Other People’s Money

Good news! You can save money by selling your car and riding transit instead. The American Public Transportation Association (APTA) says the average person can save $8,500 a year taking transit instead of owning a car.

This is based on the AAA cost-of-driving formula, which says that driving costs an average of $0.54 cents per vehicle mile. Funny how Americans only actually spend $0.39 cents a vehicle mile, at least according to the Bureau of Economic Analysis. The difference? The BEA uses actual costs while AAA numbers are hypothetical.

So that might reduce the savings to only $6,100, which is still a lot. But the other big thing APTA is leaving out is the huge subsidies to transit. Transit subsidies amount to $0.61 per passenger mile. APTA assumed that, prior to giving up their car, the transit rider drove 15,000 miles a year. At $0.61 per mile, a transit rider who rides 15,000 miles a year gets about $9,150 in subsidies.

So you can save, maybe, $6,100 a year by imposing more than $9,100 in costs on other taxpayers. Good deal!

Share

59 thoughts on “Other People’s Money

  1. ws

    craig/nativepdx:“You don’t have the power to tell me what I can or cannot post.”

    ws: Clearly I don’t but you’re spreading lies w/o backing them up. How about we show some facts where only 280,000 (2%) of Metro residents use mass transit like you’re insinuating?

  2. Rivlin

    Well, obviously I’m looking for some numbers to quantify what you mean by “longer”.

    Good grief, are you really this stupid? There is no “quantification.” ANY trip of greater distance is a longer trip. A 5-mile trip is LONGER than a 4-mile trip. A 10,000-mile trip is LONGER than a 3,000-mile trip. Again, what part of this don’t you understand?

    This is not irrelevant.

    It is totally irrelevant. It doesn’t matter whether the user is paying the full cost of the trip or not. Someone is paying the costs. And they wouldn’t be willing to pay more for longer trips if those trips didn’t provide greater benefit than shorter ones.

    If someone walks 3 blocks to get an apple and another person drives 5 miles for an apple, under your methodology, the automobile is the “best” because it went further in miles.

    No, that is not my “methodology.” You persist in ignoring what I actually write and instead attribute to me positions and conclusions I have not stated and do not hold.

    Assuming the cost of the 5-mile drive is higher than the cost of the 3-block walk, if someone chooses the 5-mile drive over the 3-block walk it must be because he gets some additional benefit from that more costly trip. Such as a cheaper apple. Or a higher-quality apple. Or a greater variety of apples to choose from. Or protection from the elements. Or maybe some combination of those benefits, or some other benefit or set of benefits.

  3. the highwayman

    Rivlin said:
    It doesn’t matter whether the user is paying the full cost of the trip or not. Someone is paying the costs.

    THWM: I fully agree. That’s why it’s so stupid when people like the anti-planner complain money being spent on mass transit.

  4. Kevyn Miller

    people wouldn’t be willing to pay more to travel further unless they were getting a greater benefit in return.

    If people really were perfectly informed rational economic units that would be perfectly true. Your conclusion is false to the extent that that assumption is false. Maybe if Henry Ford had leased his cars on a per thousand miles basis instead of selling them, then maybe per mile would have become the basis of charging for registration insurance and deppreciation too, so that there wouldn’t be the current temptation to spread sunk costs over as many miles as possible.

    And because greater distance means greater benefit, “trips” is not a meaningful measure of transportation benefit. The benefit is a matter of both the number of passengers and the distance of travel. That is, transportation benefit is a matter of passenger-miles of travel, not “trips.”

    Again, only as true as the behavioural assumptions it is based on.

    Housing in low-density suburbs is generally cheaper than housing in high-density central cities.

    That’s true today but it’s the opposite of what was true when auto-centric suburbs frst became popular. There were obviously other percieved benefits that outweighed the greater travel costs.

    Average trip cost increases with average trip distance.

    Only variable costs increase. Definitely, with my car annual costs such as depreciation, insurance and registration add up to more than variable costs such as tyres, petrol and servicing. Doubling my annual mileage will only increase my mileage costs by around 30%.

    So cheaper housing is one of the benefits people need to get in return for paying the higher cost of trips in the suburbs as compared to central cities.

    Another potential benefit is the time savings of travel by car vs. travel by transit. And another benefit is the greater convenience of car travel.

    This argument, it seems to me, is the very one used by those advocating a more ‘balanced’ approach to land transport funding, although it may really only make sense when it is used to argue for less autocentric design of local roads – the ones funded by locals instead of from gas taxes.

    It is totally irrelevant. It doesn’t matter whether the user is paying the full cost of the trip or not. Someone is paying the costs. And they wouldn’t be willing to pay more for longer trips if those trips didn’t provide greater benefit than shorter ones.

    That is the whole point of the externalities/hidden subsidies argument. If the full cost of the trip is being shared between the direct beneficiary of the trip and the wider community then the individual’s cost/benefit analysis for their trips is distorted. Is wider community willingly paying or just victims of the taxman/politicians/planners deciding for them?

  5. mattb02

    THWM: That’s an opportunity cost, not a benefit.

    Idiotic comment of the day. You’re a dolt. You know just enough to say something this stupid.

  6. dmccall

    I would love to know what the costs/passenger mile of limo and taxi services are. At times I feel that our city would save a lot of money if they would introduce an on-demand limo service instead of a light rail system.

Leave a Reply