## Commuting Cost Analysis: Bus vs Bike vs Car

Over the past 22 months that I have been working at my job I have commuted to work by car, bus, and bicycle. I have come to love getting to work by bike over the past 4 months and cherish my 22.4 mile, 1.5 – 2 hour commute. However, I have received questions about the relative cost of cycling. Is it really cheaper than other forms of transportation?

I always assumed that it was superior in terms of cost incurred compared to both riding the bus and driving – but I had never really put any effort into crunching the numbers on it.

Well, I have finally put together a spreadsheet that helps me analyze the costs of bike commuting as compared to both driving a car and riding the bus. I made some basic assumptions in this cost analysis that definitely need to be mentioned:

• I valued my free time to my wage at work. This means that one hour spent idle is worth \$16.467. This is per Benjamin Franklin’s (and other’s) assertion that time is money.
• Things that I would pay to do are worth the value of my time plus the value per hour of the thing which I pay to do. If I spend \$4 to rent a movie I want to watch and the movie lasts 1.5 hours then the value of the movie would be \$19.13 per hour (\$16.467 + \$4/1.5 = \$19.13). This is considered value added and will be considered as a credit when I calculate the cost of any single mode of commuting. So, if I were able to watch a 1.5 hour movie for free on every bus ride home – it would count as a credit of \$19.13 when I total the cost of commuting by bus. If this isn’t clear now, hopefully it will be in my analysis below.
• All costs are red, all credits are black.  This will help visually distinguish between things that cost money and things that I count as adding value to my life.
• The time horizon for the analysis will be 5 years. This will enable the up front purchase price of items like the car and the bike to be distributed over a period of 60 months. I think that this is certainly reasonable.

### The Cost of Driving

With these assumption in mind, let us examine the cost of driving to and from work. Here are the basic costs of driving and the costs associated with them:

• Vehicle – \$33.33 per month – I imagine that the value of my current vehicle is ~ \$2000 (Kelly Blue book agrees) so that is the monthly cost to use my car if it were to last an additional 5 years. With 165,000 miles on it right now, this might be a very generous assumption – but for the sake of this analysis I am going to make this assumption.
• Vehicle Maintenance – \$25.33 per month – This includes 4 oil changes a year, \$90 for tires a year, and \$15o for miscellaneous repairs and fixes a year. I honestly don’t know if this number is accurate or reasonable, but it seems like it is.
• Gas – \$35.12 per month – This is from a 25.8 mile daily, round trip commute where I average 30 miles per gallon.  It also assumes a gas price of \$2 a gallon. This is the value of gas today, but in the past year gas prices have been as high as \$4.50 per gallon. I’ll include a table with different driving totals for a variety of gas costs at the bottom of this section.
• Insurance – \$87.99 per month – This was the cost to insure me as the 25 year old sole driver of a 1995 Toyota Corolla with Farmer’s auto insurance.
• Time Costs – \$336.20 per month – I would spend an average of 20.42 hours a month on the road if I were driving. That is about an hour per working day per month.

Total Monthly Costs: \$517.97

#### Gas Price Affect on the Cost of Commuting

Gas Price Monthly Commute Cost
\$1.50 \$509.20
\$2.00 \$517.97
\$2.50 \$526.75
\$3.00 \$535.53
\$3.50 \$544.31
\$4.00 \$553.09
\$4.50 \$561.87

### The Cost of Bus Commuting

With no start up costs, bus commuting probably has the fewest cost categories to deal with. They are:

• Bus Fare – \$64 per month – This is the standard fare for a monthly pass on the bus that I would ride if I were commuting by bus. Chances are it will change over the course of 5 years, but I don’t want to deal with inflation in this example so I am not going to do it.
• Time Costs – \$1008.60 per month – Commuting by bus would eat up about 3 hours of my day, for an average of about 61.25 hours per month. About 100 minutes of this would be time spent on the bus and about 80 of it spent walking from the closest bus stop to my office.
• Reading Credit – \$356.62 per month – While riding the bus I would have about 1 hour of reading time per day. I mostly read free books from the library or material from the internet, so there are no additional costs here. Also, since I value my time reading slightly higher than I value my time working I have put the monetary value on reading at \$17.47, a dollar more per hour than my work time.
• Exercise Credit – \$346.41 per month – I like to walk and it is decent exercise for my body. I do spend time walking on my own as a way to relax both my body and my mind from a day of work. It gives me time to think, which I do value. This activity has a value of \$16.97 (my base time value plus \$0.50).

