Every day is already a gas tax holiday

The cost of gas has tripled in the last few years, Goldman Sachs is predicting oil at $200 a barrel, and the economist Paul Krugman makes the case for why this isn’t a speculative bubble. Given that reality, what’s a country to do?

Subsidize?

Both Hillary Clinton and John McCain’s recommendations for a gas tax holiday this summer begin us down this road. As it stands now, we are already experiencing a gas tax holiday, every day of the year. Our gas taxes have 42% less buying power today than when established in 1993, which is why our road infrastructure is in such sorry state of disrepair. Imagine trying to keep your own life in good working order with 42% less buying power.

And indeed, filling up the gas tank is taking a significant bite out of the average family’s household budget, and is forcing difficult choices among those with the lowest incomes.

Is subsidizing the answer? It might be, for some very small slice of Americans. Which doesn’t mean it should be for all Americans.

Indonesia gives us an example of what this path holds. That country has been subsidizing gas for its population for years, initially certainly with good intentions of helping ease the cost of a perceived necessity. This year, Indonesia anticipates that these subsidies – 40% of the real cost of fuel -- will eat up 13% of its federal budget, more than it spends on education and health care. When the government reduced these subsidies in 2005, riots ensued. Yet projections around gas prices are forcing the Indonesian government to sensibly reduce is subsidization a seond time. It is expected to announce another reduction in the subsidy shortly, resulting in an immediate 25-30% increase in gas prices.

I think we would all agree that an overnight 25% increase in fuel prices is going to be a real shock to their economy. But it is the right thing to do. Better yet is to never start down this path. It isn't helpful, not in the short run, nor in the long-run. More on that in the next post.

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Which cars get the best mileage?

We all use the Prius (45 mpg highway) as the short-cut reference for a fuel efficient car. The folks at Honda must be ripping their hair out at the relative silence yet equal performance of the Civic (also 45 mpg). And the Mini Cooper, with its award winning ad campaigns, should surely be taking advantage of its incredible mileage (36-40 mpg). And for me, the fact that the Pontiac Vibe, a car I know little about, is in the top ten was a revelation.

Note to policy makers and car buyers, as I've said before, don't give special treatment to "hybrids." More than half the cars on this list have regular engines. Fuel efficiency is the key, and even more relevant is passenger miles per gallon. More than seventy-five percent of car trips carry only one driver. The most expedient way to improve fuel efficiency is to move more people per gallon consumed. [I have to reference GoLoco here, our best-in-class ridesharing site.] It takes 25 years to turn over the US fleet of passenger vehicles to get the full benefits of the new CAFE standards. But we could get those benefits this week if more people would share rides.

Here is the top 10 list link from AutobeTel.

Here is an interesting article about how buying high mileage used cars is actually the most CO2-minimizing path (if you are going to buy a car).

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Get Real On Global Warming Goals

This article I wrote originally appeared in the Boston Globe on 4.22.09.

REJOICE, cry, or get motivated? After seven years of pretending global warming isn't a real issue, President Bush finally announced a national goal. Let us rejoice. The goal? "To stop the growth of US greenhouse gas emissions by 2025."

It's enough to make you cry. Who are his advisers? Clearly not the leading American climatologists who would have told him that leveling emissions by 2025 misses by over a decade that first and most critical milestone to avoid catastrophic effects of climate change.

If we want to improve our chances of averting this century the extinction of 50 percent of the species or dramatic drops in grain yields or devastating sea level rises, we have to get worldwide CO2 emissions to start a real decline as fast as possible. Scientist Jim Hansen says that if we wait until 2018 to "stop the growth of greenhouse gas emissions" then we have close to no chance of avoiding catastrophic effects. Scientist John Holdren tells us that if we plateau in 2015, our chances of averting these catastrophic effects are down to 50 percent.

All of us are caught in what could turn out to be a death spiral. Politicians suggest a roadmap of politically acceptable solutions that promise CO2 reductions in the palatable distance because they believe the public won't accept what is really required. The public, not yet adequately informed, looks to politicians to tell us the scale of response required and how to achieve it. Leadership won't lead, and the people aren't clued in.

Cap and trade is the current approach on Capitol Hill and in presidential-candidate platforms because it puts the burden of action far from consumers (voters), even managing to overlook the 20 percent of emissions that come from our personal cars. Under cap and trade, major point sources of CO2 emissions - power plants and energy-intensive factories - will take important and necessary steps to reduce emissions by retrofitting their plants and factories. But unless there is a magic wand out there that can be waved over each smokestack, retrofits and new facilities can't possibly come online in the time frame we are talking about - now, and within two to three years. Cap and trade solutions just don't cut it.

Bush's speech did have one brilliant idea that should be adopted immediately. He said that the country needs to create incentives that should be 1) "carbon-weighted to make lower-emission power sources less expensive relative to higher emissions sources," 2) "technology-neutral because the government should not be picking winners and losers in this emerging market," and 3) "long-lasting."

A carbon incentive needs to be applied immediately to everything that emits CO2. The more you emit, the more you pay. This will encourage people to choose options that produce the least amount of emissions.

