Would You Pay $876 to Cut 6 Minutes Off Your Commute?

There were some mighty big numbers in the annual Urban Mobility Scorecard that the Texas A&M Transportation Institute and data company Inrix released Wednesday. Twin Cities residents, the study found, spent an average of 47 hours in 2014 stuck in rush hour congestion. That put us at 23rd among the 101 ranked metros. Washington, D.C., led with 82 hours. Los Angeles was just behind with 80 hours, and San Francisco followed up with 78 hours.

These delays have a cost, according to the study’s authors. For Minneapolis-St. Paul, they estimate that congestion cost the Minnesota economy $2.2 billion in 2014.

But it’s worth digging into the formulas a bit before throwing that figure around. The economic cost is based on the assumption that each hour in traffic is  worth $17.67 per person and $94.04 per commercial truck in lost economic activity, plus the cost of additional fuel burned.

The problem is that people don’t sit in congestion for hours at a time; they’re in congestion for a handful of minutes per commute in all but the worst cities. In Minneapolis, drivers are in congestion for a little over 12½ minutes per day, or a little over six minutes per rush hour trip.

Are Time and Money Commensurate?

In circumstances like these, money isn’t exactly equal to time because of the different ways they can be spent. Small amounts of money may not be worth much alone, but they can be collected over time and spent later on some larger purchase.

Small amounts of time aren’t worth much either. But unlike money, they can’t be collected over time and invested into something more meaningful. A teacher won’t be able to teach another lesson if the commute is shortened by a few minutes. A reporter won’t be able to write another article. A plumber won’t be able to fix another toilet.

The MnPass Example

Everyday people intuitively know money and time aren’t the same, and you can see this by looking at MnPass. The toll lanes save the average I-35W driver five to 10 minutes and have an average peak cost of between $1 and $4. The midpoint of that cost estimate works out to $892 per year, assuming a MnPass round trip every workday.

Meanwhile, the Urban Mobility Scorecard estimates congestion costs the average Twin Cities commuter about $830 a year through $17.67 per hour a person’s time is worth. It calculates that the average driver here burns about 18 more gallons of gas a year because of congestion, which works out to about $46.80 per year using the approximately $2.60 average at the moment. That total comes to $876. The cost and time savings aren’t exactly equal, but they’re close enough we effectively have a real-world experiment.

Drivers that have access to MnPass lanes can choose to avoid the congestion at approximately the same price as the study claims congestion costs them. If the study’s totals are accurate, we should see something close to an even split. Half the people making below the $17.67 average will decide that their money is worth more than their time and opt for the longer commute. The half making more than the $17.67 average will decide that their time is more valuable than the money they spend.

But that’s not what we see at all. In 2013, an average of 1,223 single occupants drove I-35W’sMnPass between 6 a.m. and 9 a.m. using a transponder (that is, they weren’t using the lanes illegally or for free as part of a car pool or bus ride). By contrast, I-35W north saw from 2,000 to 6,000+ vehicles each hour during the same period at just one point (north of the Minnesota River Bridge in Bloomington). People clearly are valuing the cost of congestion less than the study’s authors.

We see this same phenomenon anecdotally where states have been able to put up full-fledged toll roads. Numerous drivers are willing to trade time for money by taking side roads.

The True Cost of Congestion?

It’s not unusual for something to wind up costing less than the official “value.” After all, a product or service is only worth what people are willing to pay for it — as my dad reminded me whenever I was tempted by some collectible fad. With traffic costs, people simply aren’t willing to pay to avoid congestion to the extent that the authors predict.

This is not to say congestion is without cost. As with any annoyance, there’s a point where congestion becomes so great I’ll gladly pay to avoid it. There’s also a price point so cheap that it’s no longer onerous to pay. That’s why our discussions about transportation should focus more on finding the right balance between cost and convenience. If we focus only on convenience (or even only on cost), we’ll continue to have a distorted decision-making process.

At the top of this post are figures from the Urban Mobility Scorecard. I’ve taken the report’s annual time spent in congestion and converted it to daily and per trip times, based on the OECD’s estimate for the average number of hours worked per year in 2014.

