The Economics of American Mobility

Americans really, really love cars. Specifically, we love high-cost, low-use cars.

In 2018, American drivers purchased 142 billion gallons of gasoline. Which means that, every day, we pump 390,000,000 gallons of fuel into our rides.

At $2.72 per gallon, the 2018 average, Americans spent $386,240,000,000 on gasoline in a single year. At $3.62, the 2012 average, the total cost of gasoline consumption would have exceeded $500 billion. That’s serious cash.

Long-range trucks account for roughly a quarter of overall consumption, but cars are the main event. They generate 59% of all transportation carbon, destroy urban infrastructure, and are reliably expensive to maintain and operate.

A new study suggests that, with the right mix of costs and collective actions, cities can develop sustainable mobility systems. This study focuses on the themes of shared occupancy, electric vehicles, and autonomous transportation. It concludes that cities can decrease vehicle emissions by ninety-five percent by 2050.

There is an economic upside to placing cars within a broader mobility framework. As the numbers of vehicles decrease, large parts of a city can be repurposed. Imagine pop-up shops, green spaces, or more housing instead of parked cars on entire blocks in New York City. Imagine quick, clean commutes that give back thousands of hours of productive time per year.

What’s interesting about this framework is its distinctiveness from today’s most popular transportation solutions. Most Ubers are single-rider, gasoline-powered, and human-operated. The transportation giant may believe that "good things happen when people can move," but it has not transformed vehicle occupancy, fleet electrification, or operator risks and costs.

Lyft, Uber’s main competitor, is more explicit about its long term goal. It wants to “redesign our cities around people, not cars.” To do so, it must convince self-interested people that using Lyft is a better economic decision than spending $1 trillion per year on owning, fueling, and maintaining private vehicles.

Urban mobility brings together some strange bedfellows. Civil rights organizations have taken up the cause. So have Google, Mastercard, and JP Morgan. For different reasons, each focuses on the long-term trend that global energy consumption is growing and changing.

To see where we go from here, they ought to rely on the economics of urban mobility as both a map and a compass.