Economics of biking

http://www.grist.org/biking/2011-02-28-how-bicycling-will-save-the-...

 

I also view cars as investments that require sustained incoming cash flows yet give a consistent negative return because they lose value immediately upon leaving the dealers lot. Would any other investment by any financially reasonable person do this? Nope. Cars, financially make zero cents. Period.

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Permalink Reply by Matt M. 18.5KM on April 12, 2011 at 5:58pm
YEAH...CARS SUCK!  Ha ha.....13 minutes.
Permalink Reply by Joe Studer 8.0 mi on April 13, 2011 at 3:13am

Perhaps I am missing something, but I don't understand how my bike is an "investment" or will save my local economy.  And I'm a guy that commutes by bike, gets groceries by bike, and generally uses a bike for most of my errands.

 

Like my car (we are a 1 car, 5 bike family), my bikes represent expenses, not investments. They don't return any money to me.  The only way they save money is in comparison to what I might spend for a car.  I still lay out plenty of money to support my biking.  Just ask my wife and wait for the rant.

 

The "local economy" issue also seems overblown.  While becoming carless might mean I shop and eat more locally than I otherwise would, it doesn't mean that I am going to shop more often or buy more, or eat out more.  So I would simply be shifting my dollars from one place to another.  At best, it seems a zero-sum gain.

 

That's not to say there is no justification for using bikes to perform things for which people currently use cars.  There's plenty to justify that.  Saving money is one.  (Perhaps by investing those savings I might realize some sort of financial return on my cycling.)  Being healthier is another.  And I'm more earth friendly. 

 

And there's also the smugness factor.  That's priceless.

Permalink Reply by Jack on April 13, 2011 at 3:30am

Cars and bikes both lose value when you pull out of the lot.  Try to sell your 2010 Specialized at a bike shop for retail or something close.  Both cost money to maintain.  However, cycling does cost less to operate the vehicle over the course of a year.  Once you factor in foul weather clothing, computers, panniers, etc, the costs do go up, but I bet I put more money in my tank since February than I spent on cycling in the past few years. 

 

And financially, if you want to get technical, its fiscally a poor decision to ride a bike compared with walking.  Its just a different level compared to biking vs. driving. 

 

Speed and convience are balanced out with monetary value on an individual level.   

Permalink Reply by Doug Haynes on April 13, 2011 at 3:30am

I agree with some of this but there is a lot in it I question, even their infographic is suspect.

 

A portion of the stuff they say leaves our local economy actually stays in it; part of the cost of the car is going to the dealer who sold it and their employees.  Same for the fuel that goes in it and the station that sells it.

 

I agree that you can save money by using a car less, having fewer cars or no car at all but I think this article pushes so hard to make it a huge savings and demonstrate it's impact on the local economy that it makes some far out claims.

Permalink Reply by Gort 12-mile Pinklegneep on April 13, 2011 at 3:37am

I'd say the fact that you're more inclined to spend the same amount locally that you'd otherwise spend further away counts as benefitting the local economy. Yes you're spending the same amount probably, but where you're spending it makes the difference.

 

Your bike involves expenses, but they're smaller expenses than you'd have if you used other forms of transit. So that leaves you with more scratch to keep. It's not exactly an investment in the sense that you're getting some return in profit, but it still leaves your balance ina better way than if you had a car. I think it's somewhat telling that bikelords will sometimes bellyache over the cost of things like racks and such when they're right around the same price as a tank of gas, and while I did drop some large on getting a wheel built it'll last me for a heck of a long time and cost less than the average monthly car and insurance payments.

 

So technically the term "investment" may be used improperly but bear in mind that as cycling advocates, we're probably drunk.

Permalink Reply by JeffB on April 13, 2011 at 3:40am
I moved to Chicago in 92 and started biking in 04, but I've been car-free the whole time.  The economic benefit of biking to me is the $86 a month that I don't spend on the CTA monthly pass.  I've longed since paid for my bike, its replacement, the accessories and repair costs just by saving that previously necessary expense.  Now I just consider that I've got $86 extra every month to spend how I want.
Permalink Reply by Gort 12-mile Pinklegneep on April 13, 2011 at 3:40am
This article is an incomplete solution however. Save the economy with bicycles + legal weed.
Permalink Reply by ad on April 13, 2011 at 5:25am



I agree with a lot of what people have already said, but to be fair to the article it never describes a bicycle as an "investment" in and of itself.  It simply notes that if a person were to get rid of their car and instead use a bicycle (or walk) to get around, it would save the person upwards of a few thousand dollars a year.  Not really a controversial point in my mind. 