Total Monthly Costs: \$369.50

### The Cost of Bike Commuting

Bike commuting is my current mode of transportation to and from work. Its costs are as follows:

• Bike – \$2.67 per month – My current ride cost me \$160 cash money from a nice deaf man in La Jolla.  It is old (probably from the 70s or 80s), but it rides well enough to make me think it will last for 5 more years – easy.
• Bike Maintenance – \$20 per month – I really haven’t spent this much so far on maintenance, but I don’t really know the costs that I could incur in the future because I haven’t learned to properly maintain my bike.  I think \$1200 over the course of 5 years will definitely be more than enough to cover any of fixes that might crop up, seeing as how it is 7.5 times the cost of my bike.
• Cycling Apparel – \$5 per month – I haven’t bought anything in terms of cycling apparel, but I do keep thinking about buying shoes for my clipless pedals – I just can’t seem to get up the gusto to check them out and fork over the dough.
• Time Costs – \$558.09 per month -  This assumes 1 hour and 40 minutes in the saddle each day, or two 50 minute one way trips.  That comes out to about 33.9 hours a month, on average.  It also means that I travel about 13.4 miles per hour on my rides home – which isn’t very fast.
• Exercise Credit – \$591.99 per month – The exercise value of cycling is very high.  It is great cardiovascular activity, promotes flexibility (even though I am terribly inflexible), and strengthens the core.  For the sake of this analysis I have valued my time cycling at \$17.47 an hour.

Total Monthly Costs: \$6.23

### Cost Analysis Conclusions

It appears that commuting by car is the most expensive at \$517.97 per month, bus commuting is next at \$369.50 per month, and bike commuting is the least expensive (and actually “pays” me) at \$6.23.  Now I know that not everyone will value their time the same exact way that I did or count exercise and reading as credits, so I have included a table of the cost as I demonstrated above, without including time and credits, and without considering the credits I gave biking or bus riding.

Cost Analysis
Everything Included Without Time and Credits Without Credits
Bike Commuting \$ 6.23 \$27.67 \$585.76
Bus Commuting \$369.50 \$64 \$1072.60
Car Commuting \$517.97 \$181.77 \$517.97

In the end analysis, bike commuting appears to be the most cost effective mode of transportation given my assumptions and predicted costs. I have certainly left things out, like the difference in lifetime health care costs, but I think that this is a fair and accurate analysis.

Update:  Thanks to all the individuals who left useful and insightful comments.  I have appreciated them and they have helped me think about this topic with more clarity than I was previously able.  I also wanted to thank Free Money Finance for hosting the Carnival of Personal Finance and including me as an editor’s pick.  Apparently I did something useful with an article about commuting costs.

• On 03.02.09 Matt SF said:

Interesting way of looking at this debate. A friend of mine gave up his car last year and he takes the bus, bikes or walks to work everyday depending on the weather. Lost 20 pounds in the process.

I always found gridlock traffic to boost my stress levels… I imagine that’s a non-issue after a 50 minute biking commute.

• On 03.02.09 Steward said:

Hi Matt,

Bike commuting is definitely a good way to de-stress. It is great getting to see the sky at dusk and some parts of the ride can be very peaceful. It is also a great way to wake up in the morning.

However, bike commuting is certainly not without its own stress. There have been a couple times where I have really felt the adrenaline rush because a driver cut me off and I had to dump the bike or I tried to catch a green light only to have to do a sliding stop to not get creamed by cross traffic. These times are extremely rare (happened twice in 7 months of commuting) and I have learned from these instances and made my commute much, much safer.

• On 03.02.09 LAL said:

In your time costs, you forgot that you only earn that if are hourly. If you are salary it doesn’t matter. It’s like trying to value eating out versus cooking. Eating out less time from work. But unless you could be earning, it doesn’t matter.

Second, you’ve forgotten the lost opportunity cost of the car. If it’s \$2k, that could be earning right now 2% in a bank account.

If it’s a more expensive car say \$10k, then it’s a lot more interest you’ve lost. Lost opportunity cost in investments even.

That being said, I ride the bus/carpool to work, but I still keep a car.