How much would you pay to halve the amount of time you spend in congestion? How much would you pay to erase it entirely?


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28 Responses to Would You Pay $876 to Cut 6 Minutes Off Your Commute?

  1. mplsjaromir August 27, 2015 at 9:16 am #

    Never cite the Texas Transportation Institute. They do not use consistent data gathering processes nor do they allow peer reviews of their work.

    A worthless place to get info.

    • James Warden
      James Warden August 27, 2015 at 9:22 am #

      Unfortunately, AP, Fortune and others are reporting their data as if it’s gospel. That’s why I wanted to show how ridiculous the conclusions are even if we assume their congestion totals are correct.

      • Wayne August 27, 2015 at 10:04 am #

        This is a widespread problem in the media these days. They grab some catchy headline off a ‘study’ and don’t have anyone on staff literate in the topic so they don’t vet the data or the source. It’s how butter or chocolate is constantly either good for your or will kill you in five minutes. Science literacy is dismal in this country and the media reflects that lack of understanding pretty well.

  2. Monte Castleman
    Monte Castleman August 27, 2015 at 9:27 am #

    There’s also the fact that you can’t just decide you want to pay a toll. You have to rent a transponder, which thanks to Minnesota going with an obscure Israeli company instead of what even back then was obviously going to be the national standard can be used in no other state. They even had a shortage earlier this year where everyone that still wanted one couldn’t get one.

    • Alex Cecchini
      Alex Cecchini August 27, 2015 at 10:15 am #

      On an individual day, this is a barrier to those who want to save some time and are willing to pay since they can’t just hop in the lane and pay a toll with cash (though it doesn’t stop plenty of people from trying anyway).

      But in the long-run, those who want transponders can get them. Shortages are a very recent problem in the MnPass story, and yes a more standardized technology should have been used. But that doesn’t really change the narrative of James’ post.

      • Rosa August 29, 2015 at 12:52 pm #

        having it not be accessible to casual users is a real issue in figuring out what people would pay, though – it’s rare enough for me to be on the interstate during rush hour that I actually have no idea how you get a MNpass, so even though I have been tempted to use the pay lanes a few times, I never have.

        I’ll gladly pay the difference between regular and express bus service, though, any day I have that much change on me and it happens to work.

    • James Warden
      James Warden August 27, 2015 at 10:24 am #

      Granted, those are difficulties. But I’m curious how much you would actually be willing to pay to save six minutes every single work day. Like I said, there is some dollar figure I’d probably be able to make the jump myself. $10 a month sounds about right, but I might be willing to go up to $15 under the right conditions — or between $120 and $180 a year. I could also see occasionally spending much more than the midpoint — for example, if I were running late for a crucial meeting or had to get to an important after-work event. But those would be occasional splurges. So whether we’re talking regular driving or emergency driving, I just don’t think there would be a time when I could justify anything close to the study’s estimate. I’m sure there are people are out there who are willing to spend that, but my guess is most make substantially more than the $17.60 an hour that the study estimates.

      • Monte Castleman
        Monte Castleman August 27, 2015 at 10:38 am #

        Well, it’s been so long since I’ve really experienced much congestion commuting. Now I telecommute and before that I reverse commuted to Eagan. But for five years I worked nights in Chaska and had the pleasure of driving MN 5 and I-494 every morning before they built 212 and added lanes to I-494. I’d say $876 a year would be about right.

  3. Lindsey Wallace August 27, 2015 at 10:02 am #

    Thankfully I almost never experience traffic congestion. I wouldn’t be able to tolerate the time or monetary costs. Thank goodness for bikes.

    • Adam Miller
      Adam Miller August 27, 2015 at 10:27 am #

      Why do people still live in the suburbs (unless they also work there)?

      • Monte Castleman
        Monte Castleman August 27, 2015 at 11:05 am #

        Just a few reasons-

        *lower crime
        *better schools
        *not enough room for everyone in the metro to have a single family house in the city (or any kind of housing unless there’s a massive conversion of single family houses to stack&packs)
        *easy to drive around an park
        *more space for a given dollar amount.
        *closer to your cabin if you’re in the northern suburbs.

        Congestion is a worthwhile trade-off in exchange for these things. And now you can even buy your way into the Lexus Lanes if you value time over money.

