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Gas prices spur consumer change


Americans’ struggle with $4 gas doesn’t just mean we are turning in our gas-guzzling SUVs for more fuel-efficient cars, forgoing vacations or socializing more at home.

People are moving to be closer to their jobs. They are taking mass transit or carpooling more often. They are changing their work schedules, where they shop and go to school.

Not since the 1970s has there been such evidence of a widespread shift in consumer behavior. As gas prices have climbed 40 percent in the last year, we’re taking conservation more seriously and looking for alternatives to get us what we need and where we need to go.

Imagine that – a public suddenly more willing to give up convenience because of a myopic focus on cost. The long-term economic effect could be significant.

For evidence of the gas pullback, look no further than the dwindling number of cars at a nearby commuter parking lot. This one is situated right in the heart of congested midtown Manhattan, a block away from the Lincoln Tunnel and Madison Square Garden.

Just months ago, it was overflowing with cars mostly belonging to drivers coming from the surrounding suburbs to New York for work. The driveway was clogged with vehicles, with cars often streaming into the street because there weren’t enough spots to handle the demand.

Now, the huge lot only has about a third of its about 200 spots filled on any given day, often even less. The attendants – who have been losing out on tips as a result – have even offered up discounts to woo drivers to park.

It’s not a fluke. The Port Authority of New York and New Jersey saw traffic drop significantly at the major Hudson River crossings in June: by 5.3 percent at the Lincoln Tunnel, by 4.1 percent at the Holland Tunnel and by 3 percent at the George Washington Bridge. At the same time, riders on commuter rail lines and subways are up.

And this isn’t just a New York phenomenon. Traffic is falling nationwide, while demand for mass transit is rising, leaving agencies in charge of those services scrambling to add trains and buses to their lines.

Also, a recent nationwide survey of 43,000 drivers by research firm The NPD Group Inc. found that 12 percent of respondents said they were carpooling more due to the higher cost of gas.

Maybe even more telling in the NPD data was the 2.5 percent of respondents who said they had moved closer to work to cut down on their driving time, and the 5 percent who said they now worked closer to home. Those are behavioral changes that will stick no matter what gas prices do going forward.

“We are long past the psychological impact of more expensive gas,” said David Portalatin, director of industry analysis for NPD’s automotive division. “We are seeing a lot of people being motivated to do what is most economical and make permanent adjustments in their lives.”

This trend isn’t just showing up in how we get to work. Consider that:

– Mall traffic is on the decline as consumers stay closer to home to shop, rather than head to highway locations or cities where larger shopping centers are typically located. That’s one of the reasons cheap-chic retailer Steve & Barry’s LLC, which had just made a significant expansion into malls, gave when it filed for bankruptcy court protection earlier this month. At the same time, discount chain Family Dollar Stores Inc. has said its rural locations are outperforming the chain as a whole, as more consumers shop locally.

– Work schedules are being altered to reduce travel time. Utah will be the first state in the nation to switch to a four-day workweek, a move aimed at reducing the state’s energy costs and commuters’ gas expenses. Workers there will put in 10-hour days Monday through Thursday, and have Fridays off, a move many municipalities and companies elsewhere in the country are considering.

– Universities are seeing an increase in enrollment in online courses. For instance, demand for Villanova University’s online summer classes in its engineering school are up 40 percent, surprising the Pennsylvania school’s administrators who typically see flat enrollment in the summer months.

All this has knocked down gas consumption.The Energy Information Administration reported that over the past four weeks, U.S. motor gasoline demand has averaged 9.3 million barrels per day, down by 2.1 percent from the same period last year.

But the falloff in U.S. consumption hasn’t done much to deflate gas prices at the pump, nor has some pullback in oil prices in recent days, which have fallen from a trading record of $147.27 hit on July 11 to around $130 a barrel. The price of gas still remains within pennies of its record high of $4.105 a gallon, according to AAA, the Oil Price Information Service and Wright Express.

Even if gas prices come down a bit, many consumers might not go back to their old ways. That could effect everything from where retailers put stores to the number of drive-through lanes at banks and fast-food restaurants to where companies locate their headquarters.

We’ll never stop driving, but we are certainly changing how we use our cars.

Rachel Beck is the national business columnist for The Associated Press.

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