Business owners are buying into a bogus myth about driving
NYC’s very good plan to fix traffic fell victim to a very bad argument. And it's not just New York.
In study after study in city after city around the world, researchers have found that merchants exaggerate the share of patrons who arrive by car and undercount those who walk, bike, or ride transit. Those misperceptions lead them to oppose transportation reforms that would limit the presence of cars and make urban neighborhoods cleaner, more pleasant, and less polluted — and would likely increase spending at their business, too.
Consider a 2021 study in Berlin, in which researchers asked 145 shopkeepers and over 2,000 shoppers about travel behavior. The share of shoppers who drove was 15 percent below what shopkeepers predicted, while the portion who took transit, walked, and biked was higher (by 8.1 percent, 6.2 percent, and 3 percent, respectively). Similarly, a 2011 study of Dublin concluded that business owners overestimated the percentage of customers arriving by car and undercounted those who didn’t. The same bias has been observed in Graz, Austria, and Bristol, England.
It's a similar story in North America. In Toronto, a group of small business owners vehemently opposed new bike lanes on Bloor Street in 2016, but a subsequent academic analysis found that retail spending and customer counts increased after the bike lanes were installed.
A 2013 study of the Portland, Oregon region concluded that “bicyclists, transit users, and pedestrians are competitive consumers and, for all businesses except supermarkets, spend more on average than those who drive.” That analysis surprised many business owners in the relatively car-centric city, prompting one convenience store chain to install bike racks near its entryways, said Kelly Clifton, a professor of community and regional planning at the University of British Columbia who co-authored the study.
The findings about business owners’ perceptions of customer travel are remarkably consistent. I have yet to see a single study where survey respondents accurately estimated their customers’ modal split or made errors in the opposite direction (i.e., undercounting those who drive and overestimating non-drivers). The bottom line: Business owners think shoppers use cars more often than they actually do.
It’s easy to see how such misperceptions could arise. Shopkeepers and restaurateurs themselves may drive to work, perhaps because they travel at night when transit is closed or have to carry equipment. Last year, a chamber of commerce in Chicago’s Lakeview and Roscoe Village neighborhoods surveyed local residents and businesses about how they prefer to navigate the community, finding that 83 percent of residents preferred to walk or bike, while a majority of business respondents chose driving. A cognitive bias known as the false-consensus effect could lead such business owners to mistakenly assume that their customers drive just as much as they do.
Merchants may also commute from relatively far away, which (again, because of the false-consensus effect) leads them to undercount customers who live close enough to walk, bike, or ride the bus. One piece of supporting evidence for that hypothesis: The 2021 Berlin study found that the average shopkeeper thought about one in eight customers lived within a kilometer of their establishment, but more than half of surveyed shoppers said that they did.
It’s also possible that business owners are misled by what they are told about local transportation. Think about it: If you’re on your way to a restaurant and your train is delayed or you can’t find a nearby bike corral, would you complain to the staff? The thought likely wouldn’t cross your mind. But what if you were in a car, and you had to circle the block a few times before squeezing into a parking spot? Now the odds of sharing your annoyance are probably higher, since there are few more universal American experiences than complaining about parking. If store owners hear more griping from car owners than from transit riders, cyclists, and walkers, they might conclude that the bulk of their customers are driving — and that any policy that worsens drivers’ burden could spell doom.
Don’t let pro-car bias kill good policy
Whatever its genesis, the pro-car bias of business owners presents a major roadblock to urban policy reform. In the District of Columbia, small business owners have been among the most vociferous critics of a 2.7-mile dedicated bike lane that had been planned for Connecticut Avenue, a major thoroughfare in the city’s northwest quadrant, before Mayor Muriel Bowser abruptly reversed course in April and declared the bike lanes dead. Despite frequent hostility from small business owners, the installation of bike lanes has had a positive or neutral effect on retail sales in Minneapolis, Seattle, and Los Angeles.
Dedicated road lanes for buses are similarly despised by many business owners; they have been opposed in San Francisco, Montreal, and Indianapolis (where the Indianapolis Star observed that the conflict pitted “business vs. neighbor,” with the bus lanes enjoying widespread community support).
In New York City, many employers, especially large ones, have backed congestion pricing, since the policy would provide desperately needed funding to modernize the subway system that underpins the city’s economy. The head of the Partnership for New York City, a powerful chamber of commerce, offered strong support for the policy after Hochul’s sudden reversal last week. But a loud group of small business owners has warned of crashing sales from congestion pricing. Speaking to ABC 7 in February, Steven Traube, the owner of the Wall Street Grill and a plaintiff in a lawsuit seeking to block congestion pricing, said that if the policy is implemented, he will “definitely [have] to rein back on staff because I know sales will go down.”
Regardless of whether Hochul really did meet lots of patrons in Manhattan diners who drove there from New Jersey (which, by the way, has the most diners per capita in the country), it’s certainly plausible that she has heard from business owners insisting that congestion pricing would crush them. A wise response would have been to ask if they had done a customer survey to make sure that they know how their patrons are arriving. Based on findings from prior research, they probably don’t.
Simply accepting business owners’ criticism of congestion pricing at face value is a terrible reason to jettison a policy that would improve transit service, enhance quality of life, and reduce emissions that damage the planet as well as human health.
Then again, perhaps Hochul is well aware that her argument is bogus. She just can’t find a better one.