True Cost of Transportation

Travel Choice Developments or Transit Oriented Developments (TOD) are quickly becoming the "in" thing for land use and transportation planners. TOD concepts have crept in to the urban planning mindset and are considered by some, including me, to be the best way of completing a livable urban framework. Actually adding transit service is often a deal breaker which makes otherwise livable communities, filled with sidewalks, benches and outdoor restaurants, incomplete.

In Michigan there is considerable talk about adding a commuter rail line between Ann Arbor and the City of Howell. There is also discussion about adding TOD at each of the rail stations. As part of this venture, I am looking to compare the true costs of transportation via auto compared to a ride on the train.

We often only consider the direct costs associated with transportation. For drivers that is the cost of gas and toll's, for transit riders it is fare.

Now there are two ways of looking at the TRUE cost of transportation. One way deals with all the indirect costs or "societal" costs such as the cost of automobile crashes. This method includes everything from air pollution to delay. This is a reasonable method but flawed when we try to look at a users cost.

For example, we may use, as a rule of thumb, a value of time of 10 dollars an hour. This means that an average user would pay 10 dollars to make their travel 1 hour faster. We can relate this by saying if you wait in traffic for a half hour per day your cost is 5 dollars per day. But you aren't really PAYING 5 dollars. You could also consider this lost productivity at work so that if you are paid 30 dollars per hour than society is losing 15 dollars of productivity. If you think about it though the time spent in traffic not at home or not at work would more realistically be turned into time watching TV or time Googling your own name.

The alternative way of measuring the true cost of transportation is a hybrid of direct costs and societal costs, however, from the societal costs I pull out "indirects". These are costs that can easily be attributed to each user.

I'll use this alternative method as I go back to the auto vs. train comparison.


There are two gentleman who live in Howell Michigan, we'll call them Tom and Peyton. Tom and Peyton both have new jobs at the Google Adwords facility in downtown Ann Arbor.

Lets look at each of their days and analyze their transportation costs.

After Peyton has had his coffee and sent the kids to school he jumps in his car for an exciting day of work. Peyton travels down US-23 which is packed with traffic however Peyton doesn't mind the hour commute because he enjoys his alone time in his vehicle listening to Drew and Mike in the morning on WRIF. Peyton gets off the freeway and parks his car in downtown Ann Arbor, he uses his parking pass to get in and out of a structure each day. After a day of meetings, Peyton returns home for a nice dinner.

Peyton's true transportation cost for the day - $25.75

Peyton makes a modest salary of $50,000 a year. To earn that salary Peyton spends approximately 1 hours worth working each day to fund his transportation.

Let's look at how that $25 is spent.

Peyton owns a new Ford Fusion which cost him 20,000, he plans to drive it 15,000 miles per year because be drives 60 miles per day to and from work, 5 days per week. He assumes he can sell his car for 5,000 in five years to a reputable dealer. So we take 15,000 dollars for the cost of owning the vehicle for five years which is a little more than 8 dollars per day.

Peyton's Fusion gets incredible gas mileage and he can do the round trip 60 mile trip and only use 2 gallons of fuel. At $3.00 per gallon, he pays 6 dollars per day to operate the vehicle.

Peyton has always been reliable and he expects the same from his automobile. To ensure this Peyton gets regular oil changes at Victory Lane and spends on average about an additional 250 dollars per year on vehicle maintenance. This works out to be about 1 dollar per day but Peyton is happy to pay this because of the added reliability. This also ensures he can get top dollar for when he trades his car in.

Ever since Peyton got a speeding ticket when he was 16 he has been very careful to do everything by the book. He knows that to legally operate his car he needs vehicle insurance. Plus, if Peyton gets in to an automobile crash he'll need to have his car replaced. The average cost of car insurance in the US is a little under 1,000 dollars per year. Since Peyton's car is relatively new he conservatively estimates his annual car insurance rates to be about 900 dollars. This is about $2.50 per day but a small price to pay for piece of mind.

Peyton's birthday is coming up in a few weeks and he just got mail from the Secretary of State with a bill for $95 dollars to register his vehicle for the next year. Registering his vehicle costs Peyton about .25 cents per day.

There was more mail; another bill, this time from the Ann Arbor DDA. Peyton pays 175 dollars per month to use the DDA parking lots each work day. This works out to about 8 dollars per day.

In review, total cost $25.75

Tom wakes up each morning and walks his kids to the school down the street, he usually has five or ten minutes afterwards to spend with his wife in their new condo before he gets on the train for work. Tom only has about a 3 minute walk to the train that takes him to Ann Arbor where he transfers onto a Bus that takes him within a block of the Google Adwords building.

Tom either brings his lunch or goes somewhere to eat in Ann Arbor. Today, Tom happened to go to the Parthenon which was his favorite Greek restaurant. Tom had a big lunch but by the time the rain dropped him off about 5:50pm he was ready for dinner. Fortunately for him, his wife made lasagna.

Toms true transportation cost for the day - 12 dollars

Where did we get this number from?

Tom doesn't own a car. Since he lives in a well planned TOD he can walk or bike to anywhere he needs to go. It also allowed Tom and his wife to remodel their garage into an extra living room adding about 350 square feet to their condo.

Tom purchased a monthly pass to ride the train each weekday. The pass costs him 260 dollars per month or 10 dollars per day. When Tom transfers to the Bus in Ann Arbor his transfer is 1 dollar. Tom also pays one dollar to rider the bus back to the train station.

In review, total cost - $12

Tom also makes $50,000 per year but since his costs are lower he only works for about 30 minutes to cover the cost of his daily transportation.

This also means Tom spends $15 less per day then his friend Peyton to get from the same town to the same job.

Each year Tom has an extra $3,900 dollars for not using his car to go to work each day. This year, Tom plans to use the money for a new 42 inch TV, to remodel the guest bathroom and to start a college fund for his kid.

The point of all this is to point out the TRUE cost of transportation to you, not by inflating numbers and assigning societal impacts to the individual user. I'm not trying to convince anyone to move or change their lifestyle. I'm just pointing out how expensive transportation is and especially how much it is in our automobiles. Transportation is a part of our daily lives and our daily bills that we often take for granted.


ALL ABOARD!