Dollars and Sense: The Finances of Bike Commuting

I work in finance so, naturally, I am interested in the financial aspect of bike+ferry commuting.  The main reasons I took up cycling were non-pecuniary, such as the health benefits of cycling and the frustration of driving.  Nevertheless, it can be interesting and informative to go through a thorough analysis of all the financial costs of each mode of transport.  This post compares all the costs of commuting between Riverdale and Jersey City either by car or by bike and ferry.  Though originally published in May 2013, I’ve updated this post over time as I’ve learned more about bike commuting, even though I no longer live in Riverdale.

A quick and narrow analysis of the marginal costs of a single trip reveals that taking the bike and the ferry is not much cheaper than driving.  A one-way bike+ferry ticket costs $9 from Midtown/39th St and $7 from World Financial Center.  Alternatively, I could take the PATH train for just $1.70/ride, with no additional charge for bikes.  However, bikes are not allowed during peak rush hour, so this is really only an option for about 5% of trips.  I probably take the Midtown ferry about 60% of the time, so I average about $16 per day.  On the car side, the E-Z Pass tolls on my route add up to $15.13.  Add in gas at $3.50/gallon (filled up in NJ, of course), figuring that my typical gas consumption is 20 MPG at best for this stop-and-go approximately 38 mile round trip, so at least $6.65, for a total of about $22 for a round trip commute.  So it seems I save only $6 a day with my bike+ferry commute.  Of course, I was very disappointed by such a small savings, but these most visible costs are just the start of the story.

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View from behind the window in the Midtown ferry, with my bike secured to the railing.

Both bikes and cars require maintenance.  As a long-time car driver, I was quite used to the costs of car maintenance.  Changing oil every 3000 miles (equivalent to 79 commute trips) costs about $35, plus every 15000 miles one needs to replace the air filter and various fluids as part of a more complete service packaging costing perhaps $200.  Together these add up to about $1 per commute.  Tires and brakes, while not needing to be replaced all that often, do tend to cost a lot.  I recently bought new tires and brakes for about $2500 for a 5-year old car.  Granted, many of the miles put on the car were not work-related, but I do tend to drive much less on weekends, so let’s say tires and brakes add $1.50/commute.  I probably tend to get my car washed far less than recommended, but still this expense of roughly $20 every 3-6 months (of driving, a parked car doesn’t get nearly as dirty) adds $0.20/day.  Car maintenance grand total: $2.70/day.

I was not used to the expenses of bicycle maintenance, but it turns out there are quite a few.  Many of the expenses, such as tires and brakes, are similar to car expenses (but much cheaper). Bicycle tires need to be replaced about yearly at the rate of my riding, and cost $100, so $0.40/day.  Tubes also tend to get worn and develop leaks.  I probably spend about $5 on tubes every couple months or so, or $0.10/day. The chain should ideally be replaced every six months of regular riding.  However, since I didn’t do this, I eventually needed to replace both the chain and rear cassette.  The first time around this was a bit expensive because of all the tools I bought (though this was still cheaper than taking it to a bike shop), but I figure going forward this will cost me another $0.40/day.  The rest of the stuff, like brakes, cables, chain cleaner, bar tape, lube, super glue are all quite cheap, about another $0.40/day altogether.  There’s also the occasional damaged equipment, such as a rear derailleur I broke in an accident, which fortunately only cost me about $30, so add another $0.20/day.

The total cost of bike maintenance, about $1.50/day, implies I’ve essentially bought an entirely new bike after just over 2 1/2 years.  If it wasn’t for the fact that the bike would be unrideable pretty quickly without much of this maintenance, I’d say screw it and just buy a new bike.  In fact, when you look at it this way, is it any wonder the vast majority of bikes out there have worn tires and brakes, frayed cables, squeaky/creaky chains, and tattered bar tape?

