About a week ago I posted about a study in the USA which looked at how much cyclists in America save every year. They concluded that cyclists in America are saving $4.6 billion per year.
Essentially, they just looked at how far cyclists in America ride every year and, also, how much it costs to cycle a kilometer. They then worked out how much it would cost to drive the equivalent number of kilometers and subtracted the one number (the cost of cycling) from the other.
Some commenters on this blog criticized that approach because they thought it was simplistic and overlooked the massive benefits to the wider economy of cycling.
They’re probably right but I still thought it would be kind of interesting to try and work out how much NZ cyclists save.
Now, according to the Ministry of Transport (PDF) New Zealanders cycle 350 million kilometers per year.
But it would be somewhat deceptive to count all of those kilometers cycled as money saved because lots of cycling in New Zealand is for recreational or fitness purposes.
It’s probably a bit unlikely that somebody who currently cycles 200 kilometres a week to keep fit would choose to drive for 200 kilometers if they weren’t cycling – instead they would probably run or whatever.
Because the Household Travel Survey mainly looks at the end destination of each trip it gets a little confusing and difficult to work out exactly what proportion of those 350 million kilometers are being made to travel somewhere, rather than for fitness. This is the table that Ministry of Transport provides.
 
So, if you exclude all the trips home (on the basis that they are probably not relevant in trying to work out what purpose people are traveling for) and then you add together all the trips that were made by both children and adults for recreational purposes and divide by the total number of trips you conclude that about 54% of all kilometers cycled in New Zealand are for recreation. That leaves 46% cycled to actually get somewhere.
That’s a pretty rough calculation, but it sounds about right to me (feel free to contribute if you know of a study which actually worked this out more accurately).
So, New Zealand cyclists ride about 161 million kilometers for transport purposes each year.
How much would it cost them to drive those kilometers instead?
For the cost of driving, the IRD estimates a cost per kilometer of $0.74.
So to drive 161 million kilometers would cost $122.3 million.
For the cost of cycling, well that is a little more difficult to estimate because I have not seen such a figure for New Zealand (again, feel free to comment if you have seen one anywhere).
The closest you might get would be the Household Expenditure Survey and that does not break down the cost of bike versus car repairs.
Although, you may be interested (or not) to know that the average New Zealander spends $0.70 on bike purchase per week.
The study from America estimated the cost of cycling at 10 cents a mile. If you convert that to New Zealand dollars and miles to kilometers, that gives a total cost of cycling of $13.08 million.
So, overall New Zealand cyclists are probably saving about $109 million per year.
Obviously, of course, this conclusion is based on so many assumptions that it’s pretty likely to be inaccurate. All we can really say with confidence is that New Zealand cyclists are saving a lot of money which, let’s face it, we pretty much knew already. Alas! An hour of my life wasted, again.
It would be nice if there was a more accurate study somewhere which had worked this out – let me know if you have heard of one.
Of course, the next question is how much money do New Zealand cyclists save the economy overall?
Just thinking about trying to work this out and/or trudging through hundreds of pages of NZTA reports makes me weary. So if anybody would like to do a guest post on this (hint, hint) they are very welcome.
I think you’re seriously overestimating the recreation component of cycling by not including the “home” trips. Most of the “utility” trips to work, education, shops, etc will be followed by a trip home after that (not all, because they may have started from a different origin, or be going on to somewhere else afterwards). Meanwhile, many recreational trips will be essentially “circular” (e.g. from home to home without a specific destination in between), and hence won’t have a home trip leg.
So we have 99m km of utility trips/yr recorded by the NZ Travel Survey and 131m km of “home” trips/yr. I think it’s quite reasonable to assume that at least 90m km of those “home” trips are returning from a utility trip purpose. Thus, ~55% of all cycling km are for utility purposes.
You could probably also argue that some of the recreational km also save you $ if the alternative is (say) to DRIVE to a gym and sit on a stationary bike instead…
As for bike running costs, there was an article from CAN a few years back that estimated the figure at 4c/km. That was for someone who travelled quite a few kms by bike each year, so that value might be more like 5-10c/km for most average bikers. Another project that took a stab at a figure was NZTA research report 393 “Relative costs and benefits of modal transport solutions”, which comes up with a range of 4c-33c/km by my calcs (see Appendix B).
The NZTA’s “Economic Evaluation Manual”, section 8.7, says :A composite benefit of $1.45 per cyclist per kilometre of new facility may be used for cyclists using the facility.” This means all cyclists whether recreational or not. The benefits are mostly health related and have been obtained from NZTA’s Research Report #359 “Valuing the health benefits of active transport modes”. That study does not differentiate between recreational and transport-related cycling, but does place a higher benefit on previously sedentary cyclists (double actually, by applying the “rule of half” to existing cyclists and new cyclists who were previously physically active). On this basis, with 350 million kilometres being cycled each year, the benefits of cycling are more than half a $billion per annum. With 70 times more people than NZ, the cycling benefits in the US are surely a lot more than only $US4.6 billion per annum.
I imagine the IRD figure of $0.74 cents to drive a km would like a “wonderful” economic stimulus and tax gathering machine by the govt…. The blinkered approach to RONs is surely from the same short sighted thinking
I own a car, so the only money cycling saves me is the cost of petrol (it depreciates in age anyway). You can work out the cost of cycling from adding up the amounts you spend for a year on your bike, if you like.
the IRD rate uses an average depreciation on an average vehicle, maintenance etc. The AA does similar figures that are higher, but they compare the 3year depreciation on a new vehicle. So again, it doesn’t really fit everyone.
In real cash terms, the thing that fills up my wallet, it’s gas money that gets saved. For a 1500cc car doing 7L per 100km at $2 per L, that is 14cents per KM saved in fuel costs alone.
It is too complex to average all the costs of car and cycle owenership out (differnet cars, some people have no car, expensive bike costs vs cheap bike costs, car vs cycle infrastructure and their wear and tear on the infrastructure, health costs, social costs etc) to get a hypothetical comparison, though many people try, and I find it interesting, often their assumptions are skewed.
So I just go with the fuel cost. I saved several hundred bucks last year!
I should add, I saved hundreds in gas money, but using a bike cost as much or more. So more or less doing it for fun, fitness, and less pollution
hmmm, whereas cycling has just saved me heaps overall over the last 10 years – literally it would be thousands of dollars. But I don’t own a car and have a pretty cheap bike so perhaps that is why.
Definately Lucy, my experience is not necessarily the norm. My bike costs include making my bike an all weather commuter, so adding puncture tyres, pannier rack and bag, mudguards, a service, a chain and cassette after 3000km eroded the savings within the first year, but in future they will hopefully be recouped. I think I worked it would pay for itself in 4 years out of fuel savings alone. Given it is the only exersise I get that saves other money I would spend on sports or a gym (yuck) as well.
Not having a car because you ride or use PT everywhere would save anyone massively (sunk costs of insurance, WOF, rego are thousands for a start, then depreciation, maintenance, fuel for actually using). Good on you!
Yeah, I think maybe in the first year you just break even on the bike but by the 5th year you have made massive savings. I feel like a bit of a fraud because even though I don’t own a car I do borrow somebody else’s car a lot…like maybe once a week. I pay for their WOF and petrol, but it is definitely not like the full cost of my own vehicle would be.