The changes needed to stop the growth of greenhouse gas emissions in the next two to three years aren't Draconian. We need to reduce our CO2 production by 3 percent this year, and 3 percent each subsequent year. If we cut one of every 20 car trips, or share one out of every 10 rides, that's 1 percent of all CO2 emissions.

And so let's get motivated. We need to stop growth in CO2 emissions not by 2025, or 2018, or 2015, but by 2011. The individuals, businesses, states, and countries that accept this reality first will have a head start on the solutions needed to thrive and succeed, in the new low-carbon economy this century demands.

Politicians need to stop offering solutions inadequate to the task. Americans are strong, brave, and smart. Not only can we take hard truths, we demand them. We want to win. We want to be leaders in this new world. Give us carbon-weighted incentives and watch us lead the world.

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Where will bike-sharing work?

OK, Paris was and is terrific. Car traffic was manageable; bike lanes abound; everything is close to everything; and each block of the city is a nice one to be out riding on. So where else will it work?

Places that have safe places to ride. Paris has spent the last 4 years working out dedicated bike routes throughout the city.

Places that don’t have too many hills. I know that San Francisco is looking into bike sharing for their city. After my no-bike experience at the top of a not very big hill, I just can’t imagine the size of the bribe it is going to take to encourage people to return bikes to the top of SF hills – or what percentage of bikes will have to be trucked around and how many times a day.

Places where there is great transit. At least as Velib works now, you can’t absolutely positively count on a bike being available. If you can’t count on it, then it is out for commuting, out for important errands, and becomes a kind of nice novelty. That will dramatically diminish its use.

Places where we aren’t weather wimps. I couldn’t say places with nice weather, because I know those Danes use their bikes in every possible climate. I guess it will depend on the culture of those who live in the city whether or not they will ride when it is dark, cold, drizzly, hot, muggy.

Places that commit to a large number of bike locations. It really mattered that the bike stations were everywhere. At first I was irritated that Velib didn’t have printed maps available to show where the stations were, and that it was too dangerous to wing it. But I was wrong. I could depend on finding a station with just a little bit of circling. I didn’t need a map or big green V’s marring the beautiful Paris streetscapes shouting “here.”

Places that are beautiful – certainly a plus. The pleasure of being out and seeing the sites was a big encouragement. Velib quickly became my top and preferred mode of transportation: virtually free, fast, convenient, safe-ish (I would have liked my helmet), beautiful. As a single (sans enfant) person, why travel any other way?

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Details of the Velib deal and operations

(as of March 21, 2008, 8 months after launch) Details on stations, communications,bikes, utilization, contract. Here is Velib link, note you can change language in top right corner.


Stations: Each Velib station is positioned along a section of sidewalk, or a carve-out from curbside parking. Typically, these are not on the prime thoroughfares, but on the smaller streets that abut them. There is a 6 foot high kiosk and 10 or 20 knee-high locking stations cemented into the ground. You reserve the bike at the kiosk, choosing a specific bike (the parking stations are numbered), and then push the button on the station of your chosen vehicle and it releases.

Communications: The kiosks communicate using GPRS to the server. The bikes themselves have no electronics. One half of the stations get connectivity through one cell phone company; and the other half through another, with the idea being that if one cell provider goes down, at least half the bikes will still be accessible. In their third day of operations they had a 2-hour outage. Since then, all has been well.

Bikes: Have sturdy-ish front basket, three speeds, front and back fenders, chain guard, front and back lights powered by generator, lock, very hard seat, up-right riding stance.

Utilization: 60-90,000 trips daily in winter; 150-170,000 trips daily in the summer. This is about 7-12 trips per day. 97% are less than ½ hour (cleverly accommodating almost all trips you would do in the city). Almost 200,000 people have signed up for annual memberships, reaching their estimated goal for first year four months early.

They have to move about 18% of the bikes using a small truck with a flatbed trailer attached. This corresponds roughly to the commute into Paris in the morning and the reverse commute back out. You can understand this movement of bikes here.

The advertising deal with Paris (I didn’t read the contract; this is information from Albert xx, the person at JC Decaux who is in charge of this project). The city of Paris aggregated all its street advertising (primarily bus shelters and some flat stand-alones) into one single bundle, as well as eliminating 20% of the existing advertising (no doubt the least visible spots). Companies were asked to bid on the contract. In addition to the amount the city would normally get for selling its advertising space, the city required that the bidders sweeten the deal the building and operations of bike-sharing for the city of Paris. The contract is for 10 years.

I see this as something of a clever bribe: You want our prime city’s prime eyeballs? We want our cut of the revenues plus Velib. There is a long story about how the bid (and rebid) unfolded, with the result that Paris got a promise for 20,000 bikes. Decaux’s previous bike efforts, in 8(?) other cities only totaled 12,000 altogether. So Paris got a deal on a totally different order of magnitude, which corresponds to the value of Parisien eyeballs relative to those in other cities. This makes me realize that there are very few cities in the world that are likely to be able to extract as large a “bonus” as Paris did.