Also, it turns out that cycling apparel is both (a) expensive and (b) wears out pretty quickly given the amount of abuse I put it through.  Although most of my cycling apparel was bought new when I started out, with new winter apparel purchased at the start of the winter season, it’s already looking like I’ll have to replace signification portions of the wardrobe regularly, at a cost of perhaps $300/year, or $1.20/day.  Bike maintenance grand total: $2.70/day.  Note that much of this comes from clothing and not the actual bike.

Bummer!  Maintaining a $35,000 car costs about as much as maintaining a $1,000 bike!  Surely, this can’t be the end of the story.  All the analysis thus far has looked only at purely marginal costs, which really are all that matter if one is deciding on a daily basis whether to choose one commuting option over the other, but if one takes a longer view, then certain other fixed and semi-fixed costs come into play.

The most significant semi-fixed cost is parking.  Since parking at my firm must be paid for on a quarterly basis, one could presumably save a significant amount of money by committing to not commute by car for one entire quarter.  I’ve been reluctant to take this step quite yet, but I think I will soon, and when I do, I will immediately realize an additional $275 per month of benefits.  To be fair, though, $260 of this is tax-deductible, so net costs are around $7.50/day.

Another significant semi-fixed cost is registration, insurance, and inspection for a second car used exclusively for commuting to work.  In NY City, registration costs about $130 every two years, or $0.25/work day.  My insurance costs me about $500 every six months, or $4/work day.  Inspections cost $40/year, or $0.16/work day.  We’ve already cut down from two cars to one, so we are accruing this benefit.

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This is how I secure my bike to the ferry’s railing.

As far as I can tell, there are no “semi-fixed costs” of riding the bike.  If I stop commuting by bike for just a month or two, I will save nothing beyond the marginal costs.  So adding these semi-fixed costs adds $12/day to the advantage of the bike+ferry commute!

Finally, there are the fixed costs, and it is here that the bike truly shines.  The bike itself cost me about $1000, and I spent about $1200 more on things like a rack, pedals, lights, bike locks, phone mount, fenders, heart-rate monitor, speed/cadence sensor, and other one-time purchases.  Many of these costs were just to add features that are not strictly necessary, but so does my car have nice features, so it is only fair to include them.  I expect this bike to last me at least 5 years, possibly much longer, with not much more investment needed beyond the maintenance already described.  (Bike Snob NYC claims one shouldn’t expect to have the same bike more than 2 years, as it will eventually be stolen, but I’m hoping 15 lbs of bike locks will help with that.)  On the other hand, I expect to get close to nothing for the bike at the end of its useful life.  Bike fixed cost: $1.75/day (tops).

The car, on the other hand, costs about $35,000 (new), will last me 7-8 years, at which point I expect to receive no more than $8,000 for it.  Along the way, things will inevitably break, bringing the total fixed cost to at least $30,000 spread over no more than 8 years. Car fixed cost: $15/day (at least).  Granted, some of this depreciation in value is proportional to the mileage on the car, so perhaps it should be considered a marginal cost.  At my current mileage, Kelley Blue Book tells me that each additional mile driven reduces the value of my car by about $0.07, so perhaps $2.75/day of this should be considered marginal.

Bottom line: Car total cost = $51.70/day.  Bike+ferry total cost = $20.45/day.  At that rate of savings, I’d still come out ahead if I replaced my bike every 2 months!

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Waiting for the ferry at Paulus Hook.

Before wrapping up, I should mention that transit, via the express bus ($5.71/trip after Metrocard “bonus”) and PATH ($1.70/trip with SmartLink) costs $14.83/day with no maintenance or fixed costs (except perhaps occasionally buying new walking shoes), is definitely the cheapest, but also the longest and most frustrating, and (remarkably) it is not that large a difference.  It certainly is not enough to entice me away from the bike+ferry commute.  In any case, even the bike+ferry commute can be made cheaper by modifying my work hours slightly so I can take the PATH train regularly with my bike.  That is not always feasible for people, and seems not to be feasible for me at the moment, but this would actually be the cheapest option, a total cost of just $6/day.  On the other hand, then I’d miss out on these gorgeous views, too.  So the ferry it remains.

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