Tag Archives: cars

Why can’t we internalize the cost of commuting?

Posted on by
1

Yesterday I was biking from Saint Paul to Minneapolis at rush hour. In to a stiff headwind, which shaved four or five miles per hour off my speed—more on downhills. However, when I crossed over Interstate 94 (*) just east of the Mississippi, I smiled. Both sides of the highway were parking lots. I probably wouldn’t have gone any faster in a car.

I hate traffic. Actually, I should rephrase that. I hate being stuck in traffic. I love the concept of traffic, as long as it is not “solved” by building more roads. Livable cities have traffic. (They have transit as well. The ones with traffic and no transit, well …) I continued on a few blocks to my destination and, while I was not particularly happy fighting against the gale, I was glad I wasn’t giving myself ulcers in a traffic jam.

There have been several recent articles about the fact that people are unable to properly calculate the cost—both economically, the time cost and the emotional distress—of a long commute. It’s been called the commuter’s paradox. The long and short of it comes down to the fact that people, when making an important decision (where to live) will worry about rare, very inconvenient occasions more than frequent and not-quite-so-inconvenient-but-still-bothersome occasions. In other words (mostly those of Ap Dijksterhuis of Radboud University in the Netherlands):

Consider two housing options: a three bedroom apartment that is located in the middle of a city, with a ten minute commute time, or a five bedroom McMansion on the urban outskirts, with a forty-five minute commute. “People will think about this trade-off for a long time,” Dijksterhuis says. “And most them will eventually choose the large house. After all, a third bathroom or extra bedroom is very important for when grandma and grandpa come over for Christmas, whereas driving two hours each day is really not that bad.” What’s interesting, Dijksterhuis says, is that the more time people spend deliberating, the more important that extra space becomes. They’ll imagine all sorts of scenarios (a big birthday party, Thanksgiving dinner, another child) that will turn the suburban house into an absolute necessity. The pain of a lengthy commute, meanwhile, will seem less and less significant, at least when compared to the allure of an extra bathroom. But, as Dijksterhuis points out, that reasoning process is exactly backwards: “The additional bathroom is a completely superfluous asset for at least 362 or 363 days each year, whereas a long commute does become a burden after a while.”

In addition to the environmental catastrophe of building and heating (or air conditioning) superfluous, unused rooms, people have convinced themselves that they need this extra space, and pay dearly for it: first when they buy something larger than necessary, and then when they spend hours a day in the car because they can’t get anywhere without turning the ignition key. (Has no one heard of a fold-out bed or a hotel room? It’s a lot cheaper than a bigger house.)

The article also goes in to the issue that the worst thing about traffic isn’t that it’s bad, but that it’s unpredictable. With all sorts of technological advancements, the best we can do now are sporadic signs above the Interstate telling us how long we have left in this particular hell. With a little money, we could make the trains and buses run on time (the worst thing about a poorly functioning transit system is, generally, its unpredictability). Making traffic predictable, on the other hand, is all but impossible.

There’s another piece up recently regarding a book about car dependence. It goes in to more of the economics, that we don’t internalize the costs of driving because they are so ingrained in the American psyche. It’s really a problem, and one that will take decades to fix. Whether the current economic status (and, yes, economics, not environmentalism, will be the driver of less automobile use) or higher gas prices will make a change is yet to be seen. However, it may be a generational change, and amongst a generation of always-plugged-in folks who see time in a car for what it is—almost completely wasted—we may see more people who are less interested in driving the latest, greatest shiny new automobile.

[ * Why is I-94 bad going west? Because in the course of about three miles there is a lane drop on the right (Riverside), a lane drop on the left (35W), two horrible merges on the right (from 35W and 11th), and then a sharp curve in to the Lowry Tunnel. There are no lanes which don’t disappear or have just brutal merges. You can add all the suburban lane miles you want, but it won’t address these bottlenecks.]

Soft factors that benefit car sharing

Posted on by
2

Since I work for a car sharing organization, people often ask me what makes a city or neighborhood ideal for car sharing. While certain factors are easily measurable or obvious (density, walkability, and mixed use development), others are a just as important but not as apparent. I’ve come up with three such “soft factors” (soft because they are not hard measurements which can be gleaned, say, from census data). These seem to be quite indicative of whether car sharing will thrive, and seem to be good for creating livable cities as well—as long as livability is not intertwined with car ownership.

