Tuesday, November 30

High Gasoline Prices and Bike Commuting


Coffee I Make is Better Than This,
But I'm  no Barista
 Better as a Barista
Andy, at Carbon Trace, made a very good post about gasoline prices going up. There seemed to be a consensus in the comments that high oil prices are good for bike commuting. I think that ignores the reality that automobile commuting is an incredibly efficient use of time for commutes of moderate to long distance. What’s more, many if not most, people are comfortable in their warmed/cooled vehicles which helps foster an overwhelming, if grossly overblown, fear of getting hit by an automobile. Simply put, bicycle transportation use is not driven strongly by oil prices. It is driven by personal circumstances and desires, or where it has become fashionable, which is why bicycle share tends to be high in university towns and in dense locations.

My Coffee is NOT as Good as This
Before I started this blog, during the time I rode my bike to Haltom City (a distance of 14 miles from my home), gas prices went up a lot, hitting $4/gallon at one point. When prices were high, I often got asked whether I bike commuted to save money. The answer was, “No, I’d actually do better to work as a Starbucks barista to pay for the gas and continue to drive to work.” Amazingly, my engineers briefly speculated about which Starbucks I was moonlighting at. That economics of time versus expense is true whether gasoline is $2 per gallon or $10 per gallon. Still, I saw a lot of extra bike commuters and the TRE train got a lot of new riders, so most people did not actually do the math. Since you are reading this, you won’t NEED to do the math, which follows in a simplified form.


Paying for Expensive Gas – Warning – Simple Math Content!
My v2 commute was about 20 miles each way. I already owned a fully depreciated motor vehicle, so my main variable cost was the cost of fuel. Conveniently, my Jaguar gets about 20 miles to the gallon on the commute, so it uses 2 gallons of fuel each day I commute on a 40 mile round trip. If fuel costs $10 per gallon, that’s $20 per commute. $20 to drive to work one time is certainly not chump change, but spending that $20 saves me 2 hours per day compared to bike commuting. If I didn’t enjoy the bike commute, I could work the two hours as a Walmart Greeter, or as a barista making $10/hour and break even in both time and dollars. As gasoline dips to less than $10 per gallon, I’d have to work less time to pay for the gas needed to save the commute time. At $4/gallon, I’d be WAY ahead to simply greet people a little longer or pour a few extra lattes. At my current salary as an engineer, you might safely guess I’d have to work considerably less. In the final analysis, this is supported by the European example, where auto commute modes are dominant (far over 50%) despite much shorter commute distances, dramatically higher fuel prices, and strong governmental policies intended to discourage automobile use. Even in Amsterdam and Copenhagen, you see cars all over the place. THAT says a lot, considering the size of those places compared to any large US city, combined with government policies the US is not inclined to consider in the near term.

Managing Commute Distance
Well, you might ask, why not simply move closer to work as Andy Cline has done? I own my home already. Lots of people own their homes. Assuming our Walmart Greeter/barista is a homeowner a household member residing at an owned home, there are large costs associated with moving. Keeping things simple, between real estate commissions and taxes and loan assumption costs, it costs at least 10% of the house value to move from an owned house. For a $200,000 house, we’re talking a moving cost of $20,000. $20,000 buys a lot of gas, even at $10 per gallon. When my company relocated me to Texas, the total move cost came to around $60k – and I lost money in the deal. To be specific, 2,000 gallons of $10 per gallon gas – at 20 miles per gallon – represents 40,000 miles of driving. If the new house was walking distance from work, it’d take five years to break even. Five years is a long time to count on holding a Walmart job. If North Texas was a high price area, or there’s a spouse that doesn’t also work near the new location, or something that gets better mileage than a Jaguar, that break even point would get longer. Kids in school add further to the barrier to relocation.

Where Would I Live to be Near All Four Work Destinations I've Had During the Last Seven Years?
If, on the other hand, I were looking to newly relocate into an area, fuel prices WOULD play a factor. I’d pay a reasonable housing price premium to avoid the extra drive time and cost, and most other people would as well. The trick is that as transport prices get higher, that premium gets larger as well. Over a longer time period, higher transportation costs would drive density up near employment locations, but this is a very long-term effect since cheap transport has been driving density down for generations. In my case, I moved to North Texas six years ago. I’m now working at my FOURTH different work location, none of which has been within ten miles of each previous work location. I see no reason to expect that pace to slacken. Keep in mind that I have worked for only two different employers in the last 30 years, which is more stability than most people achieve in the US. It took us more than fifty years to get into this mess of low density cities; it’ll take us another fifty or more to get back out of it. Andy and I will be dead of old age long before the suburbs disappear that have been enabled by cheap oil. Presuming that dire "peak oil" scenarios are true, we'll simply have to find a way to live in the bed we've made.

