The price isn't right : mobility alternatives and their plight

Abstract

When it comes to car size, the conventional wisdom of both auto manufacturers and drivers alike would dictate that smaller cars are designed for and work best in the tight confines of the city. Small cars-and specifically for this study, sub-compact 'city cars' such as the Smart Fortwodo indeed offer distinct advantages in terms of fuel efficiency, parking flexibility, increased visibility, as well as better maneuverability. However, empirical observations in the Boston Metropolitan Region finds little-if any-correlation with greater share of such vehicles in downtown settings as opposed to more suburban surroundings. Given the suggested advantages of these small cars, why don't they proliferate downtown? This study presents several possibilities, beginning with the likelihood that consumers apply a heavy discount to small vehicles as dictated by larger cultural values that may easily outweigh purely economic benefits. The study measures these economic benefits, employing an accounting-based methodology to calculate true long-term costs of driving, highlighting the compared costs of four car models: those of the Toyota Camry, Smart Fortwo, Smart Fortwo Electric, and the Nissan Leaf. Such a comparison illustrates the difficulty small cars face in expensive downtown settings such as Boston's; counterintuitively, the greater the number of costs that must be paid for by drivers-parking rates, tolls, congestion fees to name a few-the lower the comparative advantage often becomes for city cars and their like. On the other hand, if prices could be set to reflect real market conditions, especially in downtown areas where city cars are designed to excel, comparative economic advantages for these small cars grow quickly. This is particularly true for parking-should parking rates be charged in relation to how much space is actually used, city cars in particular could hold significant longterm economic advantage over larger options, a potential game-changer for urban mobility.