Can Gasoline Be Saved by Financial Incentives and Training of Bus Drivers? ‘Egged Ltd.’ Bus Company in Israel As a Case Study

Int. J. Sustainable Society, Vol. 5, No. 1, 2013 1

Can gasoline be saved by financial incentives and training of bus drivers? ‘Egged Ltd.’ bus company in Israel as a case study

Salim Saadia, Shlomo Hareli and Boris A. Portnov* Department of Natural Resources and Environmental Management, Graduate School of Management, University of Haifa, Haifa 31905, Israel Fax: +972 4 824 9971 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] *Corresponding author

Abstract: Gasoline consumption can be reduced if drivers are motivated to save gasoline and are familiar with driving practices that help to minimise gasoline consumption. To verify this assumption, four groups of drivers (20 bus drivers each) were randomly chosen for this study from two operational branches of the ‘Egged Ltd.’ mass transit company in Israel. In a 2 u 2 factorial design, one group of drivers received financial incentive equal to 30% for each litre of gasoline saved, while another group underwent one week of professional training on gasoline-saving techniques, a third group received both treatments and the fourth group did not receive any of these treatments and hence served as a control group. During the first 20 days of the experiment, carried out in November–December, 2008, per kilometre fuel consumption was recorded for each driver, as a personal baseline of gasoline consumption. During the final phase of the experiment, lasting another 20 days after one- week training, personal gasoline consumption was again measured and compared to the baseline. While drivers, who did not receive either professional training or financial compensation (the control group), did not show a significant change in their gasoline consumption (ǻ = 1.1%; p > 0.2), drivers, who received both professional training and financial reward, showed an average reduction in gasoline consumption by some 7.3% (p < 0.001). Drivers who received only professional training reduced their per kilometre gasoline consumption by an average of 5.4% (p < 0.01). Concurrently, the drivers who received only financial reward reduced their gasoline consumption by an average of 5.0%, relative to their baseline performance (p < 0.001). Only the differences between the test groups and control group were found to be significant (p = 0.05). Both professional training and financial compensation appear to be equally effective in encouraging gasoline saving. The combination of both tools yielded similar results, suggesting that these strategies reached their ceiling of possible improvement in gasoline consumption.

Keywords: gasoline consumption; professional training; financial incentives; case-control experiment; driving behaviour; bus drivers.

2 S. Saadia, S. Hareli and B.A. Portnov

Reference to this paper should be made as follows: Saadia, S., Hareli, S. and Portnov, B.A. (2013) ‘Can gasoline be saved by financial incentives and training of bus drivers? ‘Egged Ltd.’ bus company in Israel as a case study’, Int. J. Sustainable Society, Vol. 5, No. 1, pp.1–10.

Biographical notes: Salim Saadia is the Head of the Road Safety Department of the Egged Ltd. Mass Transit Company. He holds MA in Environmental Management from the Department of the Natural Resources and Environmental Management of the University of Haifa, Israel. In 2010, he completed his MA Thesis under Portnov and Hareli’s supervision.

Shlomo Hareli is a Social Psychologist at the Graduate School of Management at the University of Haifa. He is the Director of the Interdisciplinary Center for Research on Emotions and the Head of the behavioural sciences area in the school. His areas of interest include psychology of emotions, attribution processes, social emotions and social judgements as these are related to social settings and organisations.

Boris A. Portnov is an Associate Professor at the Department of Natural Resources and Environmental Management, Graduate School of Management, University of Haifa, Israel. He is an Associate Editor of the Int. J. Sustainable Society and serves on the editorial boards of Socio-Economic Planning Sciences, Int. J. Society Systems Science and Open Family Studies Journal. He has authored or co-authored four books and one textbook, including Urban Clustering: The Benefits and Drawbacks of Location (Ashgate, 2001); Regional Inequalities in Small Countries (Springer, 2005). His research has appeared in more than 110 refereed articles and book chapters, published in a variety of journals, including Chronobiology International, Environmental Science and Policy, International Migration, Journal of Regional Science, Regional Studies, Space and Polity, Socio-Economic Planning Sciences, Urban Studies, etc.

