April 8, 2008
Vehicle Costs Up
As reported in the Business Journal, AAA's estimate of driving costs is up to 54.1 cents/mile, or $8,121 per year.
April 8, 2008 2:13 PM
Given the fact that gas taxes only pay about 1/4 of the costs of maintaining Oregon's roadways, this number should be a bit higher.
But perhaps JK can tell us why his methodology is better than AAA's?
April 8, 2008 3:19 PM
jim karlock Says:
Unit: But perhaps JK can tell us why his methodology is better than AAA's?
JK: Be glad to.
But first you must understand the one method is not necessarily better than another. It often depends on the purpose.
I looked at this a while back ( 2005 data) and found the purpose of the AAA cost is to reflect the lifestyle of it’s upscale members. The AAA bases its estimates on buy a new car, keep it 5 years, then buy a new one. This makes the average AAA car age 2.5 years. See DebunkingPortland.com/Transit/AAA_method.htm
But the average USA car is 9 years old. This results in a big difference in depreciation cost, which is the biggest cost in the AAA method. Depreciation was $0.371 per mile, Operating cost was only $0.15 per mile. That means once you own a car, it only costs $0.15 per mile to use it. At 1.57 people per vehicle this is only $0.10 per passenger-mile, or $0.12 at Portland’s 1.3 people. (add 3-4 cents for gas going up $1 since 2005)
Depreciation accounts for about a $2400 difference between the AAA member’s average and the national average. At 15,000 miles per year (AAA mid number), this is $0.16 per mile.
Take that off of the new AAA of $0.541 and you get $0.381 as the average USA cost.
That is per vehicle mile and to compare with transit we must use passenger-miles. There are 1.57 passengers in the average car, so the cost per passenger-mile is $0.243.
Portlanders appear to drive alone more, and some reports put Portland’s average car at 1.3 people per car, so the cost per passenger-mile becomes $0.293.
(Since I started with the 2007 AAA number, this result should be pretty close to the actual 2007)
This compares with 2005 transit costs (which surely have gone up) of
$0.835 for average bus (does not pay for roads)
$0.34 for BEST bus (does not pay for roads)
$0.434 for rail on what used to be the best bus routes. (no construction cost)
$1.11 for rail when you include construction.
Compare those numbers with a car’s operating cost of $0.12 per passenger-mile. ($0.19 per mile with gas at today’s $3.40/gal.- but those transit numbers are 2005). I think that the transit numbers do not include vehicle purchase, so we are comparing operating cost to operating cost. Including ownership an average car (2005 data) is $0.30, or $0.23 per passenger-mile. Either way, you can easily see what a bad financial deal transit really is. That is why we should take a close look at lower cost alternatives.
Note that cars pay for most of the road construction and maintenance in addition to transit through user fees and 80% of transit is paid by others.
One final note At the USA average of 23 mpg, a ONE dollar increase in the cost of gas only increases the cost of driving by $0.043 per mile. Compare this with the AAA cost of $0.541. An increase of only 8%. That is why driving doesn’t vary a huge amount with the cost of gas. Of course at the average USA driving cost it is more like %14, still a minor part of the total cost.
Comment: If we all switched to transit, TriMet would go broke because they loose money on every passenger!
Unit: Given the fact that gas taxes only pay about 1/4 of the costs of maintaining Oregon's roadways, this number should be a bit higher.
JK: NOT true. Overall, user fees pay for almost all roads in Oregon and a chunk of the Federal gas tax goes to transit. It is transit that pays little to nothing for roads. For a quality journal article on this see: DebunkingPortland.com/Roads/Docs/Delucchi_Chart.htm
April 8, 2008 10:25 PM
I must say,
Normally I am repulsed by JK's comments,
but as he's openly shared his methodology without resorting to rhetoric, i have a newfound respect.