Monday, March 29, 2010

Sausalito Bicycle "Tax"

I have no idea how this would be implemented, but by now it's old news that Sausalito has considered charging \$1 for rental bikes to offset the "costs" of the "swarm of locusts" riding through the city each weekend day.

The plague of locusts leaves the city.

What costs, you ask? Good question.

First, there's the lost revenue from car parking. Bike racks are taking up valuable, revenue-generating space formerly occupied by a few car parking spots. "A typical parking space might generate about \$3,500 a year in fees and fines." So the bike parking is depriving the city of that much revenue each year, right?

Well, maybe according to the pea-brained logic prevalent among the ruling class of Sausalito. But I recommend they review their first-year economics texts on the difference between marginal and average cost.... parking revenue is lost only if a potential parker can't find any parking and leaves, or finds finding parking so frustrating he fails to return. The cost of removing a single parking space isn't the cost of removing an average parking space, because in the vast majority of cases, there's an alternate parking space available, and the cost to the city is essentially zero. So that \$3500/year needs to be multiplied by the fraction of time no other parking is proximately available. That's a relatively small percent of the time.

But forget about that for a minute. The size of a standard parking space is around 9 feet by 19 feet on average: 171 square feet. What's the month-to-month rental cost on 171 square feet on the Bridgeway in Sausalito? What if the sidewalk were extended out to cover that parking spot, and local merchants could use the added space for cafe tables or street-side displays? What's the commercial value of that? I think the answer is clear: that \$3500/year doesn't even cover the value of that super-pricey strip of land. The subsidy on a bike spot, being maybe 1/6th the size, is less, even after accounting for the lack of meter revenue.

Okay, forget the parking costs. What about paying for road maintenance -- what about potholes? Well, potholes come from two sources: general weather-related wear & tear, and from use. The use component has been modeled as roughly proportional to the fourth power of axle weight. I'll assume this is actually a per-wheel weight, and that each wheel, as opposed to each axle, causes independent damage. A Toyota Prius is 1250 kg unloaded, so I'll assume 1400 kg loaded (fuel, cargo, passenger), distributed over 4 wheels. A bike is around 10 kg unloaded, around 90 kg loaded, distributed over two wheels. So the ratio of per-wheel weights is 7. Raise that to the fourth power and you get a ratio of per-distance pavement damage of 2300. So for every \$1 you charge a bike for pavement repair by this standard, you should charge a car \$2300. Let's not even discuss SUVs....

But then there's weather-related damage. The cost there is a "rental cost": proportional to the amount of space taken up. You can fit around 6 bikes in the space taken up by a car: to accommodate a certain amount of bikes on the road, you need around 1/6th the total pavement. So how much sense does it make to charge rental bikes \$1, and not rental cars at least \$6?

Okay, so then there's the arguments it's important to subsidize cars entering Sausalito: drivers spend money, after all. And the bikes don't? Why are people parking their bikes, anyway? A: to go in the shops, in the cafes.... even if a cyclist spends 1/6th as much as a driver, the bike takes up no more than 1/6th as much space, so the bike is as big a payoff as the car is.

And a lot of those rental bikes are taking the Ferry. More people taking the ferry means more, and therefore better, ferry service to San Francisco: better access to my fine city for Sausalito residents.

Well, bikes are a general nuisance, right? Well, compared to what? If the people on bikes instead drove "good old American cars and trucks" into town, would that be better? Between 1750 and 3500 extra cars and trucks per day, depending on if it's two or one person per car on average? That's one extra car trip every 4 to 8 seconds assuming an 8-hour peak traffic period and that the average tourist drives out and back only once.

So it's all silly, and I don't believe I've spent this much space analyzing this absurd fee proposal. We should be encouraging more people to bike or walk or take ferrys, fewer people to drive. If Sausalito officials engaged their brains at all, they'd realize this.

Paul said...

What about services the city provides? Public restrooms, trash cleanup and emergency response?

The bike rental people make money because people want to see beautiful Sausalito. That money should be taxed to help keep Sausalito beautiful.

This is different than people who live in the area and pay local taxes. Bikes are rented by tourists.

What is your view on hotel room taxes in most cities? I think the motivation behind this tax is similar.

djconnel said...

Any such rental bike tax is distortionary because it is preferentially taxing bikes in preference to rental cars. If Sausalito needs to recover revenue from local rest rooms, charge for use of the rest rooms. But they do not, because they recover revenue from local sales taxes, and the rest rooms are part of the infrastructure which encourages local purchases, and the generation of local sales taxes.

Anything which discrourages cycling in preference of driving I am against. Anything. This tax is in that category.

For hotel taxes: I support taxes being in proportion to expenses incurred, directly or indirectly. Hotel taxes are probably excessive by that standard, and are motivated more by politics than by rational economics. But that's an analysis I won't spend the time doing.