1 Introduction

The consumption of fuel by motor traffic constitutes nearly half of its worldwide consumption (Dings, 2008; OECD, 2008). The burning of fossil fuel by motor vehicles causes the emission of carbon dioxide (CO2), a pollutant considered to be responsible for the ‘greenhouse effect’ (Tobol and Keinan, 2008). The relative contribution of traffic to the overall CO2 emission worldwide is on the rise, from 21% in 1990 to 28% in 2006, while, during the same period, emissions by other fuel consumers decreased by some 3.1% (ECMT, 2007; Kahn et al., 2007). In Israel, like in other developed countries, road transportation contributes approximately to 20% of the overall emission of CO2, with private vehicles contributing to about 75% of total gasoline consumption and public transportation being responsible for another 25% (Tobol and Keinan, 2008). According to Israel Central Bureau of Statistics, the total annual consumption of gasoline by public transportation in Israel is estimated at approximately 1,265,500 tons of fuel, reaching about US$1.6 billions, at current prices (ICBS, 2009). Any reduction of gasoline consumption would thus result in environmental benefits as well as sizable financial gains (Haworth and Symmons, 2001a,b).

‘Egged Ltd.’ bus company in Israel as a case study 3

This paper reports the results of a field experiment, carried out at the Haifa branch of the Egged Ltd. bus cooperative, which is the largest privately owned bus company in Israel, currently employing some 6,317 workers, of whom 4,167 are bus drivers (Gressel, 2008). The goal of the experiment was to investigate if and to what extent two different strategies (professional training towards economical driving and financial rewards given to drivers reducing gasoline consumption) may affect gasoline savings. This paper starts with a brief discussion of various strategies of gasoline saving with a focus on changing the behaviour of drivers. Next, the methodology used in this study and its results are introduced. And, the final section of this paper discusses limitations of the present analysis, introduces the directions for future studies and formulates recommendations for gasoline saving by mass transit companies.

2 Gasoline saving – benefits and strategies

EcoDriving is a general term used to describe different driving techniques whose purpose is to reduce fuel consumption (Zarkadoula et al., 2007). EcoDriving includes different means aimed at helping drivers change their driving behaviour, leading to reduction in gasoline consumption. Among other things, it includes advertising campaigns, training of drivers in theory and practice, installation of informational devices in the vehicle, technical aid to drivers and introduction of EcoDriving into driving lessons (Haworth and Symmons, 2001a,b; Manfred and Oliver, 2005; Smokers et al., 2006). Training drivers in gasoline saving driving techniques is an effective way by which reduction in gasoline consumption can be achieved. Thus, according to Vangi and Virga (2003), up to 25% of fuel can be saved by drivers if they adopt correct EcoDriving techniques. In several studies, it has been also shown that changes in driving parameters (such as changes in speed and changes in acceleration) help to reduce fuel consumption. Thus, e.g. in a research conducted in Athens, Greece, Zarkadoula et al. (2007) studied drivers of the Thermo Bus Company, who were trained to drive in a way that minimises gas consumption. Fuel consumption in this group of drivers who underwent professional training was reduced by 4.5%. However, the fact that drivers know how to reduce gasoline consumption is not sufficient. They also need to be motivated to do so, and one mean of motivating them may be by rewarding them for reducing gasoline consumption. Indeed, education and training are known to be effective means for changing people’s behaviour (Haworth and Symmons, 2001a,b; Lehman and Scott, 2004; Manfred and Oliver, 2005; Smokers et al., 2006; Vangi and Virga, 2003; Wåhlberg, 2008; Zarkadoula et al., 2007), and the same is true for financial rewards (Doucouliagos, 1995; Hills et al., 1994; Martocchio, 1998). According to Lehman and Scott (2004), financial rewards can motivate people to behave in a desired way, and education can provide people with the knowledge necessary to implement the behavioural means by which a certain outcome may be achieved once people are motivated to achieve that objective. The goal of the present study is to examine both the unique and the combined potential of each of these means to bring about reduction in gasoline consumption by public transportation derivers. The study thus aims at extending the understanding of the means by which EcoDriving can be achieved. Firstly, an extensive literature survey

4 S. Saadia, S. Hareli and B.A. Portnov

carried out by Wåhlberg (2008), shows that the majority of studies in the field of EcoDriving, carried out to date, have been dealing with private transportation, while articles on public transit are scarce. Secondly, that survey also emphasises the importance of the instructional factor in EcoDriving as a means to reduce fuel consumption and change in drivers’ behaviour. By focusing on how education along with financial rewards affects gasoline consumption of professional drivers in the public sector, the research adds important understanding of the determinants of EcoDriving.

