[sustran] Re: Comparing Transportation Costs By Mode

[Daryl Oster]

> Original Message From: Todd Alexander Litman [mailto:litman at vtpi.org]
...
> First, Oster reaches the unsurprizing conclusion that if you are to travel
> high mileage and charge a high value of time, automobile travel seems
> cheapest, due to economies of scale (since most automobile costs are
> fixed, average costs decline significantly with increased consumption).

Consumption is a totally different issue.  The need is for TRANSPORTATION -
so modes must be compared on what mode best (most sustainable) fills the
need.  Sustainability is mostly a question of efficiency.  AND efficiency
has several dimensions.  My chart only points out the BIG reasons that cars
are greatly valued as transportation tools.  Car market dominance is NOT
some mass conspiracy to manipulate people counter to their basic needs.  

Recognizing the REASONS for car's market dominance it the key to
understanding how to transcend that dominance with more appropriate means. 


> But this assumes that everybody can and should drive high mileage and is
> based on an excessive value of travel time (most travel time cost studies
> suggest that the value should be one-third to one-half prevailing wages
> during peak periods and probably significantly less during off-peak, yet
> Oster uses US$15.00 for everybody, which is probably an order of magnitude
> too high for developing country conditions).

I do NOT make the claim that people should drive high mileages - Yet the
facts show that as urbanization trends continue, that increased demands are
placed on transportation.  

You fail to understand that there are TWO assumptions embedded in the chart!

Assumption #1 is if time value is considered;
Assumption #2 is if time value is NOT considered;

Additionally, the chart is set up so the value of time can be changed to
reflect the value of time

NOTE: the breakeven miles occurs at an increasingly higher number as time
value is reduced, but due to the reduced environmental impacts (food
acquisition lodging needs or travel, etc) there is still a breakeven point
if the time value is ZERO -- and this IS on the chart.

The non-time value impacts are mostly hidden IF all trips are less than a
few hours duration BUT THEY ARE STILL THERE!!  Only by making the mode
comparison at the SAME CONDITION OF STEADY STATE CONTINIUUS TRAVEL FUNCTION
can the true market benefits and costs be unmasked.  

The spreadsheet - using the $15 is appropriate, as it shows the cost of
benefit, and investment recovery time for the entire range - from zero time
value - up to the value typically placed on time in highly developed
countries.  

BTW, most (not all) people place a HIGHER value on their non-work time -
hence the necessity of paying overtime differential to induce workers to
work longer hours.  

> Transportation professionals are realizing that the best transportation
> system maximizes "accessibility" rather than "mobility", in other words,
> it apply strategies such as more accessible land use patterns and improved
> mobility substitutes such as telework and delivery services to reduce the
> need to travel (particularly by motor vehicle) 

Current land use patterns reflect the total system VALUE for greatest
present condition sustainability.  Telework at once eases some demands and
creates others.  


> If we evaluate transportation in terms
> of accessibility rather than mobility, then modes such as walking and
> public transit become more valuable because they help support more
> compact, mixed land use development and have low costs when used for short
> trips. 

This reduction in transportation cost for the individual is offset by
increased cargo transportation; construction costs (the cost of building
vertically increases geometrically); social costs; and environmental costs. 

It is well known that tax rates in dense cities cannot be raised enough to
cover the increased costs of dense settlements, AND that the burden must be
transferred to those outside the city, or urban decay will occur.  Planning
for the most sustainable society involves proper choice of transportation
mode - my point is that the mode offering the greatest transportation VALUE
for the most people is the mode that should be encouraged in planning, and
then planning can make the highest gains by maximizing total system
sustainability.  

One of the reasons the car is so valued is due to the HUGE improvement in
accessibility the car offers MOST people.  The usefulness (accessibility) of
any network with optimally placed nodes is approximately proportional to the
number of nodes squared.  A system with 20 nodes compared to 10 nodes is 4
times more accessible (useful).  The cost of a train or airplane node is
HUGE compared to the incremental cost of a node for car access.  

ETT approaches the automobile in terms of node accessibility, AND since ETT
is automated, has the advantages of requiring no special skills or physical
demands of operating a car.  

If you want to plan in terms of accessibility, then ALL benefits AND costs
of accessibility must be compared according to mode.  ALSO the cost of
demolition and construction (rebuilding) of existing buildings according to
a new master plan must be evaluated.  


> In other words, Oster's analysis framework represents the sort of
> self-fulfilling prophesy that results in automobile dependency: if you
> assume that automobile travel is cheapest and best, you can build a
> transportation/land use system which favors that mode so it actually
> becomes cheapest, at least from the users perspective.

We must remember history.  In the US, the first cities WERE built according
to the existing highest value modes (at the time) of water and then train
transport.  The cost of accessing these few nodes was very high, and
dramatically increased land value in proximity to the nodes.  The extreme
value of the nodes made possible ultra expensive high rise construction to
increase node access.  AFTER the car was invented, and it's much greater
transportation value (including the vastly better accessibility through
lower node cost), savings in construction was ALSO possible due to much
greater land availability in close proximity to an transportation node. So
the car offered DOUBLE savings - the transportation innovation ALSO
precipitated lower construction and land costs for housing and commerce.  

