What is the cost of commuting by car compared to public transport?

Weekly cost of commuting per household by car and public transport, Melbourne (Data from BITRE)

The exhibit shows that in terms of weekly household cash outlays, commuting by public transport is vastly cheaper than commuting by car, irrespective of where the commuter lives (see first three rows).

Both fixed and variable costs are much higher for cars than for public transport. For example, outer suburban households where the workers drive spend $302 p.w. compared to $41 p.w. for households whose workers use public transport.

The real killer for cars is fixed costs such as depreciation, interest and registration. These dominate variable costs like petrol, servicing and parking.

The numbers are taken from this report (which I’ve mentioned a few times recently) by the Bureau of Infrastructure, Transport and Regional Economics (BITRE). The Bureau looked at the journey-to- work costs a household of two adults and two children aged under 18 years face in Melbourne, and how they vary by location and mode.

Location is an important variable – BITRE assumes household income, level of car ownership and commuting distance/time vary substantially by location (measured here as inner city, middle suburban and outer suburban). It’s assumed households who drive own a new 4 cylinder Camry. BITRE only counts that proportion of car standing costs attributable to commuting.

Although public transport costs considerably less in terms of cash outlays, the exhibit also shows commuting by public transport takes much more time than commuting by car, no matter where a household lives. The extra time is enormous for households living in the middle and outer suburbs i.e. for more than 90% of Melburnians.

For example, the cumulative weekly commuting time for the workers in an outer suburban household who use public transport is 1,326 minutes, whereas workers in neighbouring households who drive only expend 561 minutes per week. Even members of inner city households who use public transport spend more time commuting than members of outer suburban households who drive.

BITRE value the opportunity cost of time spent commuting at average weekly earnings (just over $800 p.w.). With this assumption it’s evident time is far and away the main cost of commuting by public transport, even for households who live in the inner city. That’s a key reason why many argue the focus of public transport spending should be on improving services, not lowering or abolishing fares.

Still, notwithstanding the significant time penalty associated with public transport in Melbourne, it costs inner city and middle suburban households significantly less in total to commute by public transport than by car. Even in the outer suburbs where public transport is at its worst, the total cost on average is pretty much the same according to BITRE.

So why is public transport’s share of work journeys only 24% in the inner city, around 15% in the middle suburbs and below 10% in the outer suburbs?

That’s a good question and I think it could point to a major limitation of BITRE’s analysis – the Bureau doesn’t explain the underlying travel pattern that its analysis is based on. The reader understandably assumes commuters have a choice between two modes for the same trips, but what I suspect the numbers in the exhibit are really showing is the existing pattern of accessibility to employment in Melbourne. And that varies greatly by mode.

At present, public transport users can only comfortably get to a limited number of Melbourne’s jobs, mostly in the CBD and near-CBD. Existing public transport use reflects that limitation – most trips are CBD commutes. However given that a little over 80% of jobs are outside Melbourne City Council’s boundary and relatively dispersed – indeed, 50% are more 13 km from the CBD – most jobs are more easily accessed by car-based commuters.

So BITRE’s figures seem very limited in their application and should be interpreted with that caveat in mind. Having said that, I have some issues with the methodology anyway.

I think it’s possible BITRE has over-estimated the costs of commuting by car, by attributing too much of the standing costs of car ownership to the journey-to-work. BITRE relies on a study by Inbakaran and Shin which assumes 66% of car use by outer suburban households is for commuting and the corresponding proportions for middle suburban and inner city households are 58% and 46% respectively. Unfortunately, Inbakaran and Shin don’t explain how they derived these figures. They don’t sit well in my view with VISTA’s finding that only 33% of travel kilometres in Melbourne are for work-related purposes (or just 22% when measured by number of trips).

I also have some doubts about the overall methodology. BITRE has sought to isolate work trips from other sorts of trips, but the reality is those outer and middle suburban workers who commute by public transport almost all come from households who own a car (or two….). BITRE doesn’t factor in the benefit of having a car for non-work trips – it might indeed cost no more to commute from the outer suburbs by public transport if the household doesn’t own a car, but life in the suburbs for working families without a car is miserable (and they accordingly make up a miniscule proportion of all households in the outer suburbs).

Of course there’s another whole discussion to be had about the social cost of driving to work versus using public transport. That’s for another day.

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7 Comments on “What is the cost of commuting by car compared to public transport?”

  1. Dudley Horscroft says:

    As I recall, only in the inner suburbs is there a reasonable choice between car, tram and train – and then only for trips to or from the CBD. In the outer suburbs, the choice is car, or (nearly) nothing. While not strictly relevant to your these, this may be of interest – I can across an email relating to rural roads in the USA which were being converted to gravel, as the local road authorities had no money. The figures given were interesting. This is the text of my response.

    “Interesting figures.
    it costs up to $300,000 to replace a mile of paved road surface now.
    Resurfacing can run about $100,000.
    To tear up a thinly paved road and add some new gravel . . . costs . . .about $5,000 a mile.
    With maintenance costs included, engineers have often used a rule of thumb that a road needs 150 to 200 cars a day, or the equivalent in heavy-weight traffic, to be worth paving.