3 Methods

Egged Ltd. is the leading public transit corporation in Israel, which was established in 1933 during the British mandatory period. At present, the corporation carries more than one million passengers per day over an overall distance of more than 810,500 km. The company operates nearly 45,000 bus routes and has more than 3,033 buses in its fleet (Gressel, 2008). The company has 35 branches throughout the country, which employ some 6,317 workers, including 4,366 drivers and supporting technical staff (Gressel, 2008). According to the corporation’s department of fuel, about 130,000 tons of gasoline is consumed annually by Egged’s buses.

3.1 Research design

As hypothesised above, driving behaviour is expected to be influenced by drivers’ motivation to save gasoline as well as by the drivers’ awareness of driving practices that help to minimise gasoline consumption. To verify this assumption, a field experiment was carried out. The experiment took place in two operational branches of the corporation in the city of Haifa – Neve Sha’anan and Hof Ha’Carmel (see Appendix). About 80 drivers of a mean age of 52.5 years and an average of 28.5 years of professional driving experience were randomly chosen for the study (see Table 1). Participants were randomly assigned to one of four groups combining the rewarding factor (financial reward vs. no reward) and the training factor (training vs. no training) in a 2 × 2 between-subjects full-factorial design. The average age and average years of professional driving experience were similar across groups (see Table 1). The experiment was carried out during a transitional season of the year (October 2008–February 2009) so as to take an advantage of the mild local weather (18–20qC during the daytime). During this period, no air conditioning was used either for cooling or heating, which may influence the amount of gasoline consumption, thus causing potentially biased estimates. The study was carried out in three phases. At the first stage of the experiment, the drivers’ fuel consumption per kilometre was registered during 20 working days. At the second stage of the experiment, one full-day training session was performed with two groups of drivers (see Table 1). The training was performed by a certified instructor from the corporation’s driving college and dealt with the following topics: proper planning of the trip (especially before sharp slopes and traffic lights), acceleration, maintaining the correct rpm operation, efficient gearbox operation and shutting down the engine during breaks.

‘Egged Ltd.’ bus company in Israel as a case study 5

Table 1 Basic characteristics of the drivers’ groups participating in experiment

Professional experience Age (years) (years) Group number Factor activated Mean SD Mean SD 1 Financial reward 54.0 6.33 29.9 6.62 2 Training 50.0 8.98 25.0 9.87 3 Training + financial reward 53.6 8.01 29.8 8.60 4 Control group 52.5 10.06 29.4 10.32

Inter-group difference (F-statistic 2.455n.s. 2.662n.s. and its significance level) Note: n.s., not significant.

In addition, two groups of drivers (one of whom underwent professional training and another who did not) were offered financial incentives for each litre of gasoline saved. In particular, each driver in these groups was offered a monetary equivalent of 30% of the gasoline savings he achieved. At the last phase of the experiment, fuel consumption per kilometre travelled was calculated for each group of drivers and compared with their own performances before the experiment. Data gathering (the number of kilometres travelled and fuel consumption) were performed by the corporation’s gas station attendants using designated forms. The forms were processed into a computerised database and verified by Egged’s department of economy. The number of kilometres per litre of gasoline was then calculated for each driver in the study cohort. Prior to every stage of the experiment, technical operability tests (including air pressure in the tires) were conducted on the vehicles taking part in the experiment. To minimise confounds stemming from a possible leakage of information between groups, the drivers who took part in the experiment were requested to maintain strict confidentiality about all aspects of the study.

