My husband works for the Federal government. He takes a van pool to and from his work on most days (he has a 120 mile commute round trip). The van pools are a great deal. If someone rides in a van pool, they commit to riding a certain number of days per quarter. They pay a membership fee and are reimbursed for saving gas.
In response to fraud, two significant changes were made to the van pool contracts:
- Van riders have to ride the van at least 50% of the working days each month (instead of each quarter).
- The van needs to be more than 50% full (not including the driver) at least 80% of the time.
First requirement
The first requirement is a problem. Vacations, has off-site training, goes to a conference, etc, interfere with ridership. Add two of these events together, and you end up with a severely inflexible policy. Employees who have to travel or who want to take a vacation may not be able to abide with the new requirements. Employees that travel a lot may not be the best candidates for the van pool, but employees who have one long trip ever should be able to ride the van.
Second requirement
The second change is even more restrictive. My husband’s van holds 14 people. They need to have at least 8 people ride (7 out of 13 + 1 driver) at least 4 out of 5 days in the week. It’s worth noting that small vans are going to have more of a problem with this because they typically have more variability in who shows up.
Looking at the long-term, a van needs to have at least 8 riders 80% of the time. That implies that the average number of days until the van is not “half” full needs to be 5. If we assume that each day is independent of the others, then we can model this as a geometric distribution. To get the desired average of 5, we need a “success” probability of 1/5. That is, the probability of a van being less than half full on any single day needs to be 20%. Is that realistic?
Let’s look at the 14 riders. Let’s say they each ride each day with probability p and that each day is independent. Then we can model the number of riders each day R~ Binomial(14,p). We need P(R<8) < 0.2 to meet requirement #2 (from the last paragraph). But if p=0.5 (as required), then P(R<8) = 0.605. We need p > 0.642 to get P(R<8) < 0.2.
Thus far, I’ve assumed that each day is independent. Making that assumption will yield optimistic results. The “optimistic” results suggest that even under idealistic assumptions, the new van pool requirements will be extremely difficult to meet.
But this assumption is not valid. Riders ride less on Mondays and Fridays (40% of the work week). In practice, this means a van is likely to have at least 8 riders on three days of the week (Tue-Thu), but not four as required. For simplicity, let’s say that a van always has 8 riders on Tue-Thu (an idealistic assumption, but not too unreasonable). Let’s say that each rider takes the van with probability p = 1/3 on Mondays and Fridays (a modest change), and let’s assume that each rider and day are independent. Then the van has 8 riders with probability 0.0576 on these days. The probability that the van covers at least one Monday or Friday per week is 0.111. Therefore, under more realistic assumptions, it is even more unlikely that a van can meet assumption #2.
Vans could meet these requirements if they “overbook” and allow more riders than there are seats in the van. They will surely need to risk turning riders away to meet their requirements if more than 14 show up some day. This may happen when gas prices change, since ridership increases when gas prices shoot up. However, my husband has noted problems meeting requirement #2 in the past couple of months when gas has been ~$4 per gallon.
Van pools and (un)intended consequences
Van pools are intended to improve the environment by encouraging car pooling. Van pools ultimately create an incentive for people to live very, very far from where they work, thus leading to more fuel usage. In the end, I do not think they save much (or any) fuel from being consumed. But this is open for debate.
On the other hand, van pools are great if your significant other wants a career. It has made our “two body problem” quite manageable. Accommodating one’s spouse’s career is rarely cited as a benefit to van pools. I am grateful that van pools exist so that both my husband and I can have careers. I hope it’s still possible for him to carpool with new rules.
Final thoughts
I applaud the Federal government for trying to crack down on fraud. But I encourage them to create rules that make it possible for riders to follow the letter of the law. And maybe someone who has taken a course on probability should look over the next set of rules and crunches some numbers.
Do you ride a van? Please correct anything I got wrong in the comments and add your two cents about how they can be improved.
Punk Rock Operations Research 
May 15th, 2012 at 8:28 am
The optimum level of fraud is almost never zero. The effort it takes to stop all fraud is almost always far more than you would lose through fraud.