    So, $300 000 a mile, means, say, at 8% (interest plus sinking fund to pay off the road over its working life), $24 000 per year. 150 cars per day is 54 750 per year. So dividing the cost by the number of cars, each car should pay a toll of 43.8 cents per mile to justify paving the road. Where a road is already paved, to pay the costs of resurfacing – assuming that it will be resurfaced as required until no longer possible and then allowed to revert to gravel – the toll should be about 15 cents per mile.

    Now I know that there are oddities re toll roads – one correspondent has mentioned that he has to pay the full toll for an X mile journey even though he only uses the toll road for a couple of miles – which is a totally unfair impost. But the above figures give some indication of what toll rates should be to recover the cost of construction and operation of a fully paved and well maintained road.

    And consider the cost of gasoline fuel. Say a car gets 30 miles to the gallon. If the cost of roads were to be included in fuel costs, this would mean a gallon of gasoline should cost at least 30 times 43.8 cents = $13.15 – and that is before the oil companies take their whack for production, transport, refining and distribution, plus the local selling costs. It also ignores ‘extra’ unusual costs such as viaducts, bridges, tunnels and land acquisition – which latter would still have interest costs even though, given the infinite life of the acquisition, there would be no repayment costs for the capital.

    Go figure!

    I know that conditions in the USA and Australia are different, but I would think that the figures are indicative of something. Have I made mathematical errors? Or is the cost of roads hidden as much as I think?

  2. Alan Parker says:

    The EU, US, Japan, China and India know they have to reduce oil imports and reduce their
    consumption. In Australia BTRE economists made a serious error of judgment in 2005 and
    put their faith in oil reserve estimates that ultimately are derived from the nationalized oil
    industries of dictatorial regimes. These countries do not publish details about how much oil is
    extracted from each reservoir, what methods are used to extract that oil; nor do they permit
    external audits and some are failing economies.

    Car travel locks us into an unsustainable oil scarce future which the BTRE ( now BITRE ) wants to locks us into. They still subscribe to their dodgy oil consumption forecasts made in 2005 that the 2010 oil price 23 $US a barrel and still only 25 US $ a barrel in 2020. Meanwhile the Price of Oil was US 99.4 $ this morning.

    Fatih Birol, Chief Economist for the International Energy Agency, (IEA) has warned that rising
    oil prices due to the conflicts in Libya and the Middle East could threaten the global economic
    recovery now that oil production has peaked. He said “This significant increase in CO2 emissions and the locking in of future emissions due to infrastructure investments represent a serious setback to our hopes of limiting global rise in temperature to no more than 20C.” The prospect of limiting the global temperature to 2% is

  3. Another excellent piece Alan.

    As you’ve said, life in the suburbs for families without a car is a miserable existence (and I’ve been there and appreciate the fact!). Changing this fact is possible, but will almost certainly not happen in the short or even medium term. What I do believe is far more possible is to reduce the need for most households to own multiple cars.

    First and foremost the bus network needs a complete overhaul to provide better connections between services, higher frequencies and improved travel speeds, or more simply it needs an overhaul to make it more time competitive with the car. Secondly bike infrastructure needs to be provided to make cycling a safer and more desirable mode: this could allow more people to travel to work without a car, as well as allowing more children/adolescents to take the journey to school by themselves. Thirdly, some stronger land use planning regulations should be introduced to push new businesses into activity centres thus making it easier to provide provide public transport these cores.

  4. krammer56 says:

    Another issue is the imputed costs of time used in these sort sof analysis. BITRE have assumed the same value applies to all trip types (costed at the average weekly wage of a bit over $21 per hour). This implies reduced commuter times could, and would, be converted to more work time. This is a commonly used approach, but it would be nice to see it explored a bit more.
    My time travelling by PT includes a nice walk at either end (demonstated mental and physicial health benfits) as well as the time on my bus where I can read (for leisure or work), check emails, daydream, etc.
    On the rare occasions I have to drive I can do none of this, and usually arrive thoroughly frustated by the delays and the other nutters on the road (many of whom ARE daydreaming or checking their emails!).
    On a wilingness to pay/avoid basis I would be willing to pay a lot more to avoid sitting in the car than sitting on my bus. In actual fact, for the JTW trip I make to the CBD, I would be paying a lot more to travel by car, both in terms of actual outlay and in time, depsite having a car sitting in the garage (the sunk vs variable cost issue).
    Clearly not everyone feels this way – they like their own space and object to the “public” part of public transport. This is evidenced by those that drive despite higher dollar and time costs.
    And this is the problem with using average values of times for both behavioural forecasting and for economic analysis.

  5. Russell says:

    Hate public transport and won’t be using it – inconvenience, time, crowding, foul air in train carriages etc. But did this study take into account that a lot of people don’t just commute directly to and from work in their cars? They go to various shops and load up with groceries etc, they call in on elderly parents, or go to a gym, they can stay unexpectedly late at work …. cars give you that freedom to organise your life in ways that public transport can’t. So you aren’t comparing the same things.

    • Alan Davies says:

      For those who drove to work, the authors attributed a proportion of the costs of car ownership to commuting. For those who went to work by public transport, no costs of car ownership were taken into account. See my last three paras.

  6. Alan Davies says:

    Discovered by accident that the PTUA has published a response to this post. It’s set up as a rebuttal, but it makes many of the points I do (although the author thinks my penultimate para should’ve been nearer the start!). But surely it would’ve been more sensible for the PTUA to critique the source i.e. the original BITRE report?


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