Is car ownership worth it for city dwellers?

Red lights ahead. Image: Aviva.
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For city dwellers who are fortunate enough to have access to good public transport, a car might be anything from a luxury used for road trips to the countryside to a burden, costly to park and cumbersome to navigate around congestion zones and heavy traffic. For most, it’s probably somewhere in between: used for occasional errands, such as trips to IKEA, and otherwise not really needed.

In an age where most people in their 20s and 30s would rather give up their car than their smartphone, the question is whether or not our cities are geared up for this transformation. We’re at a point in human evolution where people, especially young people, want to have a say in how they move about. Do they drive or not? There’s been a significant transformation over the past few years around ownership models.

On-demand services are ubiquitous for generations of young city dwellers and anything beyond that feels awkward and full of friction. Music, movies, food and commerce have all embraced the change and have come out the other end relatively intact and efficient. The good news is that there are alternatives focussed on relieving the urban burden of car ownership, whilst also being good for both the pocket and the environment.

One of these options is the subscription model: this includes car clubs. Companies like Enterprise, Zipcar, and E-Car charge a membership fee to join and then allow users to collect and return cars that are parked in various locations as and when they are required. All of the costs of owning a car – including tax, insurance, and maintenance – are typically included in the membership and hourly rates, although some companies also charge a nominal mileage fee. Other operators like Drover give subscribers the chance to swap their vehicles throughout the ‘membership’ period, and even include a BP fuel card.

The costs of ownership and car clubs compared

The costs of owning a car can be substantial: the average car costs UK drivers £162 a month, excluding any refinance payments, according to research by KwikFit. That goes up to £388 if you factor in the costs of buying the car – on average people pay £10,511 for cars purchased in cash and £15,438 for cars bought on finance.

How much it costs to join a car club will depend on what type of user you are. Zipcar, which claims to be the UK’s largest and most flexible car sharing service, offers either a monthly membership of £6/month with rates of £5/hour or £44/day or an annual membership of £59.50/year and the same hourly and daily rates. Fuel and congestion charge are included.

Bluecity says it is London’s first point to point car sharing system that is powered by 100 per cent renewable energy. It charges £5/month plus 19p/minute, with a minimum charge of 20 minutes. While they don’t require petrol, naturally, they will need to be plugged back in. Congestion charge is included as well.

Sharing cars

There are many challenges to owning a vehicle when living in a city. Sharing the pain of ownership could be a viable alternative for some people. Several councils in the UK have adopted lift sharing schemes. By sharing a vehicle with others and matching up journeys, users can share the costs as well as make new friends.

It’s pretty obvious that, by having less cars on the road, emissions would reduce too. In Norfolk, the county council and Liftshare set up a free-to-use lift sharing service for anyone who lives, works and travels in and around the county. They’ve even created a website to match up drivers with passengers. The CO2 saving is calculated along with the cost of the journey and contributions to the ride are shared with the other passengers. What’s more, members of the schemes can get access to priority parking bays reserved with participating organisations

Which is the way forward for cities?

For ultra-low vehicle users, buying a car is an uneconomic choice. The moment you buy a car, it begins to depreciate, and most of the time, it just sits there on the kerb, driveway, or garage.

Of course, if you need constant access to a car, or if your area doesn’t have a fleet of hire cars, you won’t just be able to give up on the ownership model. According to the RAC, car clubs work best in urban areas, and even so, usage is low. But there are many people who can reconsider their relationship with private transport, and that will have a big impact.

Most of us buy a car with the worst-case scenario in mind – thinking about that one trip where we have the whole family, all the suitcases, and all the shopping in the vehicle, and you’re moving across the country. That’s the one trip we have in the back of our minds when we go shopping for a vehicle, and we end up doing that trip maybe once a year – but the rest of the time we’re using it either on our own or to drop the children off at school, which means we’re over-purchasing in some cases.

