For more than 30 years, this Michigan based company has brought commuters together while carving out a transportation niche
Written by Gabe Perna Produced by Mike Magno Dan Rather once astutely observed, “Americans will put up with anything provided it doesn’t block traffic.” It’s true; commuting can be one of the most frustrating things about one’s workday. Fighting traffic, often alone in your car, and watching your earnings pump away in gas money, you already feel half-drained by the time you step foot in your office.
Enter the concept of vanpooling. Since 1977, VPSI, Inc. has provided vanpooling services to commuters in throughout America. Jeff Henning, CEO and President of VPSI, was one of the original employees at the company. With his experience, he knows the benefits of vanpooling and how it compliments conventional transit. Henning explains, “People join vanpools because of the economics and stay for the camaraderie.”
“People usually join because they think it’s a sound economic decision. However, when you ask why they stay or have recommended it to others, there is a social answer. People like being with other people. They are negative about that at first. Then they get in, become civilized and eventually form a tight knit community. You eventually get comments like, ‘I can’t imagine driving alone, I’d miss the camaraderie,’” says Henning.
Niche commuting
Steve Pederson, VP of Fleet and Risk Management, has been at VPSI nearly as long as Henning since he joined in 1980 fresh out of business school. Along with the camaraderie, he sees vanpooling attracting a different kind of audience than conventional transit.
“A lot of our customers are suburbanites; those not served well by conventional transit,” explains Pederson. “They don’t even have another choice. This is evidenced by the fact 97 percent of our riders were either driving alone or, at best, carpooling before they started vanpooling. Only three percent came out of a transit mode. It’s a very different group of people than those using conventional transit. Vanpoolers are people without public transit alternatives – their alternative is driving alone to work.”
Of course, VPSI offers more than just a ride to work in a van. The company handles the formation of the vanpool group based on location and convenience. They also provide the maintenance and repair services for the van as well as the payment of the bills. It’s this thorough service – along with a van to drive – which has allowed this company to become the largest private provider of commuter vanpool transportation in the world.
Green push
Regardless of the reason why people join a vanpool, VPSI has seen significant growth in people using their services over the last few years. This was especially true in 2008 as gas price skyrocketed and interest in sustainable business practices grew. Henning notes the company enjoyed a substantial increase in riders and new vanpool starts over the last year.
“Probably the biggest stimulus has been the rapid rise of gas prices. When gas got over four dollars a gallon our phones were ringing off hook. In 2008, at the sweet spot of the gasoline price hike, we organized, 200 new vehicle groups. We went somewhere in the neighborhood from 3,800-3,900 to a little over 5,000 groups. And it has maintained for the most part. Obviously, we’ve slid back a little from that highest peak, mostly due to the economy and layoffs in employment. We’ve only lost one to two percent of our vanpool groups this year,” says Henning.
The general acceptance of the green movement has spurred growth as well. Well before sustainability was such a popular buzzword, VPSI embraced sustainable business practices and advocated more efficient use of our national infrastructure. The company’s website has loads of information on vanpooling’s positive impact on traffic congestion and air quality and even has a section for kids. Pederson notes their advocacy has been a long journey for him and Henning as the company began in response to the energy crisis of the 1970s.
“We got into ridesharing for very altruistic purposes,” says Pederson. “There certainly wasn’t a fortune to be made. The fact that the world is embracing clean air strategies brings a smile to our faces because we’ve been doing it for 30 years by getting people out of their cars.”
Public/private
When the company began in 1977, private vanpooling was seen mainly in a different light than public transit. While this differentiation still exists in some forms, the company’s growth can be attributed in great part to partnerships with the public sector. In many markets VPSI works directly with the state DOT, or local transit authorities and government entities.
Fiscally these partnerships are of great benefit to both VPSI and their public sector counterparts. VPSI has many successful, longstanding private/public partnerships in Brevard County, FL, Michigan, Hawaii, Houston, TX, Los Angeles, Miami, and many other urban areas
“All of the public funding helps to lower the costs for the riders. Most people join because they think it’s a great deal and it’ll save money. To attract people, the lower we can keep those fares there is more interest generated. When we are working in a contract with public entities, we are able to report ridership statistics through the national transit database which can enable a region to get back a larger percentage of the national pot from the FTA,” explains Henning.
Keep on keeping on
A strong relationship with vendors is one reason for VPSI’s success. AmeriFleet, CE White, TransGlobal, Bridgestone, Firestone, Michelin and Wright Express were just a few of the companies mentioned by Henning and Pederson as important suppliers. They also mentioned the company works extensively with Ford, Chrysler and GM as well.
Employee empowerment is another crucial cog in the VPSI machine. “I’ve got an exceptionally skilled staff and they run their specific areas without much pressure from me. I’ve found the best people for the jobs I need them to do. Accountability is not an issue, they hold themselves accountable,” explains Pederson.
With this type of employee dedication and through its niche-driven service, VPSI looks to continue to service suburban commuters throughout the US. “What makes us unique is our single, long-term focus on an interesting niche effectively served by experienced professionals that have spent a life building the industry,” concludes Henning.