 

The article then presupposes a person would support the local economy by using the savings to shop or eat out more closer to their home, and by supporting a local LBS instead of distant multi-national auto manufacturers, insurance and gas companies, which is certainly quite a bit more controversial (the person, as you note, could just save it all for the future; and obviously an auto dealership, corner gas station and local insurance agent could also be considered local businesses) but likely still true to a sufficient point to support the article's premise.  While the original poster's comments were a bit inflammatory, I think the article itself is pretty run-of-the-mill advocacy stuff.   

Joe Studer said:

Perhaps I am missing something, but I don't understand how my bike is an "investment" or will save my local economy.  And I'm a guy that commutes by bike, gets groceries by bike, and generally uses a bike for most of my errands.

 

Like my car (we are a 1 car, 5 bike family), my bikes represent expenses, not investments. They don't return any money to me.  The only way they save money is in comparison to what I might spend for a car.  I still lay out plenty of money to support my biking.  Just ask my wife and wait for the rant.

 

The "local economy" issue also seems overblown.  While becoming carless might mean I shop and eat more locally than I otherwise would, it doesn't mean that I am going to shop more often or buy more, or eat out more.  So I would simply be shifting my dollars from one place to another.  At best, it seems a zero-sum gain.

 

That's not to say there is no justification for using bikes to perform things for which people currently use cars.  There's plenty to justify that.  Saving money is one.  (Perhaps by investing those savings I might realize some sort of financial return on my cycling.)  Being healthier is another.  And I'm more earth friendly. 

 

And there's also the smugness factor.  That's priceless.

Permalink Reply by Holly on April 13, 2011 at 5:47am
Nope. It's not just the decaf...fully caffeinated here and nodding in agreement with your funny response, Chris.

Chris C said:

 

Maybe it's because I switched to decaf.  I'm really getting tired of hearing about how Portland is going to save the world.

Permalink Reply by Anne Alt on April 13, 2011 at 5:55am
That's how I view the arguments made in this article.  Even maintaining multiple bikes in good condition, I spend less in one year than I might spend on gas in one year to travel the equivalent distance, to say nothing of car maintenance, license plates, city sticker, insurance, etc.

Peenworm Grubologist said:

I'd say the fact that you're more inclined to spend the same amount locally that you'd otherwise spend further away counts as benefitting the local economy. Yes you're spending the same amount probably, but where you're spending it makes the difference.

 

Your bike involves expenses, but they're smaller expenses than you'd have if you used other forms of transit. So that leaves you with more scratch to keep. It's not exactly an investment in the sense that you're getting some return in profit, but it still leaves your balance ina better way than if you had a car. I think it's somewhat telling that bikelords will sometimes bellyache over the cost of things like racks and such when they're right around the same price as a tank of gas, and while I did drop some large on getting a wheel built it'll last me for a heck of a long time and cost less than the average monthly car and insurance payments.

Permalink Reply by Chris B on April 13, 2011 at 7:22am

As far as "car is a negative investment"

A car is not an "investment" in the first place, which is why is sucks as an investment. It is a consumable.

So is every other consumer item, they all lose value once you accept delivery, anything with electronics or moving parts costs money to maintain (or to replace). None of them make reasonable investments.

 

If someone is calling a car an investment, they are probably trying to sell you one :) or work for a car company

 

 

Permalink Reply by LarryN on April 13, 2011 at 2:00pm
This mis-use of the term 'investment' is exactly what the car companies like to see...

Something that is bought, simply for the thing itself, with the reasonable expectation that it will increase in value (e.g., art, stock, or a rare car, valued by collectors, to be well cared for and rarely driven...) is an investment.

Something that is bought, as a means to an end, knowing that it will wear out and depreciate in value over time, is an expense.


H3N3 said:
One might accurately be described as "investing" in a car (or a bike, or a moped) in order to be able to get to a job that's out of transit range.  Just like you might "invest" in an espresso machine to open a cafe, or "invest" in a set of tools to pursue a career as a mechanic.

Chris B said:

As far as "car is a negative investment"

A car is not an "investment" in the first place, which is why is sucks as an investment. It is a consumable.

So is every other consumer item, they all lose value once you accept delivery, anything with electronics or moving parts costs money to maintain (or to replace). None of them make reasonable investments.

 

If someone is calling a car an investment, they are probably trying to sell you one :) or work for a car company

 

 

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