Does driving cost less than transit?

Median journey to work time in Melbourne, by mode, ordered by approx distance of home municipality from CBD (VISTA)

With petrol prices spiking upwards, it’s a good time to examine the relative cost of driving versus public transport. You can save a lot of cash if you’re prepared to live without a car, but you’ll pay in other ways.

According to the RACV’s 2010 Driving Your Dollar survey, it costs $10,668 p.a. on average to run a medium sized car like a Toyota Camry Altise. The cost could be as low as $6,759 p.a. for something small such as a Toyota Yaris or as much as $19,234 p.a. for a behemoth like a Toyota Landcruiser GXL. On the other hand, a zones 1and 2 Yearly Metcard costs $1,859 p.a. for unlimited travel. However ticket outlays need to be adjusted for household size. In my case, my wife would also require a yearly pass and our two children would need travel concession passes. That brings the total cost up to $4,562 p.a., but that’s still considerably less than the Camry’s $10,668 p.a.

Of course many children already have a school travel concession pass. And adults who know they have a limited travel range could probably get by with either a zone 1 ($1,202) or zone 2 ($799) ticket and buy extra daily tickets on those (presumably infrequent) occasions they travel cross-zone. Travellers who use public transport exclusively will in all likelihood spend more on taxis and occasional light truck rental, as well as sacrifice some spontaneity in trip planning, but in cash terms they should still come out well ahead of car owners.

Whatever the overall saving is, it isn’t going to be realised by households who keep their car and simply use it less. The bulk of outlays associated with a car are standing costs like depreciation, insurance and registration. In order to be significantly better off in cash terms, a household either has to lose a second car or decide they can get along without any car at all.

But this simple accounting doesn’t provide a fair comparison. There’s one big difference that has to be taken into account – travel by car is much faster on average than by public transport. The latter is most attractive for work travel, but even then the median journey time in Melbourne is almost double that by car (see accompanying chart). Those longer trip times in part reflect commuters who catch trains from distant places to the city centre. But the main reason is that passengers have to expend time on tasks like walking to the stop, waiting for the service and in some cases transferring between services.  

This highlights that public transport is by definition a different beast – it carries multiple passengers to multiple destinations – so it can’t offer the same level of on-demand convenience as a car. Without a car, households reliant on public transport would either have to devote more time to travelling – when they could be doing something more productive – or forego making as many trips. As some of those foregone trips would be valuable, households are worse off. The key reason Melburnians spend so much of their income on cars is that they put a very high value on the time it saves.

A car-free household would do better by moving close to the city centre where it would enjoy a better standard of public transport and be able to walk to more destinations. Moreover, the members would feel the loss of the car less keenly – the higher congestion and higher parking costs near the city centre make a car less attractive anyway. However the savings from ditching the car wouldn’t come free. They would be offset by higher housing costs, less dwelling and garden space and probably more noise. In any event, this isn’t a realistic option for more than 90% of Melbourne’s population – the inner city is just too expensive.

The car-free option will become more attractive for suburbanites over time if governments get serious about investing in public transport and constraining car use, but that will take money and time. A suburbanite reading this will very likely be in an entirely different demographic category by the time suburban public transport in Melbourne is improved to the level where it provides a close substitute for a car!

But perhaps the biggest obstacle to living without a car is that households don’t perceive costs in the way I’ve set them out. Having incurred annual standing charges, they’re inclined to see only the out-of-pocket costs when (unconsciously) calculating the real cost of a trip. Fuel, tyres and maintenance on a Yaris amount to one third of total annual running costs, or $2,250 p.a. for the average 15,000 km p.a. That way of looking at it greatly improves the car’s “offer” compared to public transport.

I lived for around five years in Sydney without a car and likewise in Melbourne for two years. That worked well, but I was young, single and lived close enough to the CBD to walk to work. I relied much more on walking and taxis than I did on public transport. Once children came along however, the value of a car in convenience and time saved far exceeded the additional cost, even in the inner city.

