Updating benefit calculations and drive alone cost per mile

[Stan Suchan]

Which option from the table below do you think works best for our achievements calculation update?

At the last regional administrator's meeting, we decided to update the factors the system uses to calculate benefits like gallons of fuel saved, $ saved, etc. These factors affect the results that appear on dashboards and in reports. They were last comprehensively updated in 2011. During the discussion it was noted that people have very different perspectives, sometimes quite passionate, on this topic. To address these differences, we provide a link to a fact sheet that explains the factors. This allows people to reinterpret them to better align wtih their beliefs.

During the meeting much of the discussion foused on one factor: drive-alone cost per mile. During this discussion we confirmed that we would use 2013 AAA Cost of Driving medium sedan data for this purpose. The group wanted to consider a few options: 10,000 annual miles per vehicle vs. 15,000 annual miles per vehicle and using a factor that omits sunk costs like insurance, taxes, depreciation, etc. Below you'll find a table that presents these options. For reference, we are currently using a factor that aligns with option B in the table below. In 2011, this totalled $0.3383 per mile.

Please note that updates will be prospective; they will only affect future achievement calculations and totals.

   

 

 

 

 

 

 

 

 

[Tracy Ellis]

Hi Stan, my vote is for .21 per mile - to include only operational costs.  We can always put a disclaimer that says something to the effect of "Savings is calculated for fuel, tires, and maintenance only. If you add in the cost of financing, depreciation, insurance etc., your savings would be greater... or something to that effect.

[Noel Brady]

I vote for A, too, because I think most people use the data to see the benefits of not driving to work, rather than not owning a car. That point makes me wonder why none of the options factors parking, which, depending on where you work, can be a huge factor. Is there's a way to include parking in the calculation for people who work in urban centers?

Noel

[Stan Suchan]

In 2011 we considered including a factor for parking, but struggled with the vast differences in perspectives and rates across the three states. In much of the region - rural and suburban communities, park and rides, residences - parking is free. In urban areas, parking is low cost in some areas and high cost in others. 

[AnneBruskland]

At this time no. There is not a mechanism to differentiate by area or specific circumstances. The system provides us an opportunity to include one factor for each mode that is an indicator of savings.

[Julie Lloyd]

Like Tracy Ellis and Noel Brady, I would also vote for .21 per mile - to include only operational costs with a disclaimer that other associated costs have not been included. In addition to a basic cost, is there a way to include factoring those other items in if it pertains to the individuals commute, like parking? Can a more individualized environment be created?

[Stan Suchan]

I am confident that the idea to support a more individualized environment for this purpose is listed in the the updates log. It's an idea that has been discussed previously. I am not aware that the idea has a scope, cost estimate or timeline, mostly because those are developed only when a financial sponsor identifies the idea as a priority and is serious about purchasing the upgrade. 

The level of complexity would vary depending upon the scope. For example, I suspect it'd be less costly and time consuming to allow individuals to customize their rates while maintaining standardized rates for network groups. However, that's conceptually still a big increase in system data -- two numbers for every factor for each individual: one individualized and one in alignment with standards for groups. If someone wanted to sponsor this type of idea the next step would be a conversation with Anne and Amol to assess feasiblity.  

[Janice Helmann]

I would suggest that you consider how this cost per mile plays out for an average commute. In the Puget Sound region the average commute is 13 miles. If you use .21 per mile that is $2.73 per way. King County Metro's peak 2 zone fair is $3. Do we want to show drive alone commuting as a cheaper option than riding a bus?

[Leesa Monroe]

Janice - great point about average commute mileage. Jefferson County commuter routes travel out of our county, 30+ miles one way, so riding the bus is a significant cost savings. 

I like B or C, because the included items are costs all drivers have.  I did not choose D or E because financing does not apply to everyone (i.e. some drivers may not have a car loan)

[Tarah Campi]

I also vote for A and agree a disclaimer about what is being excluded makes sense.

[AnneBruskland]

We posed this question to staff here at King County.  I want to share feedback we receive as it comes in.  Below is a response I received from one of our fleet experts who is very familiar with vehicle costs.  I think this is important in context, given there are a number of costs not factored into the current model that might argue we may be actually understating, not overstating the savings using our current factor. 

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I believe their cost per mile for the fuel, maintenance and tires ($0.21 a mile) is based on a BRAND NEW CAR. 

Any car over 5 years will get tuneups, steering and suspension part replacements, more brakes system replacements and other regular maintenance services due by OEM standards.

Based on 10K miles a year with a NEW CAR ($0.21 /mile X 50K miles = $10,500.00):

You would replace tires (AVG Cost =$400.00 includes tires, wheel sensors, valve stems, weights and labor to remove and install)

You would spend $8750.00 in fuel (AVG Cost for a 20 MPG vehicle going 50,000 miles  at a cost of $3.50 a gallon for gas)

You would spend $1,750.00 in maintenance (AVG Cost for oil changes, 1 battery replacement, brakes replaced and 1 transmission service)

               $   400.00 Tires

               $8,750.00 Fuel  

               $1,750.00 Maintenance.

If you use the $0.21 cost per mile than you need to stipulate it is with a NEW CAR only.

Using only a new car for this pricing should have some depreciation of the vehicle built into the cost of the commute mile – to be REALISTIC in the actual cost to drive alone.

Any other car 5 years or older will more than likely have a lower MPG using more  fuel and have a much higher maintenance cost (especially if the vehicle is over 7 years or 75K miles) – BUT there is no depreciation of the vehicle over 5 years of age either.

Insurance costs should be built into this since it is covered on drive alone or commuting (someone is paying it).  I would put the AVG Cost at $50.00 a month or $600.00 a year.

They also have excluded tolling costs – this is a big factor in driving alone in our area at a cost of $1,866.80 a year.

[Caryn Walline]

My vote would be for B or C.  I think it is important to include insurance in the number we use since many commuters can get lower insurance rates if they don't drive alone to work.  That is a significant expense that I don't think many people factor in to the cost of driving.

[Tarah Campi]

Would we be able to use a rate that includes fuel, maintenance, tires and depreciation?