The Economics of Bicycling to Work

FMF reader Brad sent me the following email a couple weeks ago:

I bike to work 2 to 3 days per week during the summer and occasionally (if it's reasonably dry and warm) in the other months.  I've analyzed this many times, and here are, in my view, the pros and cons (both financial and otherwise):
 
Pros:

• Obviously, there is a savings on gasoline. If your car gets 20 mpg and gas costs $3 per gallon, gas costs you about $0.15 per mile.

• There is an additional savings on car maintenance. Most cars require scheduled maintenance every 15,000 miles which costs at least $500, plus it's safe to assume another $500 of mileage-driven unscheduled maintenance every 15,000 miles. Add in an oil change every 3,000 miles at a cost of about $20, and that's about $1,100 of mileage-driven car maintenance every 15,000 miles, or about $0.07 per mile.
• There are other indirect costs of driving, some of which are unfortunately largely fixed if you simply own a car - taxes, insurance, depreciation, etc. In the case of taxes, there is no break for biking to work once in a while. I'm also not aware of insurance companies giving a discount for those who bike to and from work on occasion, although it would seem to make sense, given that this reduces the risk of loss to the insurance company. Market value depreciation is largely time driven but also mileage driven to some extent, so there is a savings there, very difficult to calculate.
• Some employers (and some local governments) give financial incentives to people to bike to and from work. The city I live in has a site where you can register your bike rides and after 50 roundtrip rides, you get a $50 Amazon gift card (I guess they trust the honor system on this one).
• If you are able to completely give up your car and bike (or walk / take public transit) 100% of the time, there are potentially substantial savings. Aside from the taxes, insurance, depreciation, etc mentioned above, you may also be able to save the cost of your parking spot if you are a renter or live in a condo. Also, some employers give incentives - my employer will give you $200 per year to give up your parking pass altogether.
• On the non-economic side, bicycling provides an excellent leg and cardiovascular workout (come to think of it, this could have economic impact as well insofar as it could keep you healthier and result in less costly medical care later on).
• My employer benefits when I bike. I am much more mentally alert and energetic on the days that I bike compared to the days that I drive. Therefore, my career may benefit long-term from biking to and from work.
• Speaking of careers, I recently bumped into the CEO and CFO of my company in the locker room after a morning ride in to the office. Okay, so the men's locker room at work is not exactly the ideal place to network. But these guys at least know my face, and it's nice to know that senior leadership of my company looks favorably on employees who get physical exercise and choose this non-traditional means of getting to work.
• I'm politically libertarian, and I hear my liberal friends talk a great deal about green things, and how green they are for driving a Prius. I don't do many of the environmentally friendly things they do, but when I tell them I bike to work fairly often, it usually gets them off my case. :)

Cons:

• While a bike is clearly cheaper to purchase than a car, they don't give away bikes for free. I suppose a used bike could be had reasonably cheaply on Craigslist or eBay or something similar. A good quality, new bike will run at least $200 to $300. I know guys who have spent upwards of $2,000 on a bike. Because of low back problems I have had, I need a bike with upright handlebars and some suspension, so I bought a commuter/comfort bike for about $400 about three years ago and it's held up very well.
• Bikes have accessories. Some are required (i.e. ~$50 for a good helmet, ~$10 to $20 for lights and reflectors if you ride after dark, etc), some are optional (i.e. specialized clothing and shoes, saddlebags, etc).
• Similarly, while bike maintenance is cheaper than car maintenance, they do require maintenance. A tune-up once per year will run $50 to $100, although my employer subsidizes this for those who ride (I paid $15). Bikes also eventually need tires, brake pads, seats, etc replaced. If you ride as often as I do, you can count on $50 to $100 of unscheduled "maintenance" on top of the scheduled tune-up.
• There is risk of injury when riding a bike (of course, there is risk of injury when driving a car, too).
• Depending on the length of your commute, biking may add a significant amount of time, especially when you factor in a shower and change of clothes on either end. When my commute was 10 miles each way, driving took about 30 minutes in the morning and 45 minutes in the evening, while biking took an hour either way plus 15 minutes to shower and change. Now my commute is only 5 miles each way, so driving takes about 20 minutes in the morning and 30 minutes in the evening, while biking is about 30 minutes either way plus 15 minutes to shower and change. So at 5 miles, there is not much time lost but at 10 miles, there is.
• In the car, you can listen to the radio or a CD/MP3 or carry on a (hands free) phone conversation. On a bike, you cannot safely do any of these.

I used to bike a lot (roughly 2,000 miles a year) before I started swimming as my main exercise, so I'm pretty familiar with this subject, and I can say this list is pretty good. A few comments I'll add:

• While I rode all those miles, I never biked to work (I did drive my bike to work -- hooked to the back of my car -- to ride with friends from work.) Why? My main issue was that I would be riding in the dark for much of the trip in -- something I wasn't really keen to do.
• I agree 100% that biking is a GREAT exercise and has many benefits -- both financial (saving you on health care costs) and non-financial (potentially helping you live longer and enjoy life more.)
• Biking is dangerous if you ride the roads. I've had numerous friends either hit by cars or "eat it" in some form or fashion (one even crashed on a bike trail -- he wasn't paying attention and hit the metal bar designed to keep vehicles off the trail). When you consider that you're risking your health/career by riding to work, and that your career is your most valuable asset by far, the economics of riding to work aren't that good any longer. That said, is it really THAT dangerous? I'm not sure.
• Yes, you can listen to an MP3 player on a bike. I did all the time. I listened with one ear and left the other ear open to listen for traffic.
• The whole "shower afterwards" thing is a hassle. You either have to bring your stuff in (by car) the day before or somehow carry it with you on your bike as you pedal in. And many people don't even have a place to shower at work. That's one thing I like about swimming -- showers are part of the deal. Of course, you can bike almost anywhere but you can only swim in certain spots (I'm lucky to have an Olympic-size ten blocks from my house and 12 minutes from work.)