4 Results

The average rates of fuel consumption by drivers in each group, before and after the factor activation, are reported in Table 2. Specifically, a series of paired T-test comparing the pre-manipulation gasoline consumption with the post-manipulation consumption shows that the average efficiency of fuel consumption (kilometre per litre of gasoline), following the activation of the factors is higher than that prior to the activation of the factors for groups 1–3 (financial reward, training and combination of the two, respectively) but not for the control group. While drivers who did not receive either training or financial compensation (the control group) did not show any significant change in their gasoline consumption (ǻ = 1.1%; p > 0.2), drivers who received both professional training and financial reward for each litre of gasoline saved showed an average reduction in gasoline consumption by some 7.3% (p < 0.001). Drivers who received only professional training reduced their gasoline consumption by an average of 5.4% (p < 0.5). Concurrently, the drivers who received only financial reward reduced their gasoline consumption by the average of 5.0%, relative to their ‘pre-treatment’ performance (p < 0.001).

6 S. Saadia, S. Hareli and B.A. Portnov

Table 2 Differences in the drivers’ performance before and after the experiment (paired sample t-test and one-way ANOVA)

Fuel consumption Fuel consumption (km/L) (km/L) prior to the after activation of the activation of factors factors Group Factors activated Mean SD Mean SD Change(%) t p 1 Financial reward 1.73 0.18 1.82 0.16 5.00 3.96 <0.001 2 Training 1.65 0.17 1.75 0.18 5.40 2.41 <0.05 3 Training + financ 1.79 0.25 1.91 0.18 7.30 3.78 <0.001 ial reward 4 Control group 1.83 0.22 1.85 0.21 1.10 1.13 0.272

Difference 2.455n.s 2.662n.s. 3.37n.s. between groups (F-statistic and its significance level) Note: n.s., not significant.

Although all treatments reduced gasoline consumption relative to the baseline consumption prior to the treatment (p < 0.05), the ‘treated’ groups showed no significant differences in overall average consumption levels when compared to each other (F = 2.46–3.37; p > 0.05). That is, the reduction in gasoline consumption was relative to prior use in each group, except for the control group, but all the treatments resulted in similar levels of reduction in the consumption of gasoline.

5 Conclusions and recommendations

The research experiment, whose results are reported in this paper, was aimed to investigate whether gasoline can be saved by training and financial stimulus given to bus drivers. During the experiment, one group of drivers underwent one-week training on gasoline-saving techniques, carried out by a professional instructor. Two other groups of drivers received no such training. A financial incentive scheme, encouraged to save gasoline, was also applied to two groups of drivers (one of which received professional training and another did not). As the comparison of the average rates of fuel consumption by drivers in each group, before and after the experiment, indicates, both financial reward and instruction showed similar results in reducing gasoline consumption (5–6% of gasoline saving), and the level of reduction in this groups was similar to that achieved by a combination of these factors (7.3%). This may be explained by the possibility that each strategy caused drivers to reduce the gasoline use at the maximum level possible (i.e. a ceiling effect), and thus the combination of the two strategies, though effective in its own right, was not much more effective than both strategies when employed independently. The fact that financial rewards alone without training leads to similar effects as does training may suggest that the drivers were experienced and knew how they could save gasoline when they are motivated to do so. Training, hence, in this situation, may have just made the drivers more aware of the need to save gasoline rather than provide them with the knowledge of how it could be achieved.