A sensible option would be to think about what kind of car we need for one or two people and light goods – and what kind of storage we really have for the car – and buy that. And we can hire, or lease, or subscribe to the larger vehicle for that one big journey where we need to put all the suitcases and the kids and the dog and the kitchen sink in the car all at once. That would make much more sense, rather than having that huge, expensive vehicle that was depreciating massively, parked up near your home, not doing what it was designed for – which is full occupancy.

Of course, cars aren’t the only way to move around in cities. Walking, cycling, scooting and public transport generally have a place and should be considered as part of the overall mix of mobility. In London’s Mayor, Sadiq Khan, set out his vision for the city in his Transport Strategy and reaffirmed the aims that, “London must become a city where walking, cycling and green public transport become the most appealing and practical choices for many more journeys”. He went on to describe how, “… sustainable transport choices not only support the health and wellbeing of Londoners, but also the city as a whole by reducing congestion and enabling the most efficient use of valuable street space”.

We need to make sure we’re using the right vehicles for the right purpose, so that ultimately, we can have fewer vehicles on the road – and not as many larger SUVs, which are the more polluting cars. Ultimately, we’re aiming for a more sustainable future, which will include more electric vehicles, but there are a lot of things to consider before we can get there. People need to have a way of storing cars and eventually charging electric cars, and in the interim a subscription model is a good way of reducing the number of vehicles on the road.

Andreas Mavroudis is Senior Mobility Futures Manager at Aviva.


Tackling toxic air in our cities is also a matter of social justice

Oh, lovely. Image: Getty.

Clean Air Zones are often dismissed by critics as socially unfair. The thinking goes that charging older and more polluting private cars will disproportionately impact lower income households who cannot afford expensive cleaner alternatives such as electric vehicles.

But this argument doesn’t consider who is most affected by polluted air. When comparing the latest deprivation data to nitrogen dioxide background concentration data, the relationship is clear: the most polluted areas are also disproportionately poorer.

In UK cities, 16 per cent of people living in the most polluted areas also live in one of the top 10 per cent most deprived neighbourhoods, against 2 per cent who live in the least deprived areas.

The graph below shows the average background concentration of NO2 compared against neighbourhoods ranked by deprivation. For all English cities in aggregate, pollution levels rise as neighbourhoods become more deprived (although interestingly this pattern doesn’t hold for more rural areas).

Average NO2 concentration and deprivation levels. Source: IMD, MHCLG (2019); background mapping for local authorities, Defra (2019).

The graph also shows the cities in which the gap in pollution concentration between the most and the least deprived areas is the highest, which includes some of the UK’s largest urban areas.  In Sheffield, Leeds and Birmingham, there is a respective 46, 42 and 33 per cent difference in NO2 concentration between the poorest and the wealthiest areas – almost double the national urban average gap, at around 26 per cent.

One possible explanation for these inequalities in exposure to toxic air is that low-income people are more likely to live near busy roads. Our data on roadside pollution suggests that, in London, 50 per cent of roads located in the most deprived areas are above legal limits, against 4 per cent in the least deprived. In a number of large cities (Birmingham, Manchester, Sheffield), none of the roads located in the least deprived areas are estimated to be breaching legal limits.

This has a knock-on impact on health. Poor quality air is known to cause health issues such as cardiovascular disease, lung cancer and asthma. Given the particularly poor quality of air in deprived areas, this is likely to contribute to the gap in health and life expectancy inequalities as well as economic ones between neighbourhoods.

The financial impact of policies such as clean air zones on poorer people is a valid concern. But it is not a justifiable reason for inaction. Mitigating policies such as scrappage schemes, which have been put in place in London, can deal with the former concern while still targeting an issue that disproportionately affects the poor.

As the Centre for Cities’ Cities Outlook report showed, people are dying across the country as a result of the air that they breathe. Clean air zones are one of a number of policies that cities can use to help reduce this, with benefits for their poorer residents in particular.

Valentine Quinio is a researcher at the Centre for Cities, on whose blog this post first appeared.