Yeah But
Some of you are spluttering at this point; noting transit usage and bike commuting both soared when prices rose in 2008. What’s more, motor vehicle usage dropped. These are different phenomenon, but neither suggests that a large increase in bike commuting will be sustained from fuel price increases. Instead, there will be short-term “deal with the panic” increases, such as occurred in 2008. Once the “panic” becomes “normal,” people will return TO “normal.”

Bike Commuting Soars
As I said, I enjoy riding my bike. The economics of bike commuting are different for me than for someone doing it just to save money (but that is another post). I’m not alone. Many people that enjoy riding a bike do not bike commute. When prices of fuel rise, some people (that enjoy bike riding) decide to try bike commuting and some of them might continue after the price rise has been absorbed. Other people (that may NOT care about bike riding) get the notion that riding a bike to work (or take a train to work) might be a good idea to save money and they buy a bike (or ride the train). Mostly, this second class of new bike commuters don’t keep at it. They don’t really like bike riding to start with, or maybe they believe the danger propaganda, and they might well have purchased a poor quality bike from a big box store (but not MY Walmart).

Regardless of the motivation, in the long term, the economics and convenience of driving versus riding a bike (or taking transit) sink in, and people go back to their car, and I suspect this would be true even with $10 per gallon gas (since the US is comparitively rich, such a price would certainly hit hard at most of the rest of the world more than us, limiting any really giant rise in price). A very few new alternative commuters would discover non-car-commute factors that overwhelm the raw dollars cost per hour saved factor. A bike commuter may come to realize that he/she gets to ride his/her bike for less total time investment than if he/she had to drive to work and THEN ride the bike. A train commuter may find friends to chat with on the train, or discover all that time can be used to indulge a desire to read.

Driving Drops
Driving, in contrast to bike commuting, drops when gas prices go up because people start to think and consider their trips much more. Instead of making separate trip to the grocery store, a deli, a restaurant, and to work, trips will get combined. Some of the marginal trips will be simply omitted. The phenomenon is similar to that which sometimes occurs when a prospective dieter keeps a food consumption log. Simply paying attention to the food intake reduces donut consumption. Simply paying attention to all the car trips reduces them. Unfortunately, after a while, the new situation seems normal and usage returns as focus is lost. It is no accident that Starbucks now emphasizes drive through restaurants much more than they did even five years ago.

Involuntary Bike Commuters
There are, and will be, many bike commuters due simply to the costs of driving. You see their bikes locked at the backs of restaurants. These people are not driven by the price of fuel so much as the inability to raise the amount of money or credit to purchase and operate a car, or even a good bicycle. For them, the economics are the economics of survival. They don’t drive to work now and they won’t drive to work if gas hits $10 per gallon, or if it drops a buck.

Many, if not Most, Bike Commuters Simply Can't Afford the Motor Vehicle They'd Rather Have
So, is it Hopeless?
Of course not! Bike commuting, except for the desperately poor, is not driven by the cost of driving. That is reality. It will remain so for many years to come. However, that does not mean that bike riding can’t play a much more important role in our society and even reduce the costs our society pays to keep all those cars in streets and parking lots. Namely, we can foster the fun and safe aspect of riding to nearby stores and restaurants – “the one mile solution.” How can this be accomplished? I don’t know. I’m not an advocate, but I know things would be cheaper if all the stores I shop at didn’t have to use up so much land and effort to maintain giant parking lots. The good news is they wouldn’t have to buy any extra land at all to put in a bike rack at a prime spot near the front door, nor would they alienate cycling customers with a sign saying “bring your bike inside while you shop at Walgreens” or some such.

OR, we can encourage people to show their patriotism by the one mile solution. A bit different narrative and that miller guy could be riding a mile for his beer. He ain't doing it because gas is expensive. It's just what he can do to help his country and himself. It's a politically neutral, and positive approach. On the other hand, it MIGHT have the negative side effect of encouraging people to honk at innocent cyclists so maybe we ought to simply forget the whole thing.


Ride a Mile for a Miller

12 comments:

limom said...

It would be interesting to see how TOMS would play out in a town like mine.
Most stores are within a mile or two of well, every where and there are bike lanes abound.
I'm still waiting for them ebike kiosks to show up to see if there is any impact.
I think the bottom line is that if it's easier to get there by car, well, they'll go there by car.
Especially if it's a middle income area such as here.

Steve A said...

EASY and "for the USA" are positive factors. Few will ride a bike just because they're too cheap to pay for expensive gas and don't value their own lives.

PaddyAnne said...

Good article - I think you are right on the nose.

Its too early, and in a lot of cases not practical, to expect everyone to stop owning or using a car. But if everyone thought more about how many trips they need to make and made the effort to try to be more efficient in their use of a car,a lot of gains can be made.

John Romeo Alpha said...