I have a few friends that bike to work and they love it. As Brad says, they think it puts them in a better mood for the day. Plus, by the time they get home, they don't have to make time to exercise -- it's done.

So what's your take on biking to work? Good idea? Bad idea? Or somewhere in between?

Comments

[Money Beagle]

I would consider the idea because my situation would be pretty much perfect for it as I only live about two and a half miles from work. However, the thing that prohibits me from doing so is that to get to work and back would require me to cross one of two freeway overpasses, neither of which is bike friendly. I've seen bikers cross these and it scares the heck out of me every time they do because they're so dangerous.

[Rob]

I use cycling as my primary form of exercise (and also because I enjoy it). However I hate being sweaty when in an office environment and there is no shower at my office. If I worked somewhere with a shower biking to work would be a no brainer. Not only that but my office is only a mile away so it almost takes just at much time to get the bike out and ready as it does to get in the car. I'm spending so little gas it is hardly worth the time and effort.

My father bikes to work almost every day of the year unless it is raining or below freezing (he lives in Jersey). They do not have showers at his work either but he just takes his time so he doesn't sweat (going slow would annoy me). In regards to his car I believe his insurance did give a discount of some sort since he is not driving it much.

In regards to the cost of having a car I think Brad's figures are a little misstated. These days most cars do not have to have their oil changed every 3,000 miles. It is more like every 6k or 7k. Both of the cars I have are Honda's and the computer just tells us when to get the oil changed. Not only that but $500 for routine maintenance also seems rather high. So far the only cost of owning our Accord has been oil changes and checking various areas of the car and it has 47k. We do need new tires soon which will be around $300 - $400. That being said, a car is still much more expensive than a bike, but I think the estimated costs are a bit high.

[billyjobob]

Although I have worked for the same company for the last 20+ years, I have worked in 3 different locations. At the first one I was 6 miles away and it was mostly country roads to get to work. I rode my bike pretty much all summer when I was there. Then they moved me to another location that was more in the city. I tried to figure out a safe way I could ride my bike. But there was just no way. The roads were to heavy with traffic and it just would have been to dangerous. Unfortunatly America is not really a bike friendly nation. I wish we could be more like many of the countries in Europe. I love places like Holland where they have a bike lane in the cities. I now work too far away from home to ride a bike.

When I was able to ride I enjoyed doing it and I always felt like I had got my exercise for the week just by riding to work. The savings a gas was also a nice perk.

I agree mostly with what Brad says. Only I did not find my bike cost were as much as his. My bike cost about a 100 bucks and I bought a basket and a nice seat for it that added a little cost to it.

[Budgeting in the Fun Stuff]

Nice idea, but not doable for me. I work at a company in Houston that's 12 miles from my house - those 12 miles cover a whole bunch of not-biking-friendly freeway and tiny roads. Plus my company offers no biking incentives or accomodations...no showers and nowhere that great to lock your bike up. 1000 person location and 2 whole bicyclists - each of them lock their bikes to the handicap walkway and "freshen up" in the men's restroom. Nope, not for me.

Even when we lived at an apartment complex down the street about 1/2 a mile, I drove...there was one major street that had to be crossed that was 5 lanes across and had no pedestrian crossing. This part of Houston just isn't friendly to non-car commuters...

Swimming sounds good though and there is a YMCA on my way to work. :-)

[Stephan]

i think its a great idea if you can do it. it requires a lot of determination every morning, a shower at work, and the will to ignore the easy way out!
Preferred Financial Services

[Rich A.]

FMF, when you're in Chicago with the family, check out their Millennium Park Bicycle Station, where workers can park their bike and enjoy a shower before heading to the office! http://www.chicagobikestation.com/memberships.htm. I discovered it when I was in Chicago earlier this summer, and I think this is awesome!

I've wanted to bike to work all summer long, but haven't yet because it's been so hot and muggy...and I wouldn't have a place to shower. But my kids wanted to ride to my office (it is located along a river), so we've done it 6 or 7 times so far this summer in the evenings. It's 7 miles each way.

[jim]

If it works for you and you like it then thats great.

I tried biking to work but its not for me. 20-30 minutes of my time isn't worth the $.50 in gas savings. Plus it rains a lot here and I don't want to ride a bike in the pouring rain.

[Anthony]

At 5 miles, it would be worth it to bike to work. ten miles may be stretching it, for me. At roughly 15 miles (how far I commute one way), I do not think that biking is feasible...

[Brian]

Biking to work can be a lot easier than people think. The shower thing can be tough, but the hottest it has gotten around the DC area this summer in the mornings has been about 80 degrees. If you take your time, you won't be too sweaty once you get to work.
When I first started bike commuting, I tried to follow the most direct (driving) routes. The first would have led me down a huge hill (and back up in the evening) where the speed limit is 35, but cars routinely hit 50 and up. I didn't even try that. Another route took me over an interstate and across exit ramps. I only did that a few times. Then I finally asked some other bike commuters at work for advice, and they pointed out a route using a bike trail that didn't add too much distance, and kept me off the main roads entirely! That was the moment everything clicked for me, and I've been doing it at least twice a week since then. My attitude is so much better on the days that I bike. I love it.

[tom]

It seems from the comments that the most important factor is "distance to work". I purposely moved job and home close to each other (2 miles) and ride every day in my mild climate rain or shine. No need to move my shower location to the office. We eliminated a car from our 3 person household and save about $4,000 per year that goes toward retirement. It compounds in IRAs and will allow us to retire 5 years earlier. Try the math and see if you can make the healthy wealthy change.