There’s another issue I haven’t addressed about who actually pays when travellers shift from cars to public transport, but that’s a complex topic I’ll have to leave for another time (I’ve looked at some aspects here).


16 Comments on “Does driving cost less than transit?”

  1. hrgh says:

    I have been a car-share member for about 2 1/2 years now, not owning a car for about 5 years.

    Admittedly I live in inner Sydney, where both car share services, public transport and taxis abound. But I have found this mix to be affordable, convenient and easy (e.g. parking is not always available if you don’t have a car space). It allows for cheaper rent too, if you don’t pay for a car-space.

    Car sharing changes the costs whilst also allowing more convenience when you need it.

    • Steve says:

      I would ditch our old petrol-guzzling Magna in a flash if car-sharing were introduced in our area (Ringwood East), but it seems that the car-share companies do not want to touch middle/outer areas. Yes, the outer suburbs would represent a different business model for these firms, but there is still a huge potential when one considers the proportion of households with 2, 3 (4+…) vehicles.

  2. Russ says:

    Alan, good post. P/T costs (both monetary and time-wise) are also very biased towards long and frequent trips. My partner and I generally walk anything less than a couple of kilometres unless we need to carry bulk items. But anything in the 2-10km range costs less than a dollar in fuel, compared to $5 on public transport, and takes 10-20 minutes instead of 30-40 minutes to travel. We saved a lot of money not having a car when we didn’t need one, but now that circumstances mean that we do need one, and have one, the economics favour using it for almost every trip we do that we can’t walk or ride.

  3. Chris says:

    Time driving is unproductive, in a traffic jam even less. At least on PT you can study, work or play.
    If you did that while driving, you would probably hit a pedestrian or cyclist and your insurance would go up.
    Melbourne PT prices are very high by international standards distorted by politics and myki.

    Massive tax concessions mean many drivers are not paying directly for their cars or petrol. Who pays for them Alan? We do, as part of our governments 12 billion annual subsidy to fossil fuel consumption.
    Why will it take generations to get a decent bus service to four million people in the suburbs? Because motorists can’t imagine a journey without their private car. Be part of the change Alan, and help us get some better PT out there in the suburbs before its too late.

    • Alan Davies says:

      Chris, I’m a staunch advocate of better bus services in the suburbs. That’s why I object to money being diverted prematurely to Taj Mahals like the proposed airport rail line.

  4. brisurban says:

    Hasn’t Melbourne introduced the very well patronised high frequency smartbus services into the suburbs?

    Melbourne trains probably could run more frequently, from 20 minutes off peak to 15 or 10 minutes.

    • Alan Davies says:

      Yes, the orbital Smartbus service is a big step toward providing a “network effect”. Frequencies are good (15 minutes). But the routes are a long way apart. Still a ways to go before it’ll provide a substitute for a car. BTW patronage has apparently grown strongly but, I suspect, from a small base. I see the 903 Smartbus frequently in Heidelberg, Preston and Coburg and it only ever has a handful of passengers

      • T says:

        I don’t think that 15 min is a good frequency at all and bus routes are confusing. Most cities have buses running along main arterial roads in a relatively straight line. That makes it much faster and user friendly. Why do the buses here take crazy zig-zag routes? These routes just take longer which, coupled with infrequent service mean it will never replace a trip by car, which is often cheaper if you already have a car sitting in the driveway.

  5. Q.Maisie says:

    I think the TIME dimension is crucial. I pretty well only use my car on weekends, but the thought of using public transport to get to the market, visit my elderly parents, get my daughter to netball and back, then get home all in a 6 hour period chills me to the bone!
    The car gives me sponteneity in my travel decisions, independence from the vagaries of public transport and saves me huge swathes of time. I should add that the market, netball and mum and dad’s are all on well established public transport routes in the northern suburbs, but I’m just not prepared to devote the time to public transport. And Alan, it’s not a matter of even using the saved time to do something more productive – that’s what my day in the car is about – but its about giving me some spare time to be unproductive and RELAX!
    I can see that I am paying a huge impost to essentially use my car on one day of the week, but ultimately I judge it to be worthwhile.

