Cycling and Cents — The Bicycle ROI

It’s winter in Boston – cold, windy, occasional snow.  And yet every time I go out I see people bicycling.  They weren’t here ten years ago; or even five – certainly not in the winter!  It suddenly feels like we’ve reach an inflection point:  there are enough people who use cycling as a major form of transportation that it’s become a year-round presence.

The US Census Bureau agrees.  Their 2008 American Community Survey found that the share of bicycle commuters nationally increased 43 percent since 2000.  In supportive environments it grew even more:  the 27 large cities recognized as Bike Friendly by the League of American Bicyclists had increases nearly 60 percent larger than the national average.  (http://www.bikeleague.org/resource/reports)

There are lots of reasons for this upsurge but in these fiscally tight times it’s illuminating to particularly analyze the dollars and sense aspects.  It turns out that bicycling is a good deal for both the cyclist and the city.

END OF AN ERA

The past century of car-centric transportation and city planning has outgrown its benefits.  Cars once freed people from the social restrictions and economic limitations of small towns and urban neighborhoods, creating opportunity and spurring economic growth.  At one point, it was estimated that nearly one out of every seven jobs in this country was related to the automobile industry in some way – from coal and steel and rubber and plastic to tourism and housing construction and nearly everything else.

But now, with nearly 10 percent of the US workforce unemployed and the US auto industry nearing bankruptcy, our dependence on cars is seen to be the cause of air and water pollution, time-consuming commuting congestion, neighborhood decay, and increased costs.  In 2005, U.S. motor vehicles produced $56 billion in health and other non-climate-related damages, nearly 2 cents for every mile traveled. <source: National Resource Council, 2009, Hidden Costs of Energy: Unpriced Consequences of Energy Production and UseEven the mighty Interstate Highway System, which initially facilitated commerce while making suburbanization the primary way of pursuing the American Dream, has become so chocked with commuters that it no longer serves as well for the movement of goods and services.  Congestion costs average commuters almost 40 hours a year and costs the country nearly $78 billion while wasting over 2.9 billion gallons of gasoline. <http://tti.tamu.edu/infofor/media/topics/congestion_mobility.htm>

Roads are expensive. It costs tens of millions for every mile of new highway.  (Bike lanes cost as little as $5,000 per mile.)  Furthermore, despite the implication of the “I pay $X in annual road tax” signs on the back of some trucks, roads simply don’t pay for themselves.  Even a half-century ago, road “use fees”(fuel taxes, vehicle registration fees and tolls) only paid for about 71 percent of what was spent on roads.  Today, that percentage has dropped to about 50 percent, with the remainder coming from revenues not directly related to highway use including income, sales and property taxes, as well as bonds.  <source: Subsidyscope>   Subsidies for drivers amount to up to $3,000 per driver per year.  If similar support was given to public transportation every bus and subway would be state-of-the-art and transit systems would be rapidly expanding into suburban centers.

It’s not just the car and the roads, it’s the other car-associated infrastructure costs as well.  Not even including the cost of the land, it costs up to $5,000 to build a flat-surface paved parking spot and up to $50,000 for a single space in a decked garage. http://www.streetsblog.org/wp-content/pdf/ITDP_Parking_FullReport.pdf

Given that nearly 30% of urban trips go less than one mile and nearly 50% cover less than three miles (even in rural areas, 20% of trips are less than two miles long), using a car as the primary mode of travel no long makes economic sense for people who have a viable alternative – public transportation, shared vehicles and car pools, walking, or bicycling.  And gas prices aren’t the only driver:  in March 2009, when gas averaged $2/gallon, American drove more than a billion miles less than the previous year when the gas price was $3/gallon.   It may be hard to believe, but even in car-dense American where there are more cars than adults, nearly one-third of those adults either can’t drive or choose not to.

THE VALUE PROPOSITION

The US population is expected to grow by another 100 million over the next fifty years.   If every one of those additional people owns a car our roads will simply freeze.  Rush hour will last all day.  Trucks will not be able to deliver supplies.  Customers will not be able to shop.  No one will be able to move.  And we know that building more roads will simply attract more cars; traffic grows to fill the available space.

