Nudge

In a previous post I touched upon the cost of commuting across the river, the main issue being that the pricing of the various means of transport does not encourage people to leave their cars at home, time to look at this more closely...

A person driving through either of the tunnels in a normal car will pay the following fees

There is no discount for a return journey but a regular commuter can use a Fast Tag and receive a 20p reduction on each journey, this makes a return journey cost £2.60. The Fast Tag is a good choice because you pay on a per-use basis rather than a fixed monthly cost, so if you miss a day here or there you do not lose money.

These are the fees for using the train from Hamilton Sq to James St, this is one stop, a journey of about a mile.

You can see immediately that a single is £2.30 compared to £1.50 for a car, a return is £2.80 compared to £3.00 for a car.

It's the rail passes that are interesting though, for a 5 day commuter a weekly pass is £1.72 each way, more ven than just paying on the day. The monthly pass is £1.36 assuming 22 working days in a month. However, unlike the car commuters who only pay when they use the tunnel, a rail commuter pays a fixed fee for a month, so if you miss a couple of days the cost per journey can jump to £1.50

The ferry is a bit better

A weekly pass will set you back £1.10 per journey and the monthly pass £1.02, again provided you don't miss any days. But the ferry is slow and cold and if you miss it you could be waiting half an hour for the next one, having said that it is a lovely way to travel.

While researching this I noticed Merseytravel is to introduce a new smartcard, the Walrus, but it doesn't say if the pricing structures will be affected, in fact it looks like it will stay the same, certainly until the pay-as-you-go version is introduced in 18 months time.

So where does this leave us? Well as we've seen in many scenarios it is cheaper or no more expensive to travel by car than by train or ferry which is no incentive for Wirralians to commute by bicycle. The river is an unfortunate barrier to cycling, in most parts of the country a cycling commuter could travel their whole journey by bicycle, a cyclist commuter between the Wirral and Liverpool is forced to interrupt their journey with another mode of transport. Many cyclists will ride down to Hamilton Sq/Woodside so that they get the most exercise and spend the least amount of time possible on the train or ferry, but even this very short journey is more expensive than the tunnel.

It would be nice if Merseyrail/Merseytravel show some commitment to getting people out of cars by restructuring their pricing and they could start with this most obvious discrepancy, a reduction to £1 single, £1.50 return would not significantly reduce revenues but would provide an incentive for people to change and would be symbolic commitment to nudge people into changing their habits.

The Social Cost of Motoring

In round terms, ...the Government raises close to £50 billion from road users.

The Campaign for Better Transport extrapolates from the Government research on marginal external costs (above) to reach a total cost of externalities of £70 billion–£95 billion per annum at [2009] prices.

House of Commons Transport Committee - Taxes and charges on road users 2009

A great deal of those costs fall on individuals rather than the government, bereavement, noise, congestion, air quality, essentially standard of living costs borne by the wider society. So it might appear that the government raises £50bn but only spends some £9bn on maintaining roads, but the other £41bn goes towards offsetting the costs to society. A non motorist cannot claim back the cost of their reduced standard of living directly from anyone, but by raising taxes from motorists, the government can reduce other taxes paid by everyone. Even so there is still a £20-45bn shortfall between what motoring costs society and what motorists pay. Put another way, £45bn is half of the total raised by National Insurance, an even more direct tax on jobs than fuel duty. In fact, if you raised that extra £20bn in taxes from motorists (increase fuel duty by 40p, probably more like 50-60p to account for reduced sales due to changing behaviour) the income tax personal allowance could be raised to about £12,000, just about the right amount for those who insist on a living wage. OK, some inflation will follow offsetting things a bit, but we're in the ballpark.

Low taxes on motoring is not essentially right wing idealism, indeed, undertaxing it as we are is effectively socialising the cost of motoring.

Thoughtfully a list was drawn up of the cheapest and most expensive fuel around the world, the list of the cheapest countries could almost be a list of the world's greatest tinpot dictatorships. Meanwhile, Norway, the highest priced place in the world for fuel has been found to have the highest standard of living in 10 out of the last 11 years. Not a causal link of course, but I think it's safe to say that low taxes on fuel is not a necessity for making life better. I've been to Norway, I don't need to go to Turkmenistan to know which country I would rather live in.

Tax Incentives for Cyclists

The UK has the Cycle to Work Scheme which I have used twice now to purchase bikes, keeping about £900 out of the grasping hands of the tax man and in my pocket. However as with so many things velo related our near neighbours have taken it a step further, the Netherlands and Belgium in particular give tax relief on cycling to work

Netherlands

Bicycles - The employer is allowed to provide a tax free payment for commuting by bike of again €0.18/km (23 US cents). Employers are also allowed to provide employees with a new bike, but only once every three years. The value of this bicycle is treated as income, but if ite is used for commuting, the value of the bike is fixed at €68 ($US89) for tax purposes. This applies to bikes up to a maximum value of €749 ($US976). Employers may also providebike accessories (e.g. maintenance, clothing locks etc.), this is tax free up to a value of €250 ($US326).

 Tax treatment of employer commuting support: an international review

Belgium 

In Belgium, companies and public organisations are likewise allowed to pay their employees when cycling to work with an amount of 0.20 € per kilometre per day (no more than 15 kilometres a day). The supplement is tax free for the employees and the employers get tax credit for the expense.

Tax incentives for bike commuting

Commuting distances
We can see on table 7 that 20% of commutes are under 2 miles and 46% are under 5 miles. Of those 12% of car commutes are under 2 miles and 40% of car commutes are under 5 miles.
Commuting and business travel factsheet tables – April 2011 (XLS – 211 KB)

Table 11 says average occupancy is 1.2, so many people could change modes without affecting travel partners.

We'll go for a middle ground of 3 miles because it is roughly the length of my commute. Cycling 3 miles is achievable for most people I reckon. 5 miles is perfectly doable by many. At these sort of distances people are probably travelling on 20/30/40mph roads, a fair bit of stopping and starting, a three mile commute might take 7 minutes by car or up to 14 minutes by bike. It might be 100% longer, but the nominal difference is only 7 minutes.

The marginal cost of the commute by car is petrol + depreciation due to increased mileage + some wear and tear, nicely estimated here. I think due to higher costs of motoring in the UK than US we will convert he numbers to pence without adjusting for exchange rate. So marginal cost per mile is £0.23. 3 miles, twice a day for 222 days a year = £306

Belgium's tax incentive of  0.20 € per kilometre equals £0.27 per mile = £360

So the toal incentive is equal to £666 per year, less £100 for a pair of tyres and a service.

I wonder how many would change mode for £566 per year?