        • Adam Miller
          Adam Miller August 27, 2015 at 11:12 am #

          Some of those things are mythical (crime, to some degree schools, cheaper). Others will change as city demographics change (schools). Others are things that people should see as bad (easy to drive and park) or at least not as good as not having to drive everywhere.

          But yes, there is not space in the city for everyone to have a single family home. The question was not meant to be taken literally.

          • Monte Castleman
            Monte Castleman August 27, 2015 at 11:15 am #

            What’s the crime rate in the city as opposed to the suburbs?

            • Adam Miller
              Adam Miller August 27, 2015 at 11:18 am #

              Which neighborhoods? Which crimes? Is enforcement evenly applied?

              As the answer to the last one is most definitely, “not even remotely” there’s not a whole lot of sense in looking at numbers, but if you want to do so, go for it. They are probably not as different as most people think, though.

              • Wayne August 27, 2015 at 11:55 am #

                drug-related crime in the burbs is way up! Thanks meth- and opioid-addicted teens! now it’s a public health issue because it’s suburban kids getting hooked and not poors in the inner city–I love the hypocrisy on display!

            • Janne Flisrand
              Janne August 28, 2015 at 1:04 pm #

              Alex offered these numbers, Monte, a while ago.

              http://streets.mn/2015/04/24/safety-means-more-than-crime-rates/

              • Monte Castleman
                Monte Castleman August 28, 2015 at 1:29 pm #

                Those number though are only for deaths and injuries due to crime, not all crime victims.

                The only time my parents and I have been crime victims were in Minneapolis (motorcycle stolen, it’s what made them decide to leave the city forever). I’ve parked my car on the street in front of my house forever (psst- don’t tell the city), and even quite frequently forgot to lock it, but the only time it was broken into ever was at Lake Nokomis. I know anecdotes don’t make statistics, but the perception in the suburbs is there.

  4. Monte Castleman
    Monte Castleman August 27, 2015 at 10:53 am #

    As an extreme example, there’s effectively a $73.43 toll if you want to drive a rental car to the Florida Keys via the toll roads for the week, as Miami toll roads have stopped accepting cash so you need to accept the rental car companies “Toll by Plate” program. Worth it to avoid traffic on Miami surface streets? I did it when it was only $45.99 and I used more toll roads than just to the Keys, no way I’d do so no.

  5. Matt Steele
    Matt Steele August 27, 2015 at 11:45 am #

    Great article James. Reminds me of some of the links Alex Cecchini had in this article http://streets.mn/2014/11/20/re-framing-the-regional-transportation-debate/ noting how worthless Texas Transportation Institute and UMR data is.

  6. Walker Angell
    Walker Angell August 27, 2015 at 4:42 pm #

    I’ve been mulling on this a bit since first reading it this morning. I think for me it’d be a log curve. I’d likely not pay anything to save 1 or 2 minutes. I’d pay a little to save 5. A bit more per minute to save 10, 15, etc.

    There’s a question of reliability in there though as well. Do I know how much time I’ll spend in congestion? How much time I’ll save using the toll? How much risk am I taking that I’ll waste money if the toll route isn’t much faster? How much risk that congestion will be much worse and I’ll save a gob of time making the toll a real bargain?

    Looking to the future, will autonomous cars make a big difference? In Europe I’ll sometimes take a train even if it will take longer than driving since I know that I’ll be able to be productive on the train so the time isn’t wasted. Similarly, a flight has to be considerably shorter, by at least 2 or 3 hours for me to fly rather than take the train for the same reason — trains don’t have as much wasted time standing in lines. And, what time you do have with planes is in a bunch of little chunks between interruptions to stand in a line or some other thing — five chunks of 6 minutes is not nearly as useful as one chunk of 30 minutes.

    Great post.

    • Monte Castleman
      Monte Castleman August 27, 2015 at 5:59 pm #

      I’m writing an article on the subject now, but my prediction is VMT is going to explode with the combination of self-driving cars and electric cars for a number of reasons, which will negate some of the congestion reduction of being autonomous. Right now for a number of different reasons we’re simply not building any affordable single family houses like in decades past, and eventually that will drive up the price of existing houses in the metro to the point only the rich can afford them.