There is strong evidence, however, that even a small shift of people out of cars would have a huge impact on already full capacity roads.  According to Federal Highway Administration data, the 3% drop in traffic on “urban interstates” from 2007 to 2008 resulted in a 30 percent drop in peak hour congestion.  <source: http://scorecard.inrix.com/scorecard/summary.asp>

So we need alternatives.  Trains for middle-distance passengers and long distance freight – one freight train can carry as much as 280 tractor-trailers and move a ton load about 425 miles on one gallon of fuel.  Public transportation (subways, trolleys, and bus transit) for regional and cross-town travel – the most important mode for metro areas.  Walking and bikes for denser areas – in urban areas where cars and bicyclists travel at similar speeds, bike lanes can accommodate 7 to 12 times as many people per meter of lane per hour than car lanes, and bicycles cause less wear on the pavement.

But changing modes means changing the formulas that currently assign about 80% of highway construction funds to roads.  Currently, even in the 52 largest metro areas, annual spending of federal funds on bicycle and pedestrian projects averaged just $1.39 per person!  Nationwide, less than 1.5 percent of funds authorized under the current federal transportation law have been spent on projects to improve the safety of walking and bicycling.  The cost-benefit equation for bicycling suggests we should change this imbalance.

GOING IN ANOTHER DIRECTION

A key policy driver is that investment in transit, bicycle, and pedestrian facilities pays off for both individuals and cities, especially if combined with land use policies that promote density.  When there is support for all “Five Es” of engineering, encouragement, education, enforcement, evaluation (to which I add a sixth — equity) there is a significant return.  In Portland, for example, compared with national averages, commuters annually travel 2.9 billion fewer miles, save 100 million hours for more desireable activity, and can spend $2.6 billion on more important goods or services.

According to one study (based on 2006 gas prices and a 10 mile round trip commute), a person who bikes to work for a year will save $1,825 in auto-related costs, reduce carbon emissions by 128 pounds, conserve 145 gallons of gasoline, avoid 5 hours of gridlock traffic, burn 90,000 calories, reduce their risk of heart attack and stroke by 50%, and enjoy 14% less claims on their health insurance.

Researcher Todd Litman of the Victoria Transport Policy Institute quantified the benefits of switching from driving to bicycling.  Including the value of congestion reduction, roadway cost savings, vehicle cost savings, parking cost savings, air pollution reduction, energy conservation, and traffic safety improvements, Litman estimated that replacing a car trip with a bike trip saves individuals and society $2.73 per mile. http://www.vtpi.org/nmt-tdm.pdf A 2009 British study showed that cycling brings such enormous societal cost benefits from health improvements, congestion reduction, and environmental protection that projects only need to add three rides a week over the typical thirty year life span to justify every $16,521 in cost.  http://www.bikeforall.net/news.php?articleshow=613

Another policy insight is that shifting the balance of infrastructure capacity slightly towards bikes doesn’t hurt local businesses.  In San Francisco, two-thirds of the merchants on Valencia Street said that the four-year-old bike lanes had had a positive overall impact on sales.  And a Toronto, Ontario study even suggested that people who walked or biked to a business district spent more money in the area each month than those who drove.  Three quarters of the surveyed merchants said they believed that business would improve or stay the same if a bike lane replaced half of the on-street parking.  http://www.cleanairpartnership.org/pdf/bike-lanesparking.pdf and http://www.bikewalk.org/2004conference/sessions/28_Business_calm/TrafficCalming_summary.pdfAnd sale prices of homes within a half mile of the Monon Bike Trail in Indianapolis, Indiana were 11 percent higher than those further away.  http://www.sagamorepub.com/ebooks/jprabackissues/jpra223555/Article5.pdf

Even on its own, the bicycling industry has economic benefits.  Nationally, the bicycling industry contributes an estimated $133 billion a year to the U.S. economy, supports nearly 1.1 million jobs and generates $17.7 billion in federal, state, and local taxes.  Another $46.9 billion is spent on meals, transportation, lodging, gifts and entertainment during bike trips and tours.

Finally, it doesn’t take much to attract more riders – a US study found that each additional mile of bicycle lane is associated with an approximate one-percent increase in the share of bike-to-work trips. http://www.des.ucdavis.edu/faculty/handy/ESP178/Dill_bike_facilities.pdf

It appears that “if you build it, they will come” happens with bicycling, too.

The League of American Bicyclists (LAB) have compiled an excellent summary of “The Economic Benefits of Bicycle Infrastructure Investments,” which is where I found much of this data: <http://www.bikeleague.org/resources/reports/pdfs/economic_benefits_bicycle_infrastructure_report.pdf

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