- Executive Summary
- Cooperatives in U.S. Economy
- Economic Impacts
- Commercial Sales & Marketing
- Social & Public Services
- Financial Services
- Discussion Papers
- Future Research
- Download Report
University of Wisconsin Center for Cooperatives
Research on the Economic Impact of Cooperatives
While relatively few in number, cooperatives in the transportation sector encompass a broad range of functionality. Often members of cooperatives in this sector are other service organizations. The cooperatives may be organized to meet the demand for services in lower-density rural areas, or in areas that cross geographic jurisdictional boundaries. The cooperative may be created to meet specialized transport requirements of school districts or those with limited mobility. Cooperatives are also organized to offer transportation alternatives that reduce the number of car trips in an effort to address environmental and sustainability issues that accompany the heavy traffic demands of urban areas.
Cooperatives offer an organizational approach for scheduling and vehicle sharing that more cost-effectively meets specialized transportation needs. Public-private cooperative ventures have resulted in ride-share and shuttle programs that provide route-specific transportation services to members, and are frequently organized around commuting patterns of employees.
Car sharing, begun in Europe in the late 1980s, is another approach to car ownership that has used the cooperative model to provide services to members. As of July 2008, the U.S. has 18 programs, several of which are nonprofit member-governed organizations (Carsharing). These consumer cooperative organizations purchase, maintain, and insure cars for use by members on an as-needed basis. Members pay a fee and must meet driving license and record requirements to participate.
Cooperatives also supply the specialized transportation-related needs of a wide variety of members, including truck drivers, owners of biodiesel vehicles, and bicyclists.
Taxi cab cooperatives usually are worker cooperatives organized to benefit the drivers who provide transportation services to paying individuals. Typically, taxi cab companies operate using independent contractors who often must provide their own vehicle or lease one from the company. A worker-owned cooperative may be organized to provide a variety of employee benefits, the potential for a share in company profits, and the right to participate in ownership decision-making.
Privately owned taxi companies may also form purchasing cooperatives to provide more efficient administrative services to its member businesses.
Many public governmental entities use cooperative programs to more cost-effectively provide transportation services, such as compliance programs for school districts, and to facilitate inter-agency coordination of transportation planning. As governmental entities, these fall outside the scope of this project. However, many cooperative ventures involving both governmental agencies and private organizations have been formed to provide specialized transportation services, or to tackle the environmental and regional planning issues that arise from delivery of transportation services. In these cases, a nonprofit corporation organized along cooperative lines is sometimes formed to manage these efforts.
Car share cooperatives occupy a small portion of the growing car share market, which is dominated by Zipcar, a privately owned, national business that merged in 2007 with Flexcar, another leading car share enterprise. Car share cooperatives often predated the entry into a local market by Zipcar, or exist in cities not served by a private company. The nonprofit cooperative model also more easily supports a broader educational and outreach mission to reduce traffic and raise awareness of the larger externalities associated with widespread car ownership. The nonprofit status also allows such cooperatives to receive outside grants and donations that can offset the significant start-up costs for such a venture. Another stated benefit of the cooperative model for car share enterprises is the local control it can provide in developing the car share option as part of the larger transportation plan.
Worker-owned taxi cooperatives comprise a small fraction of the approximately 6,300 companies that operate in the United States. Only 6% of taxicab operations have >100 vehicles in service, >80% of these companies operate fewer than 50 vehicles (Taxicab, Limousine & Paratransit Association).
The transportation sector also encompasses a variety of enterprises, such as small-scale biodiesel fuel supply cooperatives or services to support increased bicycle use. In these cases, the cooperative model provides services in markets that are not sufficiently developed, or do not have sufficient margins to attract profit-driven businesses.
Depending on the type of goods and services being provided, the transportation sector contains several different types of cooperative organization.
Because the provision of transportation services exists in the realm of the public good, many transportation cooperatives are organized on a nonprofit basis, and are collaborations between nonprofit, businesses, or public transportation entities to provide services or to develop trip reduction programs.
Nonprofit status may make collaboration with governmental agencies more straightforward, thus making the cooperatives eligible for grants and donations, and promoting a broader educational mission that can reach more members. Many nonprofit cooperatives exemplify boundary issues described above, and the members may have varying degrees of control over the organization, depending on board structure and bylaw requirements.
Car share cooperatives are member organizations that span the boundary between nonprofit and cooperative. Member representation on the board may vary, and multiple member classes besides individual drivers may exist, including businesses that provide a car sharing service to employees, and non-driving members who may support the goals of the organization.
Worker-owned taxi cooperatives are owned by the taxi drivers who elect a board to oversee the cooperative’s strategic generation. The cooperatives are structured to provide employee benefits and patronage profit-sharing; membership requirements vary.
The data on transportation cooperatives was obtained from primary research. All economic data was obtained from survey work undertaken by the UWCC. The survey response rate for transportation is 31% and all reporting cooperatives provided us with 2007 fiscal year-end data. The data collection and survey methodology is discussed in detail in the Data Collection section in the Appendix.
Table 4-3 shows that we have data for 13 transportation cooperatives and collectively these firms account for >$68M in assets, nearly $290M in sales revenue, and pay nearly $9M in wages. There are approximately 500 hundred employees and nearly 30,000 memberships. As Table 4-3.3 shows, by extrapolating to the entire population (49 firms) and adding indirect and induced impacts to this activity, transportation cooperatives account for >$567M in revenue, nearly 800 jobs, $20M in wages paid, and >$60M in valued-added income.