Mobility-on-demand pricing versus private vehicle TCO: how cost structures hinder the dethroning of the car

Tobias Kuhnimhof () and Christine Eisenmann ()
Additional contact information
Tobias Kuhnimhof: RWTH Aachen University
Christine Eisenmann: German Aerospace Center

Transportation, 2023, vol. 50, issue 2, No 12, 707-731

Abstract: Abstract This study uses a unique dataset on the cost of motoring in Germany to analyse cost competitiveness of emerging mobility-on-demand (MOD) services. Previous studies have focused on comparing current and projected MOD prices with the average cost of private motoring. This study quantifies which proportion of private car travel would actually turn out to be costlier than MOD given that MOD costs drop below certain levels relative to the cost of private motoring. In this context, not the average but the distribution of the costs of motoring are the key issue. These costs are strongly skewed across the cars in private households when including new and old vehicles: a large proportion of private car kilometres are driven at relatively low cost. The study uses simplified scenario settings with MOD price levels ranging from 0.1 €/km to 1.5 €/km to make predictions of hypothetical modal shifts under the assumption that car user switch to the most economic mode of travel. These modal shifts serve as an indicator of MOD cost competitiveness. The results indicate that MOD prices would have to drop to 0.5 €/km or lower to have a notable impact on use of the private car if cost was the key mode choice criterion. Only if MOD prices drop down to a level of about 0.3 €/km—quite possibly a lower boundary for automated MOD—MOD-enabled mobility packages would be the less costly alternative to the private car for a substantial proportion of mileage. However, even at that MOD price level, the private car would still be the most economic option for the majority of today’s car user kilometres. Our findings illustrate that the skewed distribution of the cost of owning and running private cars—where many of those who drive much drive inexpensively—substantially dampens the disruptive potential of MOD. While we use data from Germany to illustrate this, many of our findings are more widely applicable.

Keywords: Mobility on demand; Private car TCO; Cost distribution; Modal shift; Cost of motoring; Vehicle automation (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11116-021-10258-5 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:transp:v:50:y:2023:i:2:d:10.1007_s11116-021-10258-5

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/11116/PS2

DOI: 10.1007/s11116-021-10258-5

Access Statistics for this article

Transportation is currently edited by Kay W. Axhausen

More articles in Transportation from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().