Going back to OLD city planning, will be like paddling against BOTH wind and
current.  MUCH faster progress can be made going WITH wind and current at
the same time.


> Second, Oster's cost framework ignores some of the most significant costs
> of automobile travel, including parking costs, congestion costs, and crash
> costs (including these would nearly double what he calculates as vehicle
> costs). 

Parking cost is usually embodied in the food cost and lodging cost.  It is
about 10% of the cost in areas where parking cost is so high that it is
applied separately.  I will subtracting 10% from the cost for walking; -
bikes would be somewhere in-between.  

I am happy to include "crash cost", the cost of crashes has been determined
very accurately by the insurance industry.  The insurance industry must
cover the costs of crashes, AND face unjustifiably huge court and settlement
costs, AND still make a profit; SO the cost on insurance is significantly
greater than true "crash cost".  

I am happy to use the prevalent insurance cost if and only if it is fairly
and equally applied to each mode on the same terms.  To fairly and
impartially apply insurance costs, one must consider full coverage of:
Liability and comprehensive insurance of BOTH Property and Injury losses.
The benefits and costs of insurance MUST be compared and applied on a "at
fault basis" AND, they must be reduced to a per passenger mile basis.

My limited research at doing this (getting quoted only for myself for
walking (medical injury insurance only for walking and biking- no libility))
proved to me that the per mile cost of insuring transportation risk of
walking or biking is much greater than for car use.  I have not yet received
average or typical values for the whole of the insurance industry for the
three modes in question, so I have not yet applied them.  


> It also fails to account for the much higher costs of driving
> under urban-peak conditions, which suggests that even if driving is
> cheapest on average, under urban-peak conditions other modes may be more
> cost effective. Food costs, which he incorporates, is only relevant for
> people who are eating too little, if people are eating too much and
> benefit from increased physical exercise, as is the case in most developed
> countries and even many lower-income countries, than time and calories
> spent walking and cycling represent a benefit rather than cost. 


> I have no idea why Oster focuses on kidney disease as the risk associated 
> with sedentary living, 

This focus was not my focus, I was only showing a methodology of reducing a
benefit to a per mile figure.   - If you read the whole thread you may
understand better.


> most studies (including a couple I've been involved with, see
> http://www.smartgrowth.bc.ca/downloads/SGBC_Health%20Report%20Final.pdf
> and http://vtpi.org/health.pdf ) indicate that cardiovascular diseases is
> the main risk. 

I think it would be interesting to include ALL benefits (and costs) of
transportation related exercise (or rest from exercise).  There have been
several world class athletes who exercise an extreme amount who die of heart
attack induced from extreme exercise with insufficient rest and recuperation
time.  There is an optimum balance in exercise, there are measurable health
risks associated with BOTH extremes - and I am not very likely to take the
time to quantify them all, perhaps others will.  


> The health benefits of increased walking and cycling are
> much larger than Oster's analysis implies, probably similar in magnitude
> to crash reduction benefits, although we generally do not try to monetize
> that impact because the relationships are complex. Perhaps a simpler way
> to quantify it is to say that the first 30 minutes a day of active
> transportation (walking and cycling) incurs no time cost.

IF there is a quantifiable reduction in health cost associated with
commuting by foot or bike, there may be some insurance companies exploiting
this niche by offering health insurance discounts.  Insurance actuaries are
equipped to be able to calculate this, I am not, and I would be very
suppressed if you could provide investment grade data to support you
allegation.   

> Third, I think that Oster misrepresents the basic question. It is useless
> to ask, which mode of travel is cheapest and best to accommodate, since
> costs vary significantly depending on the situation. It is far better to
> ask, which mode is most cost effective and most appropriate for a
> particular situation.
...

The point I make is that EVERYONE IS DOING THIS ALL THE TIME - that is the
efficient market - and it decides.  The facts are clear - cars get the
choice more often, and it is most likely due to the value reflected in the
metrics shown on the chart. 

> Walking and cycling are most cost effective for
> shorter trips, particularly in urban areas where space is at a premium or
> by people who are either low income or need to increase their physical
> activity; public transit is most cost effective for travel on major urban
> corridors and between cities; and automobile travel is most cost effective
> for some types of trips such as off-peak and rural travel, and when
> carrying heavy loads, 

I agree, and the attached graph shows where the market lines are drawn -- by
market force of achievement of best value equilibrium.  


> although my research indicates that a significant
> portion of automobile travel that occurs in most developed countries
> results from market distortions that underprice driving, and in a more
> efficient transportation market the total amount of driving that occurs in
> developed countries would decline by a third or more (see
> http://www.vtpi.org/opprice.pdf ).
> 
> 
> Best wishes,
> -Todd Litman


Many people DO consider walking - virtually all car users also walk when
THEY deem it appropriate, according to their individual value of time,
money, etc.  The attached graph by: 

Rodrigue Jean-Paul, Ph.D. 2004 Geo Transportation Website of Hofstra
University, Hempstead NY.  http://people.hofstra.edu/geotrans

Shows the market gap of cars vs non-motorized (bike and walk) AND also the
market gap of cars vs jets.  

Understanding and working WITH (instead of against) social market trends and
demands is key to achieving sustainable transport, and ETT is the most
credible attempt to accomplish this. 


Daryl Oster
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