Q&A: RU ready to spend 20% of income on $7 gas?
Thirty five years ago, during the first OPEC embargo, I watched Americans switch 10% of their food budget into their driving budget...and decided I didn't want to play that game. I have not owned a car since.
Soon thereafter, as an elected official (in New Haven), I advocated a sharp increase in parking rates to explicitly discourage driving into downtown, and I have long hoped for a significant jump in gas prices to goad Americans into smarter transport choices.
Finally, I'm getting my wish, and it will be interesting to see how Americans...and Kauaians...adjust, following decades of heavy investment in auto-dependence.
Sadly, unlike other developed countries, only half of American households have a public transit option, and most of them live in big cities. And, like most of rural America, public transport works for only about 25% of Kauaians.
At least these 6,000 households are likely to get much more bus-friendly in the months ahead.
Especially our low-income households will prolly stop driving or scrap their second vehicle.
Why? At current driving rates, gas will jump from 7% to 20% of their available income.
These and other fascinating factoids emerge from the first comprehensive forecast of adjustments in American driving habits that can be expected when gas goes to $7.
That's the basic forecast for 2010 prepared by Jeff Rubin and Benjamin Tal (at CIBC).
Here's wot Rubin and Tal foresee:
- US highways are about to get less congested as vehicle miles driven falls 15% by 2010. The number of vehicle registrations in the United States will not grow over the next four years. SUV and other light truck sales, which until 2006 accounted for almost 60% of total motor vehicles, will plummet to less than half that level, reversing the last fifteen years growth in market share.
- By 2012, there should be roughly 10 million fewer vehicles on the road in America than there are today. No less than 80% of low income Americans (or roughly 24 million households) with less than $25,000 annual income own a car. With gasoline bills surging to record highs, they will be the first to come off the road. About half of the these vehicles will be from low income households who have access to public transit.
- Despite falling per capita gas consumption, gasoline will take over grocery store spending as the largest item in households’ non-vehicle retail spending by late next year. One in five of those low income Americans, or roughly five million households, will probably stop driving or give up the second vehicle by 2010. At their current driving habits, filling up the tank will have risen from about 7% of their income to 20%, an increase that will see many start taking the bus.
Perhaps it's not surprising we're learning this from Canadians. Certainly no upstanding American forecasters would wanna spew such heresy (heh).
Published by Ken on June 28th, 2008 tagged HI-specific, Island Vulnerabilities
One Response to “Q&A: RU ready to spend 20% of income on $7 gas?”
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June 28th, 2008 at 11:18 pm
Ken
I get E-mails from ZENN electric cars.
A Canadian company, funny thing is, according to them, they can't sell their cars in Canada because the DOT has not approved them for on road use. These are motorless French mini-cars "upgraded" to electric. They are sold as NEV's which are limited to 35 mph. Canadian's, progressive as they are, might be as slow as us Americans to get up to speed on EV's.