    • brisurban says:

      I would agree with the time dimension. More people will use public transport if the waiting time was less. Perth generally runs trains every 15 minutes in the off-peak times, on all lines.

      Brisbane’s buses have come a long way since 2004. So its getting better, but still has a long way to go. The major problem is that you can get to and from the city, but you can’t really get around the city. I guess trips like this are more likely to involve car. I couldn’t imagine how it would be possible for someone to live in outer Melbourne without a car unless they were next to a smartbus route or train station (and even then the frequency leaves much to be desired).

      I think this is the deciding factor. Car costs a lot but it has high benefits. Transit costs less but it has lower benefits. The quality of the service offered needs improvement. Would people be willing to pay more for a more frequent service? I suspect the answer would be yes.

  6. Dave says:

    I suspect discussion of public transport value vs car is best centred, for much of Melbourne, around the relative costs of a second vehicle vs using public transport. Past a certain threshold (proximity to PT? frequency limit?) you’re going to get the second vehicle, and then in the typical household, you’re probably a lost customer to PT except for events (football/Avalon airshow or whatever) owing to the sunk costs.
    Your comment “A suburbanite reading this will very likely be in an entirely different demographic category by the time suburban public transport in Melbourne is improved to the level where it provides a close substitute for a car!” worries me a lot; will we be able to provide effective mobility to an ageing population in suburbs basically designed around car use, when that population may not be medically able to drive, etc? How can the suburbs be “retrofitted” to enable closer proximity to services and effective mobility to non-drivers for people to age in place, or will we expect people to move as they get too old to be able to move around in the suburbs?

    • Alan Davies says:

      The key phrase in what I said there is “close substitute for a car” because I was discussing the option of having a level of public transport service that is so good relative to the car that many people will elect to do without a car.

      That will be extraordinarily hard to achieve across most of the suburbs (and isn’t a sensible or realistic goal IMO but that’s another story) but I’m much more optimistic that we will still get a much better standard of PT than we have at present. The Smartbus that Brisurban mentions above is a step in that direction.

      I don’t think Smartbus is substituting for many cars but it is giving much higher mobility to people who are already exclusively PT users. The older demographic you mention will place a lower valuation on their time than they did when they worked so it won’t be necessary to provide a PT system that can out-compete the car. But it will have to be better than what we’ve got now.

    • Russ says:

      Dave, the problem of an “ageing community” can be over-stated in situations like this. People are living longer because they are healthier, but healthier people are more mobile, so the impact of reduced mobility is being felt later in life, and not as a significant increase in the time spent with reduced mobility. That said, population dynamics mean there will still be an increase in the number of people in those circumstances, but that isn’t necessarily a bad thing: the more people there are dependent on p/t, the easier it is to justify the sort of service they’ll need.

  7. T says:

    Convenience is always going to win out. People will only leave their cars if it’s more convenient to take PT. If you look at cities that have higher PT usage you see that people chose to use the subway (eg) because it’s faster and easier than driving. In a system where the trains run every 3-5 minutes and go everywhere, such as connecting directly to all shopping centers, museums, galleries, etc, and has very few fault issues or delays, then you can understand why people would abandon the car. This system, by comparison, is a joke so no one who can afford a car will chose not to get one.

  8. […] are expensive, buses are not. That's debatable Houston Strategies: Economics of transit vs. cars -Does driving cost less than transit? The Melbourne Urbanist and even if it's true it's irrelevant. Public transportation in rural areas would be much more […]

  9. […] commute times by car – the overwhelming mode choice of outer (and middle) suburban settlers – do not increase significantly with distance from the city centre, largely because most jobs are in the suburbs. Proponents of […]

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