What a better transit system would mean for my small business

What do you think of when you ponder the relationship between small businesses and urbanism? Probably a shopkeeper up in arms about the loss of a few parking spaces near their business. And that’s totally fair. Both for you and the shopkeeper.

Small business owners often skew conservative. There are a lot of reasons for that, but a key one is that small businesses are not little big businesses. Having fewer employees, smaller assets, and lower sales, they are fundamentally resource-poor and this fact touches every aspect of a small business owner’s company and outlook.

Because the owner’s salary (which in 2016 averaged about $36,000 for women and $59,000 for men) is the business’s bottom line, they often fiercely contest an increase in the minimum wage. And because revenue isn’t high enough to support back-office departments like legal and accounting, small business owners are often opposed to new regulations that would increase their administrative burden. Small business owners’ cash reserves are also minimal, which means they have a hard time weathering external shocks — the pandemic brought that to stark relief.

If a corporation is a skyscraper, a small business is a late-stage Jenga game — instead of swaying with the winds of change, it’s wise to assume it will fall.

The “threat” of an urban agenda

In my view, all of these factors help explain why small business owners can sometimes have an inherently oppositional view toward changes in urban policy and the built environment. Any disruption of the status quo upon which their business is built is a potential threat to their livelihood.

While large investments in public transit and bold changes to zoning may benefit small businesses long-term, it’s difficult for owners to stomach the uncertainty that these changes bring in the near term.

For example, Purple Line construction in suburban Maryland, where I live, has threatened the livelihood of dozens of small business owners. These entrepreneurs claimed that the deterioration of road quality due to the project’s frozen status – including loss of parking and, in one case, a physical barrier to a storefront – have impacted their businesses’ viability. Local politicians had stepped up to help compensate these proprietors for reduced earnings caused by protracted construction. However, not every business owner will find themselves so lucky to receive support while they wait for a finished project that will ultimately help them.

That said, an urban agenda for the region would be an incredible boon to small businesses. I know because I own one. The company I founded in 2017, Well-Paid Maids, pays $22 per hour — well above DC’s $15.20 minimum wage — and offers a full benefits package. We are based in Takoma Park and employ 30 people.

We also operate a new branch in New York City. So by comparing our two markets and studying key business expenses, it’s easy for me to imagine how a Washington region with a better public transit network would positively impact my company.

How a more expansive, reliable transit system would cut my business costs

Currently, public transportation in the Washington region is not extensive enough to meet the needs of my business. My staff works where our clients live — everywhere from Rockville to Forestville and Greenbelt to Springfield — but our region’s transit system is geared toward major business districts that are dense, not residential areas that are more spread out.

Furthermore, my employees carry equipment and supplies, so the lack of walkability from many transit stops to our customers makes it a challenge for our staff to reach their destinations safely and comfortably. And because they usually perform two appointments per day, current off-peak headways would preclude on-time arrival for afternoon jobs.

As a result, everyone we hire must have a driver’s license and own their own car. My company reimburses our staff per the IRS mileage rate, which is $0.58 per mile. We also pay for a few additional costs associated with driving in the region. Between all these expenses, we pay about $35 to $45 per work day per DC employee for transportation, or about $770 per month at the low end.

If we could completely rely on public transit to move our DC staff around as we do in New York, our transportation costs would plummet. An unlimited MetroCard costs $127 per month in NYC, and we buy them monthly for our staff. As a result, our all-in transportation costs are around $6 per work day, a savings of roughly $34. At scale, this adds up quickly, and it’s why we can charge the same prices in NY as we do in DC despite paying a higher starting wage of $26 per hour there. A middle-range figure for an unlimited WMATA SmarTrip is $144, so the costs are broadly comparable.

In addition to these hard savings, there are operational benefits. For example, instead of recruiting from the limited pool of candidates who have a car, we could recruit any qualified person who wants to work for us. And while some train and bus delays are inevitable, they’d be a welcome change over the risk of costly, dangerous crashes while driving. Plus, increased housing density near transit means an increased, easily reachable customer base for my business.

Getting a return on transit

If I was able to move our DC staff of 30 from our current transportation arrangement over to an unlimited SmarTrip, my business could save roughly $190,000 per year. Using a 2022 Q1 run-rate for yearly projected expenses, this represents a savings of about 20% of our current budget.

So what would we do with the extra funds? We would pay for a less goofy-looking website, build a custom booking platform that can handle complex customer requests and appointment management, and hire another manager to help our operations staff. We could also expand to other services like landscaping or dog walking, start paying retention bonuses to our staff and upgrade our employees’ healthcare from a Silver plan to a Gold one. And of course, keep raising wages.

In short, we can do a lot, which is why I am so excited by the prospect of an urbanized future for Greater Washington. And I think if more small business owners could be taught to think through their potential benefits in this way, we’d have a new arm in our coalition fighting for better transit.