      Wisconsin or Stearns county really isn’t that attractive option for a lot of people because the commutes involved. But what if you could do productive work (or play video games) during the commute time, combined with how much more houses closer in to the metro will cost in the decades to come?

      • Adam Froehlig
        Adam Froehlig August 28, 2015 at 7:05 am #

        I don’t think it’ll explode. It’ll jump up, sure, but probably not as much as you’d think. For starters, long commutes where “productive work” can be done will still be geared primarily to those without children, as those long commutes would seriously cut into family time for those with children. So you’ll still see some sort of upper-end limitation on an acceptable commute time….just a bit more diffuse than today.

        • Monte Castleman
          Monte Castleman August 28, 2015 at 7:55 am #

          Or else parents will choose schools near their workplace so children can ride with them. But today it does seem to be primarily childless couples that are choosing longer commutes so they can get more space / cheaper housing in trade. My aunt and uncle originally lived off Broadway, but moved out to North Branch in several stages and still work downtown (they ride the bus so they can talk on the phone, work on a laptop, etc). My stepsister and her husband live in Prior Lake and he works in Minnetonka (she at least works in the southern suburbs).

          There are other factors of course for VMT. If car storage is moved away from downtown, that’s going to add mileage once the owners get dropped off. Maybe I’m too tired to go out and decided to cook some ramen, but what if I could send my car out alone to pick up some Taco Bell?

          Even if we decide to double the driving “user fee” so users pay the fuil cost of roads, electric car driving is going to be cheaper. Even if electric cars never get as good as gasoline cars are now, it would be easier to use an electric car for ordinary trips and rent a gasoline car for road trips. If 95% of the driving gets done by electric cars, the other 5% could be domestically made ethanol.

          • Walker Angell
            Walker Angell August 28, 2015 at 11:11 am #

            I think that by 2025 or 2030 there will be very few gasoline cars being sold. If any. Just from announcements so far we know that there will be four times as many valid (IE, non compliance car) electric car models available in 2017 as there are today. Cross country trips by electric are already becoming commonplace and the infrastructure is still in its infancy. I’d bet that within 3 or 4 years we’ll begin to see a very noticeable decrease in gas stations as people drive less and what cars they drive either being more fuel efficient or increasingly electric. It’ll be very similar to the demise of vide rental stores as online became a viable and better option.

            That said, electric and autonomous cars will not be a panacea (post coming in a few weeks). They’ll still require a lot of space, they’ll still encourage obesity and inactive lifestyles, they’ll still be slowed by bicycle riders going 11 mph in front of them (unless we build better bicycle infrastructure), and they’ll still use a lot of energy and create a lot of pollution (both in manufacturing and power generation).

            • Monte Castleman
              Monte Castleman August 28, 2015 at 1:34 pm #

              In 10 years will battery technology be as good as the Tesla and as cheap as the Leaf. That’s the big question (and IMHO what would be required for acceptance of electric cars).

              Maybe we can publish our posts the same week…

              • Bill Lindeke
                Bill Lindeke August 28, 2015 at 2:52 pm #

                That would be cool. If you need help working that out, feel free to email me!

  7. Walker Angell
    Walker Angell August 28, 2015 at 12:25 pm #

    Mulling on it some more… Occasionally I’m in a very relaxed mood and sitting in congestion doesn’t bother me very much. That’s only occasionally though. If I think about the psychological impact a bit and how the increased frustration might affect me for some time after the congestion then I’d likely be more willing to pay more to avoid the congestion. There’s also a few pennies of extra fuel burned that offset the costs of paying to avoid congestion. In the end, if I think about it, it’s more than just the time value of money.

  8. Keith Morris August 29, 2015 at 5:02 pm #

    What this proves, if anything, is that taking away extra lanes for cars and giving them to bikes has negligible negative effects on time spent driving. My hometown of Columbus has virtually no bike lanes, is full of stroads, and largely embraces suburban development, yet they still spend 41 hours per year in traffic. That´s a rather paltry 6 hour per year difference vs our 47. Not to mention our metro population is roughly twice that of Columbus.