We spend a lot of time on this blog advocating for improved public transport, with most posts focusing on what progress there is (particularly in Auckland) towards having a much better public transport system. But occasionally it’s probably worth dwelling on the question of “why?” This is obviously a pretty fundamental question, and one with many many answers, but perhaps because it feels so obvious to us bloggers that better public transport is a good idea, we can sometimes forget the need to go back to answering that fundamental question.
In this post I’m going to focus on one element of better public transport – that being its role in reducing household expenditure on transport. A useful starting point for this discussion is a post I came across recently on the “New Urbanism Blog” – which notes that transport is the second highest (after housing) expenditure item for your average household in the USA:
It’s one of the numbers that surprises people the most when put in context – that the average American household spends 18% of its after-tax budget on transportation. That’s second only to housing. Food comes in at 12%, and health care at 6%. Just consider that for a minute – we spend 3 times more on transportation than health care.
With all the discussion given over to health care at the political and national level, would you believe it is such a relatively small part of the average budget? How much airtime do we give to the vast amount more we spend on getting around? Will we ever see a Presidential debate focused on transportation?
The number are obviously from the USA rather than New Zealand, but we might expect relatively similar results in our cities. Here’s a more detailed breakdown of all costs (from here), and you can see what a large proportion transport is: 
What’s noteworthy is that the largest bit of transport expenditure is actually on vehicle purchase. Therefore, if we can develop a transport system which offers households the choice of reducing the number of vehicles they own, then we’re going to probably make a pretty big gain – as long as the transport alternative is cheaper for them and also for society as a whole (for example, to ensure the gain isn’t clawed back through the need for higher taxes). The article continues:
Why do we pay so much? Very simply – because we are dependent on our cars to get us around. That’s why planners and urban designers like me use the phrase “auto-dependent” when referring to much of our cities and suburbs. In far too many places, it’s difficult at best to run the daily errands of life unless you are driving.
Digging deeper into the numbers, the AAA’s latest estimates (hardly a car-hating group) have the cost of owning a mid-size car at $9,519 per year, driving an average of 15,000 miles. Drive a bigger car, or more miles, and it’s higher than that. That number factors in all the necessary costs – average car payment, insurance, taxes, gas, maintenance, etc.
By contrast, the cost of walking is a pair of shoes. The cost of biking is a few hundred bucks a year for most riders. The cost of taking public transit is several hundred dollars (depending on your city), but still a fraction of car ownership.
Picking up on that specific issue of car ownership, the article highlights what I think is perhaps one of the most overlooked matters when it comes to the issue of reducing car dependency through providing better public transport – the actual cost of simply owning a car:
But what if you could reduce your car use, and walk/bike/take transit more? If you own one car, you likely can’t eliminate it, but you could certainly save 4 to 5 thousand dollars per year. What would you do with an extra $4,000 in your pocket?
If you are a multiple car household, what would happen if you could eliminate a car? Now you’re potentially talking savings of 10 thousand per year. Want that family vacation, or extra money for savings? There’s your ticket.
What would happen to our ability to pay for other items in our budgets if we spent even half of what we currently did on transportation (which incidentally would still be more than on health care).
I probably need to dig up Auckland data a bit more, but the feeling I get is that car ownership is seen as so essential – even in the poorer parts of the city – that other budget items get squeezed out, potentially such as feeding and clothing the kids. Even in leafier parts of the city, I dread the possibility of not being able to catch public transport on a daily basis to work – predominantly because that would mean the need to buy another car, a pretty massive one-off cost.
So bringing this back to our initial question of why improving PT is important, a key issue is the ability of public transport to provide us with an alternative to buying that extra car – or for some families potentially the ability to avoid owning a car altogether. If an improved public transport system enables a significant number of households to downsize from three cars to two, two cars to one or even down to no cars at all – that’s a huge financial gain for a large number of people. I would suggest a much more valued gain than saving a few minutes here and there on the commute to work. Interestingly, a PT system based around park and ride is totally useless in achieving these benefits because the car is effectively “locked up” for the day in the parking lot or on the street near to the train station or bus stop.
With this goal in mind, it creates some important objectives for what a PT system needs to be like. In particular, it highlights the importance of building confidence in the system as being good enough for someone to feel they can do away with that extra vehicle, without becoming a second-class citizen. It needs to be frequent enough to cater for random trips, in case someone else is using the household’s car at a particular time. It needs to be reliable and regular enough to build trust in using the system day-in, day-out. It needs to be fast, to minimise the “oh I’ve only I’d driven I’d be there already” syndrome and it needs to be affordable enough for the whole equation to actually be a net-benefit.
Imagine if “reduced car dependency” was actually considered in projects’ cost-benefit analysis. It really should be.
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Seems so obvious to me… This is what Ed Glaeser obliquely referred to in his book about how cities (governments) should spend money on people. If each family can save up to 18% than clearly this would be a good public investment. As far as economic policy goes this is a no-brainer along with location efficient housing…
The marvellously understated phrase ‘Maladapted urban planning’ mentioned in the following analysis of oil’s role in the GFC is a nice way to put it too: http://www.theoildrum.com/node/9201#more
Just as an aside, you really see the depreciation cost in the US, as buying new cars is much more common than it is here. (Also, the average amount per person on tobacco is also impressive!)
Equivalent figures for New Zealand are available here: http://stats.govt.nz/~/media/Statistics/Browse%20for%20stats/HouseholdEconomicSurvey/HOTPYeJun10/hesjun10yeartables.xls (table 2)
New Zealand households spend 12.9% of their budget on transportation on average. Unlike the US transportation is the third biggest expense after housing and food.