They are the availability and cost of parking; the frequency, reliability and speed of a transit network; and the prevalence of urban congestion.

1. The cost and availability of parking. Owning a car is expensive. However, once you start paying for parking, you’re throwing money at little more than a 100-square-foot plot of ground for your car not to drive. Once this cost gets over about $100 a month, it contributes significantly to lower car ownership. Enmeshed with this factor is the availability of parking. It’s almost always possible to find street parking if you look hard enough. But if you have to circle a block six times, jockey your car in to a tiny spot, and/or move it every third day to the alternate side of the street, it makes car ownership more of a burden than a freedom.

Cities where car sharing thrives are not cities where it is easy to find a parking space. One of the major reasons car sharing took off in cities like Boston, Philadelphia and San Francisco is that they were able to advertise that their cars always had “reserved parking,” a godsend for residents who had to deal with expensive private lots or arduous on-street spaces. All of the sudden, they could take a two hour car trip, get home, and not have to worry about how many blocks away the nearest spot would be. Or, if they gave up their private spot, they might find a couple grand in their pocket at the end of the year.

2. The frequency, reliability and speed of a public transit network. The three adjectives here generally go hand-in-hand-in-hand, with the exception of a minor explanation regarding speed. Speed is relative. Sure, antiquated subways in Boston, New York and Chicago may creep along through ancient tunnels or els, but compared with the gridlock above (or below)? Well, private right-of-ways do have their advantages. And are they reliable? Well, about as reliable as highways which, at any time, may devolve in to a traffic jam.

The most important piece of the transit puzzle seems to be frequency. Or to put it differently, “can you walk to the nearest bus line and get on a bus without knowing a schedule.” This generally means that most lines should have midday headways of 15 minutes or less. And while grade-separated, rail transit carries a large fraction of riders in many of these cities, reliability and frequency seem to be more important to car sharing than the exact mode. Seattle, for example, was until a few months ago a bus-only transit system (We’ll ignore the monorail and one-mile streetcar.) and the new light rail line doesn’t serve many high-car sharing neighborhoods. Still, most lines run every ten or fifteen minutes all day and in to the evening, and while they’re not particularly fast, they come pretty often.

Do a lot of car sharing users walk or bike? Yes. But if it’s raining, or cold, or they just want to make use of transit, the ability to walk to the corner and not have to wait 25 minutes reduces the need and desire to own a car. (Especially when it might take that long to find a parking space; see factor 1 above.)

3. The prevalence of urban congestion. This is probably the most confusing of the three factors, since I don’t mean congestion on freeways leading in to the city in the morning and out in the evening. What it refers to is the prevalence of random traffic jams and tie-ups. In other words, how often during non-peak periods (middays, evenings and weekends) is there horrible traffic for no apparent reason? How often do you get in your car and, because a lane has been blocked off or a light has malfunction or an inch of snow has fallen, a trip that should take ten minutes takes half an hour? How often do you sit and watch a light a quarter mile ahead and realize that there are 40 cars ahead of you and only two are making it through each cycle? And how often is there some event—a parade or a race or a visiting dignitary—which so screws up the traffic system that no one in their right mind would drive downtown?

In cities which support car sharing, everyone’s had the experience of sitting in traffic on a Saturday afternoon for, well, no apparent reason. Urban congestion is not just that there are too many cars on the road, but that they are dynamic urban environments which sometimes don’t mesh with the automobile. If one small protest or minor accident closes off a main street corner, it can cascade across the street network, creating gridlock at a time it’s not expected. Of course, as anyone driving in any of these cities knows, there’s no time when there’s never been traffic.

Are these the only three factors which contribute to a dynamic car sharing market (or, in other words, make owning a car so unpalatable that many people do without)? Of course not. Also important are population and employment density, walkability (which has to do with these factors) and, to a small extent, the availability of bicycle facilities, the cost of gas, planning ordinances, physical geography and the like. But, from what I’ve seen, these are some of the most important factors, and they not only create a city with good car sharing prospects, but one in which people actually want to live.