• On 03.02.09 Steward said:

Hi LAL,

I did question whether or not to include time as a factor since its valuation can be so difficult. In addition to the issues that you raised, there is also the issue of “free time” being inherently more valuable than “work time.” For example, one coworker of mine says that if he had to put a value on his time away from work it would definitely be worth more than his hourly wage. So I asked him why he was selling himself so cheaply? He said that he could probably be find a job that paid him more but he liked the free time of his current job so much he didn’t think the increased salary would be worth it. The low demands on his time were a benefit that he calculates into his salary.

I think I ended up included time as an element in this cost analysis because without it I would have given a lot of people an excuse to reject the obvious conclusion of my findings out of hand. The would say that a bike isn’t more expensive than a car because I hadn’t factored the cost of time into my calculations. Well, I have factored it in and now those people can’t say that I haven’t.

And you are definitely right on the money about the lost opportunity cost issue as well. I didn’t think of that in my original comparison. Now it gives me an idea: how long will it take for the money that I save by bike commuting to reach a point where I can pay for bike commuting just on the interest of the money that I have saved? 8 years and 10 months with a 2% interest rate and 0% inflation on bike related expenses.

Also, my wife still keeps a car too, but she is a stay at home mom so her mileage is low and need for a car (to carry around children) is a little greater than mine.

• On 03.02.09 thomas said:

I’m pretty sure I would have the cost of your time be constant. You don’t really earn more because it’s something you like.

To the comment about opportunity cost, I don’t think that is right. The car is more of a sunk cost, as I’m working with the assumption you still use your car for other things than commuting.

Also, you didn’t figure in the cost of time savings. You are saving 13 hours a month driving rather than biking. What is the cost of your stress (because biking on roads is extremely stressful).

All in all good post and a nice breakdown on how to think about transportation costs.

• On 03.03.09 Steward said:

Hi Thomas,

The reasoning behind increasing the value of time that you spend doing something you like is that it seems to me like you value that time more than working. It is worth more to me to spending time with my family than it is to spend at work – otherwise why would I spend time with my family when I could be earning money? My answer is that it is worth more to me to be with my family than it is to be earning money. I simply tried to put the value of that into dollars. I don’t think my time valuation is perfect, but it does seem to be useful to me as a way to compare between different uses of time.

With that said, I think you are right in bringing up that there is about 13 hours a month difference in bike commuting and driving. Would I really spend all this time working out? I don’t know if I would. I’d probably spend a lot of it hanging out with the wife and kid, which is an activity that i highly value. So I should probably think about that more and maybe rearrange some numbers depending on what I come up with.

As to LAL’s comment about opportunity costs I think it is right on. The reason is that we only have one car. If I commuted by car we would need two cars. Since we only have one we have saved the money that we had set aside to buy a new car (\$5000) that is earning us interest in the bank.

That is not to say that I never drive to work. Sometime when it is rainy my wife makes me take the car (she says she isn’t going out in the rain with a 3 month old baby, so I can drive). One thing that I notice when I drive now is that I dislike driving much more than I used to. I hate the traffic, especially not going as fast as the speed limit. I don’t have to worry about that in my bike. I can pretty much go as fast as I can the whole ride home, the only thing slowing me down is those pesky stop lights.

What I am trying to say is that for me there is not an added level of stress in riding my bike to work.

Thanks for stopping by.

• On 03.03.09 Anne said:

Over from a carnival. Really interesting post.

I am the 26 year old (not sole, my parents are authorized) driver of a 1996 Toyota Corolla and my insurance costs are far less than that. Have you considered shopping around? I pay State Farm \$197 every six months for pretty conservative coverage for such an old car, and that includes an accident last year when I was at fault.

• On 03.03.09 Steward said:

Hi Ann,

Thanks for stopping by.

I was really negligent in making sure that my insurance only covered the things that I actually needed – so you are right, chances are I was paying too much for insurance. I also never checked to see if just by switching providers if my rate would drop. I was a big auto insurance dummy.

But my sense is that I still wouldn’t be paying a rate as low as yours for a two reasons:

• I suffer from having male organs. Women generally pay less than men for car insurance – which may or may not offset the pay gap that generally exists between men and women. I haven’t crunched the numbers on it so don’t take me to the bank on it.
• I was paying as if I was the sole driver of the vehicle. I don’t know why that matters to insurance companies but it seems like it does from my recent experience in becoming an authorized driver on my wife’s insurance.

