Skip to Content
Streetsblog USA home
Streetsblog USA home
Log In
Network Roundup

What If We Paid the Full Cost of Driving?

Driving is too cheap in the United States. It's a complicated thing to unpack, but David Levinson, engineering professor at the University of Minnesota and blogger at the Transportationist, attempted to analyze the cost per-minute.

Car sharing service Car to Go charges on a per-minute basis. What if we made all out transportation decisions that way, asks David Levinson. Photo: Wikpedia
Car sharing service Car2Go charges on a per-minute basis. What if we made all our transportation decisions that way? Photo: Wikipedia
false

Levinson estimates that the true cost of driving -- including vehicle purchase price, insurance, taxes, repairs, and costs like parking and air pollution that are not borne by individual drivers -- is about 34 cents per minute.

Unfortunately, the cost we're most likely to consider when making a discretionary trip -- gasoline -- adds up to only about 5 cents per minute. If we made driving decisions based on the incremental costs, and drivers bore the full cost of driving, our behavior would change a lot, Levinson says:

Economists use the elasticity of demand with respect to price to estimate this. This tells us how much demand drops as prices increase. The short run elasticity of demand for driving (measured in vehicle miles traveled) with respect to the price of gas is about -0.05, meaning for every 100% increase in the price of gas, there is a 5% decrease in gasoline consumption (which correlates to driving in the short run, in the long run there is also a shift in vehicle fuel economy). So if we hold that to be true for all costs, going from $0.05 per minute to $0.34 per minute is 676% higher cost (a 576% increase), leads me to expect about a 29% reduction in fuel use (mileage) in the short run if people paid their roughly fixed costs plus infrastructure plus externalities of vehicle ownership as variable costs instead. Of course at the magnitude of shift, the elasticity values may no longer hold. In any case, this is no small matter. Certainly the direction is right, countries with much higher fuel taxes see much less driving in general.

Elsewhere on the Network today: Strong Towns examines the personal impact of one car crash. The Transport Politic considers how to make transit-oriented development work around the Metro stop at DC's Dulles Airport. And Steven Can Plan singles out some of Chicago's worst red-light-running offenders.

Stay in touch

Sign up for our free newsletter

More from Streetsblog USA

Friday Video: Are We All Living in a ‘Carspiracy’?

How does "car-brain" shape the way we think about the world — even in relatively bike-friendly countries like the U.K.?

July 26, 2024

Friday’s Headlines Share and Share Alike

Bikeshares, and e-bikes and scooters generally, are becoming more popular. That's led to more injuries, highlighting the need for better infrastructure.

July 26, 2024

What the Heck is Going on With the California E-Bike Incentive Program?

The program's launch has been delayed for two years, and currently "there is no specific timeline" for it. Plus the administrator, Pedal Ahead, is getting dragged, but details are vague.

July 26, 2024

Talking Headways Podcast: Have Cities Run Out of Land?

Chris Redfearn of USC and Anthony Orlando of Cal Poly Pomona on why "pro-business" Texas housing markets are catching up to "pro-regulation" California and what it might mean for future city growth.

July 25, 2024

The Paris Plan for Olympic Traffic? Build More Bike Lanes

A push to make Paris fully bikable for the Olympics is already paying dividends long before the opening ceremonies.

July 25, 2024
See all posts