Cash for clunkers: proof that a gas tax would work?

Posted on by
Reply

There has been a lot of debate as to the overall efficacy of the Car Allowance Rebate System, (legislators love acronyms) colloquially known as “Cash for Clunkers.” On a few subjects there isn’t much contention: it has been “successful” in getting people to buy new, and generally more efficient, cars. In other words, if people have a financial incentive to trade up to a more efficient car, they will do so. Especially if the incentive is (probably) set too high.

So, I’m not down on Cash for Clunkers. First of all, it’s proof that a government program can work. It was quick and effective and probably stimulative (more so than environmental)–most of the cars in the program were made in the United States. That’s good in that it may help convince some anti-government types that government is not always the problem. Second, it is not increasing the number of cars on the road. While it is certainly not perfect, a far more worrisome development would have been a program that mailed out checks to people to buy new cars; a program which I could see government embracing. Third, it can’t be debated that the new cars on the road are, in fact, less polluting than the current ones. While not everyone went out and bought the newest Prius (although many are), a 60% gain in efficiency is nothing to scoff at. Even if these cars may be driven more than their predecessors (since they’ll be new and reliable and, well, not clunkers) there will likely be an overall decrease in emissions.

On the other hand, the program could have, obviously, been better administered. First of all, $3500 to $4500 is a lot of money. I thought about buying a clunker, trading it in, buying a new car and turning around and selling that–even with the title transfers, time involved and money lost to depreciation, I’d probably clear a couple grand. (I’m not sure, however, if I could have qualified with a new-to-me clunker.) In any case, smaller sums–$1000 to $2000–would have likely resulted in many sales but not the veritable run on the bank that car dealers have recently seen. In addition, there was no provision for people with clunkers who wanted to get out of car ownership completely. The only way they could do so would be to trade in the clunker, buy a new car, and turn around and sell it. Maybe the next program should be that if you bring in an old car, the government will give you a year-long transit pass for the agency of your choice and a $1000 credit for your local car sharing agency. This, too, would cost less than $3500, and dramatically reduce emissions and the number of cars in the road. (Yes, I have a bit of a vested interest in the second half of this proposal.)

While the transit-car sharing idea is a bit of a pipe dream, politically, one which is less of one would be a better-graduated system. The CARS program had hard cutoffs. If you car gets tenth of a mile per gallon over the limit, you get nothing. A tenth less and nearly $5000 can be in your pocket. Furthermore, you get this money whether you upgrade to a still-overpowered sedan or SUV getting in the low 20s or a Prius (or similar) getting twice that. So what would make more sense would be a graduated system. Trade in an 18 mpg car and go to a 22 mpg and we’ll give you a few hundred dollars for your trouble. Go from a 14 mpg SUV to a Prius (or a similarly “clean” car), and you can cash in on the full $4500. Or more.

That’s all well and good and probably won’t happen. Nor will credits for transit commuters, cyclists and others who choose not to drive. It costs too much money and isn’t terribly stimulative and probably doesn’t have the votes. Furthermore, the CARS program was very simple. Your vehicle either does or does not qualify, and you can get either $3500 or $4500. For these others, we’d need charts. And if you put mathematics in between an American consumer and a deal, they’re far less likely to do it. In other words, if you make it as confusing as doing your taxes, people are going to like it about as much.

There is a relatively simple way to achieve nearly all of these objectives. It would require little administration, since the methods of collection and distribution are already in place (and have been for years, and work fine). Yet, for a variety of reasons, it is a political third rail. It is, of course, the gas tax.

The federal gas tax is 18.4 cents per gallon. That’s right. 18.4 cents. Most states have their own taxes on top (Alaska is the only holdout) raising the total tax as high as 60¢, in New York State. The federal portion was last raised in 1991. Yup, 18 years ago. Since then, prices have increased 58%. Had the gas tax kept up, it would be 29¢ today. The gas tax in 1991, however, accounted for about 17% of the cost of a gallon of gas (at that time, gas, with the tax, cost about $1.20). If gas taxes were based on percentages, they would be about 43¢, and last summer would have crept to nearly 70¢.

