates of ridership in each age group. • Increase in transit ridership could also come from older customers. Policies could deal with losing one’s driver’s license, which will become more common as older boomers age despite better health and safer cars. Meeting the Market Needs of Riders of All Lifestyles The life cycle also has a dramatic effect on transit ridership. The two groups with the most per capita transit use include singles and single parents as compared with couples and families with two parents. • The largest increase in transit use has been among single parents. Features to make transit use more convenient for single parents, such as day care near transit centers, child-friendly fare systems, and easy boarding and alighting with low-floor vehicles should be implemented and emphasized. • Municipal planners and federal funding agencies should rethink transit-oriented develop- ment, and joint development more broadly, to specifically include daycare and services to reduce the need for trip-chaining. There is also a need to rethink zoning and development changes and to better coordinate housing and transit service policies. Making Transit Normative in the Minds of Riders The results of several analyses in this report suggest that normative support of transit is a key factor in encouraging transit use. Those under 35, in particular, are highly influenced by peer pressure and by the opinions and support of those in their immediate social networks. The younger age groups indicated that while their friends and family did not typically use transit, they would approve of the respondent using transit. • Promotional efforts could be directed toward families rather than just toward individual drivers to help build a foundation of support for the value of using public transportation.

Eight Major Findings and Policy Implications 25 Programs emphasizing that transit is a welcoming experience can be communicated through the reference to the full family, with pricing and service design policies to match. • The basic message that “people like me” use transit, value it, and approve of it should be carefully integrated into marketing strategies. Looking Beyond the Largest Metropolitan Areas for New Riders As discussed, the greatest rate of increase in transit ridership between 1995 and 2009 was not in the largest urban areas (e.g., New York City) but rather the smaller metropolitan areas. The highest rates of increase were in metropolitan areas with populations between 1 million and 3 million. Areas with populations between 1 million and 3 million grew 45%; areas with more than 3 million grew by 10%. (The 2010 Census had more than 30 metropolitan regions with populations between 1 and 3 million.) Outreach programs for new residents can be conducted to introduce transit service and explain how transit works. Use of transit will depend more on the local characteristics of land use and transit performance (as reflected in the transit accessibility index) than on the transit characteristics of the new residents’ former communities. Expanding the Reach of Existing Systems Transit must be prepared to welcome those migrating away from larger cities, whose serious lack of affordable housing might be attributed to the continued migration into those cities, which is in part because of the contribution transit has made to the urban lifestyle there. Partnering with local transport services through shared stop locations and integrating schedules and fare systems will extend service reach. Implications for Improvement to Transit Service Improving Travel Times and Reliability Millennials have a somewhat higher propensity to say they would use transit more if its overall performance, as measured by travel time, reliability, frequency, and proximity, were improved. Across all age groups, concerns about travel time and reliability are rated as more important than frequency or proximity. The implication is that changes in future attitudes toward specific aspects of transit can influence demand but not by nearly as much as changes in the quality and quantity of service that is offered. • Transit should continue to offer options that reduce travel time, improve reliability, and provide accurate information about arrivals and travel time. • An example of proactive service options would be bus rapid transit, which has been designed to rebrand transit service to change image and related attitudes while also improving service. Considering Integrating New Mobility Services into Transit Operations While the ultimate effect of TNCs, carsharing, and ridesharing programs on transit use is uncertain, the present research indicates that ridesharing programs may contribute to reducing car ownership in some market segments and thus increase transit use. However, the integrated demand model indicated a competitive relationship between transit and the TNC shared services. • Services such as Uber and Lyft are not going away. Formal or informal relationships with these services should be developed to provide an overall level of service that reduces the need for private automobiles. • New institutional and business models should be developed that explicitly facilitate better integration of transit and shared-use mobility such as “Mobility as a Service.”

26 Understanding Changes in Demographics, Preferences, and Markets for Public Transportation Implications for Planning and Urban Form Improving Riders’ Perceptions of Safety Those who worry more about crime and other disturbing behavior are the same groups that use transit most: women, nonwhites, Hispanics, younger people, those with less formal education, and those with less income. Logically, perhaps, these are the groups who do indeed face more danger with more ridership, or at least worry about it. • Efforts should be made to improve the perceived safety of transit service, including transit stations and bus stops. Making the transit system safer and more attractive will likely help riders and their families and friends feel more positive about transit. • Transit managers need to review design standards for stops and stations and work with municipal planners and leaders to coordinate planning for safe pedestrian access to transit. Considering the Needs of Families and Women This study clearly shows that the burden of poor essential mobility services in low-density neighborhood settings may fall disproportionately on women, whose trip-chaining patterns are more challenging than those of men (McGuckin and Murakami, 1999). A package of mobility services based on the real needs of families should be provided by transit advocates and should include children’s amenities and support services that would reduce the need for trip chaining.