Ah thanks for that. Now what would be really interesting is to see a geographic breakdown of that by suburb in Auckland.
Yup, this could be very revealing. I’d love to be able to combine it with housing costs, as per the US HTA index:
http://htaindex.cnt.org/
I doubt the survey has enough participants to break it down by suburb, but send a request to Stats NZ if you want…
Excellent post Peter M. Just wanted to point out that reducing transportation costs is only one of several reasons why improving public transport in Auckland should be a priority. Off the top of my head:
-Decreased land costs (roads and parking take a lot of space).
-Improved accessability for those unable to drive (such a the young, old, disabled, and those on holiday in Auckland).
-Reduced amount of transport related accidents.
-Reduced pollution emmissions per capita.
-More walking to and from stations improves the fitness of the population.
-More social interaction on public transport as opposed to single occupant driving.
Oh I totally agree. I was just outlining in a bit of detail why we should look at reducing transport costs, in particular related to car ownership levels, as part of the argument for better public transport.
If you want to do a post on any of the others, feel free to send in a Guest Post.
To make a comparison to somewhere like Switzerland, where a car isn’t necessary, an annual all you can use PT pass for the city of Zurich costs 640CHF so around 0.6% of the average wage in that city. A pass for unlimited travel in the entire country ie bus, train, ferry etc (known as a GA) costs around 3300CHF so 3.3% of the average salary in Zurich. It’s fascinating to realise how much you can save on transport living in a country like Switerland which didn’t blow their budget for the last 60 years on roads alone.
The US offers huge tax incentives to buy new cars, which is part of the reason their figure is so much higher than ours. A lot of people there are replacing cars every three years, meaning they wear the very worst of the value depreciation and that is reflected in the numbers. Also, 15k miles is enormous. The average here is half that, and probably dropping.
Don’t forget that even if there’s an increase in taxes it’s unlikely to be so large as to capture all the savings. When I’ve got a few minutes I’ll do some calculations around how much tax increase would be needed before a person was not better-off for ditching their car and relying on tax-funded improvements to public transport. It’ll be a lot.
We are a one car household in Auckland and I used to think about the people I worked with owning two cars. I used to wonder how much extra it would cost having that extra car. We live in Onehunga, which was a choice we made largely because of improved transport links to the city where we both work.
In a city the size of Auckland we refuse to own two cars because of the cost and the fact that a city of this size coupled with improved public transport there shouldn’t be a need. I lived in Sydney for a few years and worked in the CBD and never owned a car, didn’t need to. I got around by train and bus and if I needed a car to get out of Sydney for the weekend I just hired one and this would have been only once or twice a year. Great post and good to see this topic being brought to attention.
Public transport here still has a long way to go. My partner and I live in Ellerslie, along the primary bus route. Theatrical activities will often have us on separate sides of the city. Currently I’m rehearsing a show in Crown Hill, she’s performing in a show at Howick. Public transport is possible for both of us, but in neither case is it practical. She would spend 35 minutes minimum to take a bus home instead of a 20-minute drive, including walking the streets late at night to get to the necessary bus stop, and I would spend about an hour-and-a-half using public transport to do a journey that, by car, takes me 20 minutes.
Similarly, if I’m doing stuff in Onehunga there is no bus service that’s convenient (as in multiple transfers or a 20-plus minute walk to a bus stop). I can take a train, but half-hourly frequencies are nonsense and I often need to remain after the last train has departed.
We’re not typical, but we are an example of a household of two that is trapped into owning two vehicles by the abysmal quality of public transport in Auckland.
That’s a good example of why PT needs to cater well for non-commuting trips if it is to reduce car dependency.
I’m seriously considering joining cityhop as soon as I move to a suburb that has one. $15 an hour with all expenses covered including insurance, petrol and cleaning.
I’ve had a car for about three months now and use it on average about two hours a week. With cityhop that would be $30 a week, or $1500 a year. I figure that’s about a third to a quarter of what my car costs even with my very low usage. In fact selling my hunk of junk would buy me 100 hours of cityhop car use, let alone all the associated fuel, registration and maintenance costs.
That’s a great scheme Nick and there’s a stop just up the road. Maybe time to get rid of the second car that just about never gets used and we only keep for those odd occasions we need a second car.
There was a series of articles in the Herald last year about various families across income ranges. The poorest family shown was not able to always afford to eat all meals but owned 2 cars. I can’t imagine this was through a desire to have two cars or a love of motoring, but for the practical need. We need better pubic transport to give people like these (and everyone else) a balanced choice in how to get about. Currently it’s the highway or no way for so many trips in this city.
It would be miles easier if people thought of overall costs when comparing modes. I suspect most people consider just the marginal costs- and then not fully ignoring general wear and tear on elements that need infrequent replacing and instead just calculating on the fuel costs. In some respects this is correct if they need to own a car for other reasons, but second cars are often used for a commuting run
Depreciation is the big one, and a cost that few people seem to get their head around (including myself until recently).
Buy a ten grand car, sell it five years later for two grand. That’s cost you eight thousand over five years, or thirty dollars a week.
Or a bit more than $30 if you take into account the opportunity cost (what you might have done with the $10k if not tied up in the car )
This is off the transport topic but $118 for reading?!?! WTF is up with that. We are creating a stupid society.
Not enough or too much? That is probably magazine/newspaper subscriptions. Are libraries free in the US?
I find it rather low. When you think that it is probably split between magazines, newspapers and books. Libraries may be free but I still think for an average household that is a low spend on such an important activity.