So, it’s obvious that gas taxes are low. And it’s also pretty obvious that there is some climate stuff going on, and that having people use less gas would be beneficial. In addition, using less gas would keep prices lower and supplies more stable, as well as encouraging energy independence. These are all good externalities, but, perhaps most importantly, the gas tax, if it is adjusted for some rural populations and low income communities, is a very efficient way to raise tax revenues.

Mention raising the gas tax and you’ll hear two responses. One is “it’s not politically possible.” The other is “it’s regressive.” The first is, sadly, perhaps true. The second is not, and, particularly when it is offset with some sort of tax credit, potentially a straw man. When the tax was last raised, 18 years ago, this was debunked. In several manners, it has to do with how you look at gasoline: whether it is a necessity or a luxury. If it is a necessity, then, yes, the tax is likely somewhat regressive. This is the reason we don’t place punitive taxes on clothing and food: you need both to survive. Gasoline, however, is a different story. In New York City, 55% of the residents do without a car. Yes, it’s a special case. But is there anywhere where more than half the residents do without food or clothing? In several other major cities, more than a quarter of households don’t have cars. For some it is an economic decision. For others, it is about lifestyle. But it is rather obvious that, especially in areas with decent public transport, owning a car is not a necessity.

And for these people, which number in the millions, a gas tax is not regressive at all. Many of them are the same people who the highway lobby defends; the people for whom a gas tax will be painfully regressive. However, as long as they aren’t driving a gas tax will have no effect, although it might drive more people towards transit use and increase service levels.

The other worrisome issue are those people who live in rural areas. For them, higher gas taxes will result in higher costs, because living at a low density tends to require a lot of driving. And for farmers, a rise in gas prices will create a rise in production costs, for both mechanized agriculture and transportation. There are two ways of dealing with this issue. One is direct subsidies to growers to buy cheaper fuel, although such a system would be fraught with fraud and inefficiencies. (If we’ll sell you 10 gallons of cheap gas, is there much of an incentive to economize and only use nine?) A simpler way, of course, is to pass the costs along: food prices might rise a bit, but everyone would have increased costs, and everyone would pay. In addition, there would be a fine incentive to save fuel, which would both reduce costs and be more environmental. For those who live rurally for the lifestyle, they’ve made a choice to live a car-dependent (and fuel-dependent) lifestyle. It’s only fair that they pay more.

Finally, there is a way to make sure that a gas tax would both not hit the poor especially hard and be stimulative as well: return the extra money spent on gas, in advance, as a tax credit. Estimate the amount of gas used per year (recently about 140 billion gallons) and the amount of money that, say, a $1 gas tax increase would raise (with less use, about $120 billion). Knowing that that revenue increase was in store, the government could turn around and write a $500 check to every tax payer in the country at the beginning of the year. A nice letter could be enclosed:

We know that we’re increasing your gas tax. Here’s $500. If you need it for gas, use it for gas. If you want to buy a more efficient car, here’s some help to buy a new car. If you are interested in local transit service, here’s a website where you can find out more. Here’s information about car sharing, car pooling and other fuel saving techniques, too.

Oh, and enjoy the $500!

People worried about fuel costs could save the money for the year. Many others would spend the money in ways that would stimulate the economy. Others would, in the face of higher gas prices, use it for transit passes. And it would be a very progressive tax rebate: it would benefit those at lower income levels far more than those at the top.

In the long run we might, as a society, want to use this money to fund more effective transportation policies. Maybe the amount would decrease by $50 a year as people got more used to higher taxes, by driving more efficient vehicles or driving less. Any extra money could be put towards funding expansion and operation of transit agencies, and building new energy and transportation networks (as the current gas tax is earmarked for transportation). In the short run, as has been discussed in several places (including liberal blogs), consensus is that we can’t get everyone out of their cars tomorrow. But instead of expanding the Cash for Clunkers program, and making it more top-heavy and unwieldy, a gas tax would likely give us better results with easier implementation (since it’s already implemented).

And if everyone were promised a $500 check from the government, it just might be possible.