Monday, May 10, 2010

Calculating the full cost of travel


According to New York City's Center for Economic Opportunity taking a taxi to work every day is the most expensive way to commute. The Center estimates that it costs about $4,700 per year for taxi users. Commuting via railroad is second at $2,100 and driving alone is third at $1,900. In an article from the NY Times, Lisa Daglin from the NY Metropolitan Transportation Council attempts to explain that price matters when choosing commuting modes:
“Deciding how to get to work shouldn’t be a job in itself,” said Lisa Daglin, a spokeswoman for the New York Metropolitan Transportation Council. “With our smorgasbord of transportation options, New Yorkers can choose the mode that fits their taste, and their wallet.”


She's right, but this study is deeply flawed. The cost of driving does not include the cost of parking, which can be many hundreds of dollars per month in Manhattan. If the cost of parking is included driving alone is by far the most expensive mode. The cost estimates for driving alone are based on the standard mileage charges allowed under IRS guidelines, which likely underestimate the expensive insurance of the NY area as well as the cost of parking at home. Delay and environmental costs are also unreported.

But a bigger problem with this study and many like it is for most people it seems entirely reasonable that you wouldn't include the cost of parking in cost of driving calculations. You might as well ignore the cost of gas or engines. It is unthinkable that operating costs would be left out of a transit agency's annual budget because you obviously have to operate the service. Quite simply, any attempt to value the full cost of driving that does not include the cost of parking should be treated as bogus. If this study is to be believed many of the taxi users and train riders are throwing away money by not driving alone, and that's a bunch of baloney.
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