But what is the optimum level of fraud?
May 15th, 2012 at 10:40 am
@iamreddave, that is an excellent point. I bet your question will turn into a blog post (-:
May 15th, 2012 at 11:02 am
To complicate matters even more, the riders are not comfortable if the van is close to 100% full, so there is a constraint at the upper end as well. I actually drove one day when 12 of 14 people show up, and one guy got out of the van and drove himself to work in disgust. He is no longer riding with us. One minivan group I know purposely keeps their ridership at 6, even though their van technically seats 7.
May 15th, 2012 at 6:20 pm
First, congrats on your husband’s use of vanpooling! Vanpooling, in most situations, is the most seat efficient form of transit. With the current benefit at $125 a month per government employee, many public and private transit agencies focus on the development of government vanpool programs. Many are responsible with this benefit, some are not.
Most government agencies follow the direction of the IRS, further defined by the DOT. To clarify a few statements:
Ridership levels are defined by the IRS. The 80% figure relates to the mileage that has to be dedicated to commute miles. “Membership Fee” relates to specific companies, but basically include the cost of the vehicle, gas and maintenance.
Most Federal agencies do not consider sick/ annual leave use against “ride days” for public transit or vanpools. In addition a “ride day” is usually considered a day you will be at work for the same hours as the van. Typically, only extended TDL trips require a person to forgo the transit benefit.
Most policies agree, ANY day a van is in service, ride levels should exceed 50% of the total amount of seats. Again, this does not consider sick / annual leave, off work activities, etc.
I for one also like to do the math. However, government employees do receive a benefit of, up to, $125 a month to vanpool, tax-free in addition to salary. If someone wants to receive the benefit, they should follow the goals of the program which is to encourage effective, efficient and with most situations, a fully federally subsidized commute to work. A person or group can always opt to pay out-of-pocket the cost of the seat and ride as much or as little as they choose.
I have worked and supported the benefit and use of the program for almost a decade and the language is tricky and defined differently by each agency. If people want to receive the benefit they should follow the guidelines which support reduced traffic and parking congestion, to name a few. For those which cannot due to family or work situations, paying $125 out-of-pocket each month is typically always cheaper than driving alone and is much more cost effective than the loss of a terrific retirement plan.
Hope this helps and keep vanpooling!
May 15th, 2012 at 9:59 pm
Whenever an organization relies on rules to organize day to day minutia, it means that the organization is *very* messed up. I wish I had a solution for the Feds, but I am sure that the number of rules for an organization has an inverse relationship to their effectiveness (I am no so sure about causal direction…)
Organizations should be based on well aligned incentives or on peer enforced organizational culture; then “standardized practices” (not “rules”!) get “pulled” from the employees trying to do better, rather than “pushed” by management (vocabulary in the spirit of Toyota Way and Lean blah blah blah).
Before today, I had thought about this fact in terms of human psychology (when personal success aligns with institutional success you just need the occasional audit), and friction (red tape, basically). Now I will also think about this problem in terms of forcing a situation into such a narrow feasibility space that things get bad (in multiple ways). Yay OR metaphors!
May 16th, 2012 at 7:43 am
@JD, THANK YOU for your comments about the bigger picture.
May 17th, 2012 at 6:57 am
“If we got outlandish and assumed a future in which 20.3 million Americans (or about 12.5 percent of all eligible drivers) used car-sharing, then emissions from light vehicles would still just drop 1.7 percent.”
http://www.washingtonpost.com/blogs/ezra-klein/post/how-big-can-car-sharing-get-in-the-united-states/2012/05/15/gIQAGybsRU_blog.html?wprss=rss_ezra-klein
May 25th, 2012 at 5:14 am
Any time the government places an incentive there is always extranalities. I think you nailed one. People can life farther away consuming more resources with only a minor cost to them. These programs would be far more effective if they removed the incentive. Once a logical person did the math they would determine what this service is worth, and adjust how far they would live from work based on their utility. This would also eliminate wasted action of a person looking for rule breakers. All inspection or policing is waste, why add unneeded waste when normal human self interest would use the market and make the solution for all.