Riding alone in a car is an increasingly unaffordable luxury

Perhaps ride-hailing could spare millions of people the cost of owning cars that mostly sit idle, and allow vehicles and roads to be used more efficiently. A recent analysis by Ashley Nunes of the Massachusetts Institute of Technology and Kristen Hernandez, now at Securing America’s Future Energy, an advocacy group, concludes that driving your own vehicle costs about $0.72 per mile (inclusive of ownership costs and expenses such as fuel and parking charges), whereas the lowest break-even fare an operator of driverless taxis could expect to charge is $1.31 per mile. Gilles Duranton of the University of Pennsylvania and Matthew Turner of Brown University posit a “fundamental law of road congestion”: unless road space is priced appropriately, new capacity reduces the cost of driving, thereby inducing more of it, leading, eventually, to renewed congestion.

Source: www.economist.com