Traffic chaos – try giving out free cars

21st January 2000

It is pretty obvious that car ownership in this country will expand until just about every adult has one. That means a figure in excess of two million cars. Given the huge surge in demand this January, they could arrive sooner rather than later.

If everyone tries to drive these cars at the one time through our present road system, then we face catastrophe. We need to persuade people not to use their cars but we must accept that everyone will still want to have one.

A car represents security of transport. Even if public transport is adequate for most journeys, people still want a car for the odd occasion or emergency. There will always be places and times when public transport doesn’t run.

Because of this fact our present policy does very little to get people out of their cars. The AA estimates that it costs about £4,000 per year to run a car. Only about 15% of this cost goes into the use of the car; the rest is simply the cost of ownership.

Therefore, in the mind of the commuter (and in practical terms), the day to day cost of using the car versus using public transport is greatly diminished. What is required is a decisive shift in costs from ownership to use.

Let us imagine that cars were free and that all the costs went into their use. If the £4,000 annual cost is divided by 365 then we get a cost of £11 per day minimum to use the car. In these circumstances the return charge of £2 (or thereabouts) to use the bus becomes very attractive. But how could this work in practice?

I suggest a pilot scheme to demonstrate the principle. Let’s say that a large fuel company, Statoil for example, are to run the project.

Statoil provides the customer with a new mid-market car, say a Ford Escort, for free. The car is fitted with a special tank that can only be filled at special pumps in Statoil stations. The petrol at these pumps costs £4 per litre compared to the present 60p per litre.

Included in the petrol price is tax, insurance, service and maintenance and, of course, the manufacturing cost of the car. Now the car owner is faced with the immediate cost of running the car on a day to day basis.

Of course, driving habits would be transformed. It would not suit everyone but it would persuade a lot of people who want the security of having a car around to keep the use of it to a minimum. The price of the petrol would have to be balanced against the cost of the car.

The Government could make a contribution immediately by abolishing car tax and increasing fuel taxes to offset the loss of revenue. This would have the added benefit of doing away with an absolutely pointless and tedious administration system.

The cost of insurance could also be included in the fuel cost although this could throw up problems of dealing with drivers with bad driving records. Perhaps the first £200 of each driver’s insurance could be raised through fuel taxes and the rest directly from the driver.

The point is that public transport will never be able to emulate the flexibility of private transport and that at present the car has so many advantages.

Putting the real cost of using a car before the commuter might change a lot of minds and, incidentally, is a lot more democratic than road pricing where a flat rate will have to be paid to get into the city centre.