I think it is kind of lame that I get charged more for insurance just because I am dude, but I did find a great way to circumvent that issue – bike commuting.

• On 03.15.09 RAJEEV TIPS said:

Great post .. i think it does make whole lot of sense to take carpool or bike where its possible.. for cities like Mumbai where commute is longer,… local train is the best..Thanks for the post ..loved it.

• On 04.16.09 Gail said:

I think that your forgot to factor in one important expense – the cost of time some ones children has to stay late at daycare if their parents don’t make it on time to pick up their kids. It ranges from 1-5 \$ per minute so for your 13 hours per months extra time for biking it would cost 1560 \$ at moderate rate 2\$ per minute. But after 3 delays you would be asked to find another day care arrangement anyways, so the actual cost will be loss of job or overnight daycare.
Also when you slow down cars on the road please think of us – working parents, forced to commute for 2-3 hours a day, that our kids at daycare are waiting for us and we don’t want them to be the last one to be picked up.
By the way, my commute – driving to subway 10-30 min depending on traffic, 6 \$ per parking at subway, 40 min on subway at 110 \$ per monthly pass, and then walk for 10 min.
How do you calculate this?

• On 04.16.09 Steward said:

Hi Gail,

Child care would be a factor for someone that uses it. I currently do not use it and will probably never need to, so that is probably not a cost that I will have to consider – but there are definitely people who will need to do so.

I would calculate your driving/subway/walk as follows:

1. Find a value for your time
2. Calculate the total amount of time that you spend commuting
3. Multiply the value of your time by the amount of time you spend commuting
4. Add all the costs associated with your commute to that total (cost of driving, monthly subway fare)
5. Then if you do something that you value while you walk or ride the subway then subtract that from the total you found in 4

This should give you a pretty good idea how much your commute costs you.

Steward

• On 05.21.09 Ferien Frankreich said:

I certainly the most cheapest way of transportation is the bike. Very economical and effective, you can ride and drive bike in small alleys and there is always a special bike lane that specially reserve for bike riders. Its a good practice to use bike because gives you tree exercise and healthy living.

• On 05.26.09 F said:

Hi Steward,

Over from FMF’s Carnival. Great post! Trickiest part is to account for differences in quality between time spent on bus, bike, or at home. My approach is expressing bus time in leisure time equivalent hours. In other words: how much leisure time would I trade my bus time for?

1h on the bus may be worth, for instance:
- 1h of completely free leisure time, if an activity I’d do anyway at home can just as well be done on the bus
- 30 min, if my productivity is lower on the bus, or it isn’t but I don’t like the noise, or I can’t engage in my favorite activity…
- 0 min (or even less), if my time on the bus is a complete waste (or I’d even pay to make time go faster)

It’s an intuitive way to compare car/bus/bike, and you could, if need be, convert hours of leisure time to dollars.

Hope you like it. Success with the blog!

• On 05.26.09 Steward said:

Hi F,

Thanks for the thoughtful comment! I think I definitely see where you are coming from in comparing “completely free time” with the time that your commute forces you to spend doing an activity, and I think you are definitely on to something. You essentially add a penalty to credits when they are not completely equal with your “completely free time” – I think that this makes a lot of sense.

Concerning how to keep track of all this, I prefer to mark things in terms of dollars because that means I can compare the time I spend commuting one way to other aspects of other commutes. Time costs becomes comparable to the cost of maintenance, gas, insurance, bus fare, and all the other financial considerations of my commute. For example, the cost of time to bike commute is roughly equivalent to the money spent on gas, insurance, maintenance, and the time commuting by car. This comparison is important to me.

But this does leave my way of looking at it subject to objections about how I value time. But by looking just at the amount of time I spend doing something would be more like comparing apples to apples and would avoid this objection. So I will definitely need to think about this some more.

Thanks again.

• On 05.29.09 F said:

Hi Steward,

Just like you, I ultimately want to weigh biking time against car commuting costs, so yes I’ll need to put a \$\$ value on that biking time too.

What I suggested above, is to first convert biking time to REAL leisure time equivalent hours, then multiply by \$16 (the value of 1h of REAL leisure time), and consider the result a credit* that can be subtracted from the total biking time cost. For instance, if biking takes up 2h/day, and I judge I get “1h leisure time” of value out of it, then I can conclude that biking time costs me net \$16.