‘Egged Ltd.’ bus company in Israel as a case study 7

The results obtained appear to be very similar to the results obtained by a study carried out in Greece by the Center for Renewable Energy Sources, which showed a 4.5% rate of saving in fuel consumption using EcoDriving techniques (Zarkadoula et al., 2007). The rates of fuel consumption measured in the experiment (1.7–1.9 km L1) appear to be slightly lower than those specified by the vehicles’ manufacturers (approx. 2.0–2.3 km L1). This may be due to the stiff terrain of the study area and the average age of the vehicles participating in the experiment (10.6 years). Although the study indicted a relatively small reduction in gasoline consumptions, this reduction (within 5–7%) is not negligible, considering the large amounts of fuel consumed by public transit companies overall. For Egged Ltd., for instance, this means saving of around US$ 1–1.2 millions per year, which is a significant amount of money for a company of this size. The results of the present research may thus have important implications for mass transit companies by enabling them to lower fuel consumption and reduce operational costs. In particular, the research may serve as a milestone for further research that will focus on EcoDriving, fuel consumption, reduction in air pollution and passenger convenience. The research was carried out in the leading mass transit company in the country and was met with the full support of the corporation’s management and its full cooperation throughout the experiment. The company’s drivers were at the disposal of the researchers, in addition to all the necessary operational resources, which certainly influenced the credibility of the results. The support of Egged’s management for this project was unequivocal, and this ensured openness and cooperation from all the operational units of the organisation. This situation undoubtedly contributed to the success of the experiment. It is thus possible that similar experiments may be met with understanding and institutional cooperation if carried out elsewhere, due to the fact that privately operated mass transit companies are likely to be highly interested in reducing operational costs in general and gasoline consumption in particular. Lastly, it should be noted that the present research experiment examined the potential reduction in gasoline consumption in the short term. Further studies should thus try to assess the medium- or long-term potential of gasoline saving by the combination of financial incentives and retraining of mass transit drivers. Thus, although both training and financial compensation appeared to be effective in reducing gasoline consumption, it is not clear whether such strategies would be effective in the long run. In other words, how long such strategies can maintain reduced gasoline consumption is yet to be determined. However, this goal can relatively be easily achieved since transportation companies can easily measure gas consumption, if not per driver then per vehicle. Hence, within a given branch of a transportation company, it is feasible to maintain a permanent assessment of gasoline use, although there appear to be no previous studies on whether drivers, who were encouraged to save gasoline by offering financial incentives, may continue saving gasoline even if the compensation was given for a short period of time. However, one early study on gas saving by households (McClelland and Cook, 1980) does suggests that the impact of collective rewards tends to be short-lived and that its effect decreases over time even if the reward is still given, suggesting a short-term effect of financial rewards in general (Abrahamse et al., 2005). It is not clear though whether these findings are fully applicable to professional drivers whose performance is evaluated personally. At least in the short run, our results

8 S. Saadia, S. Hareli and B.A. Portnov

suggest that compensating drivers is an effective mean for reducing gasoline consumption. Overall, the amount of money paid to drivers for gasoline conservation is lower than the amount saved so that the company saves money overall, thus rendering the financial compensation practice cost-effective. This is, therefore, a strategy that can be sustainable from a business perspective. Further research should thus take these suggestions into consideration.

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Bibliography Avimelech, Y. and Ayalon, O. (2006) National Priorities in Environmental Issues in Israel. The Samuel Neaman Institute, Technion, Haifa, pp.53–91 (in Hebrew). European Environment Agency ‘EEA’ (2008) Success Stories within the Road Transport Sector on Reducing Greenhouse Gas Emission and Producing Ancillary Benefits. Report 2/2008, pp.18–22. Igarashi, T., Yagi, Y., Tamura, S. and Masaki, K. (2006) ‘Effects of ecodrive using ‘Drive manager’’, NEC Technical Journal, Vol. 1, No. 1, pp.110–114. Israel Ministry of Environmental Protection (2010) Available at: www.sviva.gov.il, Accessed on June 2010. Karasenti, A.A. and Leventhal A. (2002) ‘Air pollution, drifting particles and human health’, Harefuah, Vol. 141, pp.71–468 (in Hebrew). Michael, R., Gregg, M., Philippe, C., Corinne, L., Josep, G., Gernot, K. and Christopher, B. (2007) Global and Regional Drivers of Accelerating CO2 Emissions. Harvard University Press. Van Maanen, J. (1977) Organizational Careers: Some New Perspectives. London: J. Wiley. Yogev-Baggio, T. (2006) ‘An examination of the influences of air pollution in the Hadera power station on changes in lung functions among children’, Thesis submitted for the completion of MA Studies, Haifa University (in Hebrew). Zvirin, Y., Tartakovsky, L. and Gutman, M. (2006) Estimation of Emission Factors (EF) for Heavy-Duty Diesel Trucks in Israel. Technion, Haifa, Israel (in Hebrew).

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Appendix

Basic characteristics of the Egged branches covered by the research experiment

Average annual distance Annual consumption of travelled in 2007–2008 Branch name No. of employees No. of drivers fuel in 2007–2008 (L) (km) Neve Sha’anan 251 210 5,528,346 9,776,175 Hof HaCarmel 222 211 4,626,455 7,502,491 Note: Drawn for the Egged’s database.