With drivers in our world’s worst traffic cities wasting more than 60 hours in traffic last year, the frustrating impact of traffic congestion on our time has been known for some time. However, new research we just completed shows there’s a hidden cost to traffic congestion that shows gridlock on the world’s roads is more than just an inconvenience on our time – it drains our wallets and our economies.
Our latest report, The Economic and Environmental Cost of Traffic Congestion, reveals that traffic congestion drained the economies of the US, UK, Germany and France of more than $200B last year. In the US alone, traffic congestion robbed the economy of $124B last year – enough money for every person in the city of San Jose to purchase brand new, fully loaded Tesla Model S P85D. At the individual level, the cost last year averaged anywhere from $1,736 per household in the US to more than $2K per household in the UK, France and Germany. These numbers are a measure of both the direct costs in terms of the value of drivers’ wasted time and fuel idling in gridlock as well as indirect costs to U.S. households resulting from businesses passing these same costs on to consumers in the form of higher prices for goods and services.
What’s worse is the data shows that without significant action this cost is expected to increase almost 50 percent over the next 17 years to $291B in 2030. In the U.S., the cumulative cost of congestion from 2013-2030 will total $2.8T – a number that matches the total amount American’s paid in U.S. taxes last year. Of the four countries analyzed in the study, the UK economy is expected to see the largest overall increase in the annual cost of congestion rising from $20.5B in 2013 to $33.4B in 2030 – an increase of more than 60 percent! In the UK’s worst traffic city, the cost of traffic congestion on individual households in London is expected to grow from $4K last year to more than $6K in 17 years’ time. The numbers are similarly staggering in the worst traffic cities in each of the countries we analyzed as the following table illustrates:
These costs are driven by a variety of factors that includes GDP growth, urban population growth and a continually increasing number of vehicles on our roads. While the report goes into greater depth on these cost drivers, data from the U.N. and other organizations shows that people are moving to our largest urban centers in greater numbers. As population and job growth fuel these economies, it drives consumer spending which results in more traffic on our roads as people buy cars, go shopping or for a night on the town and businesses manufacture and ship more products to market.
As much as traffic congestion trends can provide us with a barometer of the health of our economies, it’s also a drain on economic growth as billions of dollars go wasted on gas in traffic, money not spent elsewhere in the economy. This is compounded by the fact that impacts of traffic congestion on the manufacturers and distributors of goods and services gets passed on in the form of higher prices on our daily purchases.
So what are we supposed to do? Should we really relish in the pain we feel everyday as we travel our own personal highways to hell as a sign of economic bliss – even if it comes with its own hidden tax?
Whatever the solutions may be—extra capacity through better transit and autonomous vehicle technology, coordinated signal timing of traffic lights using real-time data, navigation apps and in-car solutions that help people move between modes of transportation as traffic conditions merit, we will not unclog key roads by adding lane miles alone. Time and again, it hasn’t worked. If traffic congestion continues to increase as the study predicts the 10-day long traffic jams in China and 2-3 hour daily commutes drivers face in São Paulo Brazil could become a reality for drivers in Europe and North America in the not so distant future.
Whether it’s self-driving cars or intelligent transportation systems that better use our existing infrastructure to move people and commerce across our transportation networks, our future roads will not be built with concrete as much as they’ll be built with software. Through breakthroughs in crowd-sourcing, connectivity and big data, technology is rapidly transforming a world we once measured in miles to one we can measure in minutes.
As the old saying goes, “You can’t manage what you can’t measure.” The historical archive of the real-time traffic data used to create this latest round of research today also opens up new avenues for industry and government to tackle the never ending, drive -time problem. The goal — move people and commerce across our existing road and public transportation networks as efficiently as we move data across IT networks today. With a complete view of traffic congestion across the network, automakers and mobile app providers are able to provide drivers with the best route, fastest travel time and expected arrival from all possible roads and routes in the connected car. Governments have a similar opportunity through smart cities applications and services to harness the power of real-time insight and predictive analytics to build robust intelligence into America’s transportation networks.
Until then, we can sit idly by debating the individual, economic and environmental costs of traffic congestion or we can accept the fact that regardless of how you measure it, the implications of following the status quo are just too big to ignore. Let’s stop the debate and start applying what we’ve learned from building the information superhighway in the virtually to building smarter transportation networks in the real one.
INRIX and Cebr will be hosting a Webinar at 11 a.m. ET on Thursday, October 16 where Cebr’s lead researcher and INRIX executives share the results of the study in greater detail as well as discuss the implications for industry and government in addressing this growing issue.