Decaux says it spent 90 million euros in 2007 on Pairs: to build Velib and swap out the flat-panel stand-alone advertising for new ones that rotate three different ads. One friend, Eric Britton, tells me that when DeCaux reinstalled the new panels, it rotated some of them that were parallal to the curb, to become a right angles with the curb, obstructing the sidewalk. Decaux claims it was only able to pull off this deal by installing the rotating sign boards which bring in three times the revenue because they support three times the advertising.

Remarkably, from contract award to Velib launch, only 4 months passed. As many as 700 people were at work on the project last year. They are down to 400 staff people now. While there are plenty of things you can imagine that would improve the system, I have to give them enormous credit for pulling off a system that is 85% right is just four months. Over time they will hopefully tweak and improve the system. In fact, starting this week, they will be offering a 15-minute “credit” for people that return bikes to 40 stations they have identified as chronically under-biked. And surprise, surprise, many of these stations are at the top of the hills.

Oh, Decaux has experienced way more vandalism and theft than it had in any of its other cities. No doubt (hopefully) they will figure out to minimize this problem.

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Success of Paris bike-sharing

Or Robin eats humble pie.

For years and years, people have asked me if Zipcar were going to expand into bike sharing, or did I want to get involved with a bike sharing start up. Each and everytime I thought, why? What’s the point? Anyone who wants one can pick up a used bike for as little as $30. And the market for tourists is handled by bike rental.

Then, Paris launched Velib (roughly translated as Bike Free) last July, put 16,000 bikes throughout the city in groups of 10 and 20. It has been a roaring success.

Last week I was in Paris and used it every day, several times a day. I took the Metro only four times. Velib is great! Here’s why:

• You can get a bike in front of your house and go to a park.
• Lock the bike into a nearby Velib parking space way faster than it is to find a good spot for your own bike and lock it up.
• Wander through the park and come out the other side. Grab another bike, and keep going.
• Stop at the grocery store that doesn’t have Velib parking. Use the lock that is attached to the bike to lock it up while you shop (ugh, a real pain compared to the push-in locking at the Velib stations).
• Take the subway to a friend’s house for dinner and decide to ride a bike home because it is faster. It has front and rear lights powered by your feet.
• Ride a bike into work. End the day with a meeting away from the office. Take another bike home.
• Push it into the nearby Velib spot, buy some take-out, and go up 7 flights to your apartment. Don’t worry about rain, storage, maintenance, or parking.

Cost: 1 euro for 1 day; 5 euros for 7 days, 29 years for a year. That’s it if you keep your trips around town to under 30 minutes. And my trips always were.

I LOVED IT.

Down sides:

Bike Upkeep: There was an inexcusable (from my operational point of view) number of dead broken bikes on the racks that had clearly been sitting there – tires ripped out; broken baskets and fenders, or smashed by hoodlums. Wise people check front and back tires, brakes, lift up the rear wheel and give it one pedal, and look for chain guards (I ripped my pants the second trip because it didn’t occur to me that every bike wouldn’t be intact). If the bikes don’t stay in good working condition, Velib will no longer be mobility contender.

Bike Availability Unpredictable: On Sunday I rode to the top of a hill to visit Pere Lachaise cemetery. As predicted, when I got to the top of the hill and the closest Velib station, my bike proved to be the only one there. After I’d had my fill of famous dead people’s graves, I went to get a Velib for the return home. Of course, my bike was gone and that station was empty. The kiosk has a print map of the Velib station you are at, and shows you all the adjacent stations. Over the next 30 minutes (and snow flurries were coming down) I walked to four more stations. At each one I found: 2 dead bikes, 5 dead bikes, 5 dead bikes, 2 dead bikes. When I got home, I went to a website not maintained by Velib -- parisavelo.net that has hacked their data. It shows you a map of Paris with:

green balloons (both bikes and parkings spaces available),
red balloons (racks completely filled with bikes, no space to park), and
black balloons (no workable bikes).

Gosh, wish Velib had that live data available at their kiosks!

My lesson from that day, and from the other days, is that with practice you will learn the pulse of bike and parking availability for your common routes, and adjust your use of Velib accordingly. If I’d been smarter, the obvious thing to do on finding no bikes at the top of the hill was to walk to the closest downhill station. I stupidly stayed on the top of the hill (7 black balloons mapped there on a cold Sunday afternoon). This means that I might or might not be able to rely on Velib for commuting to work. In general, I think Velib will work best in cities that have great mobility redundancy: the Velib’s weren’t at the top of the hill so I hopped on the Metro, no problem).

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Privatized roads are like casinos

Privatized roads are like casinos because we know that the owners will take their cut, meaning that it is not an even deal.

I learn from an article in the March 17, Wall Street Journal "Letting the Market Drive Transportation, Bush Officials Criticized for Privatization" that:

"the Government Accountability Office warned that tolls on privatized roads are typically higher than if the roads remain under public control, because of the need to generate steady profits for private investors. The report said the federal government needs to better protect the public interest."

Exactly. Read the GAO report that came out in January (which I couldn't find in my internet search) or my earlier scintillating blog on this topic.

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