Should I drive or bus into work?

 

Should I drive or bus? A brief look at the cost of these choices from Langford to Victoria.

Suppose on a given day you are left with the choice – Do I drive from Langford (we will say happy valley area) to downtown Victoria, or do I take the bus? Let’s evaluate the cost of each mode of transportation for a given day.

Implicit / Time Costs

From the happy valley to downtown Victoria it is approximately 22 km, and according to google maps if you were to drive to arrive by 9:00 am this trip would take you between 26 and 60 minutes, let's take the midpoint and assume that on average this trip will take 43 minutes. Google maps report a similar time commitment for your commute home (arrive by 5:00pm) Thus the decision to drive by car will result in approximately 86 minutes of daily commuting.

This same trip by bus, direct, one bus, is estimated to take 43 minutes for the commute in, and 52 minutes for the commute home for a total of 95 minutes according to google maps. While some may argue that this is unfair, but the choice to commute by bus will require i) time spent waiting for the bus and ii) time spent walking from your residence/work to the bus stop. Let’s presume that this is 15 minutes. Thus, the decision to commute by bus will result in approximately 110 minutes of daily commuting.

If we presume that you value your time at a constant $15/hour we can compute an implicit time cost of commuting for each mode of transportation such that we arrive at a daily cost of $21.50 for driving versus a daily cost of $27.50 for taking the bus.

Explicit / Actual Costs

While this time cost is an implicit cost we can also work out the explicit or actual cost faced before utilizing both to determine to the total cost for each mode of transit.

Driving by car is a distance of approximately 22km in each direction for a total of 44km daily. According to the US EPA, the average fuel efficiency of vehicles in the US works out to 9.3 L/100km. As we have no reason to assume a difference between the US and Canadian average, we can utilize this value as well, scaling it up by 10% to recognize that most of this commute time is in traffic and thus not at optimal fuel efficiency. Thus, we will presume a rate of fuel usage of 10.19 L/100km. Given the distance of 44km a day at this rate, driving would cost the average commuter $8.02 a day

 The explicit cost of taking the bus is relatively easier to determine – If you were to buy a day pass, the current price of this is $5.00. Thus, bussing would cost $5.00 a day

Total Costs:

                At this point working out the total cost is as easy as summing the implicit and explicit costs – doing so we get the following total costs for each mode of transportation:

                Thus, we see that for the average commuter, the daily cost of their commute is the cheapest by driving oneself via personal vehicle. If the average commuter sees the only benefit as arriving at work and arriving home, then there is no difference in benefit, and thus cost minimization will result in the optimal choice, driving.

Sensitivity analysis:

                This analysis is subject to several assumptions. The two primary assumptions evaluated are the cost of time and the fuel efficiency of one’s vehicle. Thus, it is possible to obtain differing results by varying these values.

                With respect to the cost of time, at a rate of $7.55/hr, a commuter would be indifferent between taking the bus or driving. As one's cost of time drops below this, bussing becomes the better choice, while as one's cost of time rises above this value driving becomes the better option.

                With respect to fuel efficiency, at a rate of 13.97 L/100km a commuter is indifferent between bussing or driving. As fuel efficiency drops below 13.97, driving becomes the optimal choice, while as fuel efficiency rises above 13.97 bussing is cheaper. 

                Finally, if we presume constant average fuel efficiency, a gas price of $2.455/L is the indifference point between bussing and driving, with prices above $2.455 resulting in bussing being optimal.

                Of note, or concern for transit advocates, is that with the increasing electrification of vehicles, the impact of this is two-fold in that i) Fuel efficiency drops to 0 L/100km, and ii) electric commuters will not need to worry about fuel prices. Thus, with increased electrification, only the implicit, time cost, enters into the decision framework. Thus for public transit to win out over personal electric vehicles, either the unit cost of utilizing one's vehicle would have to increase in other forms (paid parking?) or the time cost of public transit would need to decrease through more frequent and direct routes.