Steve, I direct your attention to the World Health Organization document "Methodological guidance on the economic appraisal of health effects related to walking and cycling" (Cavill et al, 2007), which is intended to help to determine the following: "If x people cycle y distance on most days, what is the value of the health benefits that occur as a result of the reduction in mortality due to their increased physical activity?" Related, the "Health Economic Assessment Tool for Cycling(HEAT for cycling)" lets you input data into an Excel spreadsheet to perform your own calculations. The working average calculated by the WHO (converted for our units) is a value of $1.68 / mile in health benefits for cycling. I did not plug and chug the HEAT tool yet, so using the WHO figure, along with my own 5000 cycling miles this year, I come up with $8400 in health benefit value. Not enough to retire, but much more than the $700 or so I saved in gas, which is just to illustrate in a long-winded way that you are probably benefiting much more in health dollars than gas dollars by riding your bike.

Pondero said...

I agree with you Steve. Gas prices don't seem to be a major factor. It's about circumstances, and desires. I have a desire, but my circumstances are pathetic. I only commute when amazing coincidences happen.

Khal said...

Excellent analysis. Another spin on this is one of Cliff Slater's essays: Why we commute by car.

http://shell.lava.net/cslater/Commute4.htm

Cliff's main page.
http://shell.lava.net/cslater/xxxindex.html

Trevor Woodford said...

Hi Steve
A first class posting. Right on the button..!

Moopheus said...

That's the correct theoretical argument, though as practical matter for most people, life doesn't really work that way. Are you salaried or paid hourly? If you decided to work that extra hour of the day instead of riding, would you get paid for it? For a lot of people, the answer is no, at least not directly. They may have no control over their hours, and may only get comp time for overtime. If that. Picking up that one extra hour of work per day is a nontrivial exercise for most. Workers who do get paid hourly and have variable hours (like tradesmen) are probably already working, or trying to work, as many paid hours as they can. For instance, I could get myself some extra freelance work, but each hour of paid work requires some nonpaid effort to get it. (Also, my own commute is short, in a dense area--meaning it takes no longer to ride than to drive).

This is not to say that your argument is completely invalid--it is surely true for some--just to point out that arguments from economic theory usually gloss over the complexities of actual life.

RANTWICK said...

You remain one of the most rational and logical bloggers I read. I appreciate it and agree that most avid bike commuters are driven to do so by a wide variety of desires, many of them laudable, some purely selfish. I'm pretty squarely in the selfish camp. I get my kicks from riding my bike and all the benefits to myself and others are just gravy.

Tracy W. said...

Nice post Steve. It's good to see a level-headed, non-emotional spin on the subject. Like you, I commute by bike purely for endorphin rush I get from exercise. For me, it's not a money-making endeavor. Sure, I greatly reduce my gas expenditure, but in the end, I could drive a long way on what I spend each year on cycling. Luckily, it's a discretionary expense for me, so it doesn't really matter. What matters is that cycling is my recreation, even if does involve getting back and forth to work.

cycler said...

Nicely put, Steve,

A couple of thoughts
Even the biker who tries it as a panic response, is a net gain for cycling because the experience of riding a bike in a car's world builds empathy and more considerate driver behavior.

Secondly is that the fixed costs of a car and the costs of insuring a car are a much more significant cost that the marginal operating costs. VMT insurance and the extended lifespan of a car driven fewer miles would both be incentives to drive less. There's no way I spend the $1,200 a year I spent on insurance on bike stuff, even with the occasional zip car or cab ride added in.

This is only a slight issue in North Texas where land, and therefore parking, is (relatively) cheap, but the cost and hassle of parking is a significant incentive to bike around here. Parking near my office is something like $30 a day. There is some on-street metered parking for $16 a day, but it's so much of a hassle, that it's not really an everyday solution. Someone in a car can sometimes (not always) beat me over a specified distance in the city, but if you add in the time to find parking I almost always win a door to door race.

Finally, costs which are externalized and which don't enter into an individual cost benefit analysis (unless you try to do the math on dividing up all your taxes) is the huge institutional cost of creating and maintaining the road infrastructure, and storing cars on that infrastructure, which is largely paid out of "general fund" income/ property/ sales taxes.

Steve A said...

JRA - re health benefits - it is sometimes claimed that cycling helping people live longer contributes much more to global warming than if they were left to drive Hummers & watch TV.

Pondero - luckily amazing coincidences occur more often than is commonly believed

Khal - that and other Slater essays are EXCELLENT and I'd not seen them before

Rantwick - Please tell the public I did not PAY you to write that!

Tracy - I commute because I'm a goofball. I'm conflicted as to what fraction of commute cycling is recreational and what fraction is purely practical. Remaining fit is not purely "fun" for the human animal that wishes to improve his/her quality of life, and riding a bike can be a time effective part of a fitness program. I'm planning a future post on this topic.

Cycler - You'll note that in my example, I was careful to point out I already HAD the car. Of course it is much cheaper to operate a bike if it avoids a car entirely. Also, last I checked, Tarrant County is not willing to rebate me any property taxes for bicycle commuting to work, nor do any businesses I know of give out rebates for those that don't use up a parking space. You might also enjoy the Slater essays, one of which notes that office space is subsidizing parking space.

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