Is it cheaper when gas is cheaper or not to rely on a car to begin with?
Yesterday's New York Times has a piece, "Gas, Still Not as Cheap as It Used to Be," about how much of the income drop over the past decades has been associated with a rise in energy prices and makes the point that cutting gas prices will increase disposable income. From the article:
One of the surest ways to end the great wage slowdown would be for the United States to make sure it’s entering a new era of cheap energy. “It’s the proverbial tax cut,” says Daniel Yergin, vice chairman of the research firm IHS and author of a Pulitzer Prize-winning history of oil. If energy costs remain at current levels, it would put $180 billion into Americans’ pockets this year, according to Moody’s Analytics, equal to 1.2 percent of income and a higher share for lower-income households.
That’s why taking virtually every step to push oil costs even lower — “drill, baby, drill,” as the phrase goes — would make a lot of sense, so long as oil use did not have harmful side effects.
The most obvious way to hold down the price of oil is to increase its supply.Of course, another obvious way to hold down the price of oil is to significantly reduce demand. In the US, approximately 70% of oil is used for transportation.
But obviously, for us city dwellers, not relying on a car for mobility eliminates $5,000 or more of total spending on transportation--while the average cost per year for a car is $8,876 in 2014 according to the American Automobile Association, we still have to pay for transit, our bikes, using car shares and car rentals, etc. (Note that the cost to operate a car will drop significantly in 2015, by $1,000 or more, depending on how long gasoline prices remain lower.)
And in DC especially, subway transportation is expensive compared to other jurisdictions (e.g., the cost of a monthly transit pass in NYC or San Francisco is less than half the cost of a subway pass here, which doesn't include bus as do the other passes).
In the interim, with falling gas prices, the cost advantage over the automobile-dependent that is enjoyed by city dwellers owning no or fewer cars (but paying more, generally, for housing) is dissipating a bit, at least in the short and intermediate run.