                Of final note on the sensitivity analysis – this was conducted for a fairly direct route that only involved one bus that was able to utilize rapid bus lines. If one were to repeat this analysis for other routes IE Happy Valley to Uvic, one finds even greater separation of costs in favor of driving as a mode of transportation given the increased time associated with bussing as well as the transfers. 

Gender Income Gaps, Shelter costs, and equity

 

Source: https://blog.vantagecircle.com/gender-pay-gap/

               Time to be a little bit of a nerd and get excited about census data release day. Unfortunately, other than the data being released, there is little to get excited about.  In the below image we can see the income profile for men and women in Langford. What we see is, unfortunately, reminiscent of what is seen in many communities around Canada, Women tend to be over-represented in the lower incomes, while men tend to be over-represented in the higher incomes. Without getting into the causes, or some of the (terrible) justifications for a gender wage gap, I want to take a look at the impact this has on the security of housing.

               With highly inflated house prices and interest rates on the rise, I wanted to take a step away from the ownership discussion because i) the current carrying costs of qualifying for a new mortgage are so ridiculous that very few people possibly could unless they already have a sizeable amount of equity and ii) because the recent census release also included the housing tenure information which showed that, at just over 35%, an increasing number of Langford residents are renters.

               With ownership, the majority of owners are shielded by wild swings in the valuation of their property, and with most Canadians utilizing fixed-rate mortgages, many will continue to be shielded from interest rate fluctuations for up to the next 5 years.

               The same is not true for renters. Renters typically face annual rent increases up to the maximum as set by the provincial government. But as renters move due to changing housing needs, or to be closer to work, or due to eviction, their rent is re-negotiated at market prices. This means that renters are far more susceptible to paying the current market rent than homeowners are to the current market payment for housing. That is, Renters are more likely to be paying the current, high, market price of rent, well homeowners are more likely to be locked into a constant, lower, payment for their home.

               Thus, if we look at current market rents, versus current incomes, what we find is that only the top 19.85% of income earners are able to afford an average 1-bedroom rental at an affordable rate in Langford.

               Note: Affordability is determined as 30% or less of your before-tax income going towards shelter.

               What is exceptionally troubling is if you break this down by gender. Amongst those identified in the census as male, the top 26% of income earners are able to obtain the average 1-bedroom at an affordable rate.  While only the top 13.7% of female earners are able to obtain a 1 bedroom at an affordable rate.

               It is often presented that renting is a stage of life that you get through until you can obtain high enough income and wealth levels to afford to buy. What we are finding is that this is untrue, with all but the highest income earners being unable to rent a 1-bedroom in an affordable fashion.

               Many argue that this is an unfair verdict. The average household in Langford is 2.4 people, after all, thus most of the time these shelter costs are split between two income earners. We can similarly look to see what percentage of households are able to afford a 1-bedroom. The issue that then arises is that a 1-bedroom may not be suitable for a 2.4-person household – but we will overlook this to maintain a constant comparison.

               The further issue is social in nature and is that as housing becomes increasingly unaffordable for a single individual it encourages individuals to remain in relationships they may not otherwise remain in out of economic necessity. This creates understandable problems that I will not go into here.

               Just the same, we can see in the image below the distribution of household incomes, and from this determine that only the top earning 31.25% of households would be able to afford a 1-bedroom rental at an affordable rate. While this is better, it still signifies a huge problem in that only the top-income earners can afford to rent at an affordable rate.

          With homeownership becoming increasingly out of reach resulting in an increasing percentage of our residents being renters – we cannot afford to overlook this segment of the population. As a city, we need to ensure that rentals are being built and provided to residents at an affordable rate. It is through the initial years of renting that a household can build up the wealth needed to enter the housing market. If the rental market itself is closed off to all but the highest income earners then how can this happen?

This is clearly an issue that affects all members of society, even those in the top income brackets. What do you see as a potential solution? 

Feel free to comment below.