* this credit is the very same thing as your biking “excercise credit”, though you might end up with a different value (depending on how good your estimates in both cases are).

Hope this cleared it up. Success with the blog!

• On 05.29.09 Steward said:

Hey F,

I think I understood your point. It is like saying that the free time of riding my bike each day is really only 50% as good as completely free time that I would have at home if I drove.

Thinking about this idea just I had this thought, “How would you calculate the value of those two hours?” My thinking right now is that you would need to count it as essentially money neutral (neither counting as a credit or a cost). This is because for ever minute that you would spend bike commuting you are only getting 50% of “free time” from it – so half of it counts as a cost and the other half counts as a credit. But I may not be thinking all that through entirely and its just my off the cuff thought about it.

And I just thought of this, can you put a value on the exercise that bike commuting provides if you wouldn’t have exercised without it? So if I didn’t exercise except if I commute by bike does that someone add even more value to the credit side of the bike commuting equation? I hadn’t thought of that before.

Anyway, thanks for stopping by again and for your thoughtful comment. It sure is fun to think deeply!

• On 05.29.09 F said:

“My thinking right now is that you would need to count it as essentially money neutral”
That seems to be a valid conclusion In practice you’ll just use it to compare 2 commuting options: “OK so my car costs \$\$ more in vehicle costs but biking costs \$\$ more in time (i.e. commuting time minus any credit). Which means the best option is…” Pretty simple if you think about it.

“And I just thought of this, can you put a value on the exercise that bike commuting provides if you wouldn’t have exercised without it?”
That’s personal, as it depends on how much you value exercise. Is it something you feel you should do but never get around to? Would those 2h of biking be ideal or overkill? (If ideal, that’d zero net time costs for a bike, versus 1h for a car.) Or do you consider exercise to be a total waste of time? Torture maybe? Does that answer your question?

• On 06.15.09 Thomas said:

I always go by bike! Precisely a rented bike, so I do not have to maintain it and do not have to worry about thieves. In my opinion that is the cheapest transportation

• On 07.22.09 Z said:

Interesting analysis…but I don’t think you are being fair to attribute all of the fixed costs of car ownership on your daily commute. To make the analysis fair you would need to assume that if you only used a bike or public transportation there would be a cost involved for renting a car for trips longer than your daily commute. Your cost assumption for biking and bus assumes that you would not have a car available for non-commuting needs. The opitionality/convenience of an automobile is understated in your analysis.

• On 07.22.09 Steward said:

I can see where you are coming from. I did not do a good job of communicating this in the body of the article, but this is a comparison between having a second car and bike commuting. As such, there is no need to add rental expenses into the equation because you already own one car and can just use that car when necessary. I ride the bike while my wife drives the car. I mostly bike – that means that I travel to work by bike and also run some errands on the bike as well – but I also drive some as well.

So this analysis is strictly between bike ownership and owning a second car, so in that way I think it is very fair and even handed.

• On 12.23.09 LHD Cars said:

This is certainly a worthwhile exercise to demonstrate the advantages of cycling over the other ways of commuting. Also, as you say, you did not factor in the health benefits that would also come as a result of the exercise on your bike which would make it an even clearer winner.

• On 01.11.10 Jon "Bike Parts King" Carter said:

I completely love the fresh view and perception that you bring to this. I think there are HUGE health benefits to biking as well which, if you are healthy, then are are happy. healthy life=happy life or maybe it is happy wife=happy life??? Thanks for the great research!

• On 01.31.10 Cars said:

@Thomas you can go by bike, but what if it’s raining? I think cars will remain our number 1 travel solution until the teleportation will be available

• On 02.17.10 Candace said:

It all depends on where you live, obviously. People in rural areas with lots of weather could not do the bike commute but if you live in a New York condo, it would make perfect sense.

• On 05.12.10 Richard Eis said:

In reference to being late for nursery pickup, why would you be late when you are not really ever stuck in traffic? Also, because of the reduced speed, you tend towards a more realistic average rather than having a massive difference between good and bad runs.

• On 06.26.10 Tim said:

My gosh it make my brain hurt just thinking about life like that! Looking at life like a payroll accounting software system would! Amazing in depth approach to a topic relevant to all of thanks for sharing your brain with us all.