Report: The Price of Driving Doesn't Match the Cost of Driving

The true cost of vehicle and road use is not reflected in the price drivers pay.

2 minute read

October 29, 2015, 11:00 AM PDT

By Emily Calhoun


Pumping Gas

futureatlas.com / flickr

It is widely understood that there are enormous and growing negative externalities associated with motor vehicle use, in the form of pollution, sprawl, and public safety, to name a few. But all too often the American narrative on gas prices is that they are too high. External costs can be hard to measure and challenging to accurately convey to a user group. Perhaps more commonly understood is that the direct costs of vehicle use—namely, the maintenance and construction of roads—is covered by gasoline taxes. A new report from the Frontier Group—in partnership with the U.S. PIRG Education Fund—cracks this myth wide open. The price paid by car drivers does not come close to covering even the direct costs of road use.

"Puncturing the widely held myth that cars pay their own way makes this report required reading for those thinking about transportation finance reform," writes Joe Cortwright.

Federal subsidies to the highway administration system are enormous. "Since 1947, the amount of money spent on highways, roads and streets has exceeded the amount raised through gasoline taxes and other so-called 'user fees' by $600 billion (2005 dollars), representing a massive transfer of general government funds to highways," according to the report.

The price mechanism for road use is not based on a user fee because gas taxes, which are often referred to as user fees, are not necessarily directed to the actual roads the driver uses. In some cases, states subsidize federal highways, in other cases, the federal government has redirected gas tax revenues to pork-barrel infrastructure projects, and with the exception of tolled roads, drivers pay rates based on mileage, not the actual roads they use.

Cortwright argues that if gas prices and other vehicle use fees reflected the true cost of use, single-occupant vehicle use would decrease, as drivers would opt for cheaper forms of travel.

"These facts put the widely agreed proposition that increasing the gas tax is politically impossible in a new light: What it really signals is car users don’t value the road system highly enough to pay for the cost of operating and maintaining it. Road users will make use of roads, especially new ones, but only if their cost of construction is subsidized by others."

Wednesday, October 21, 2015 in City Observatory City Commentary

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Get top-rated, practical training

High-rise apartment buildings in Waikiki, Hawaii with steep green mountains in background.

Study: Maui’s Plan to Convert Vacation Rentals to Long-Term Housing Could Cause Nearly $1 Billion Economic Loss

The plan would reduce visitor accommodation by 25,% resulting in 1,900 jobs lost.

April 6, 2025 - Honolulu Civil Beat

Two yellow and white Dallas Area Rapid Transit light rail streetcars at station in Dallas, Texas.

North Texas Transit Leaders Tout Benefits of TOD for Growing Region

At a summit focused on transit-oriented development, policymakers discussed how North Texas’ expanded light rail system can serve as a tool for economic growth.

April 3, 2025 - KERA News

Blue and white Seattle Link light rail train exiting concrete Downtown Bellevue Tunnel in Bellevue, WA.

Why Should We Subsidize Public Transportation?

Many public transit agencies face financial stress due to rising costs, declining fare revenue, and declining subsidies. Transit advocates must provide a strong business case for increasing public transit funding.

April 7, 2025 - Todd Litman

Amtrak Acela

How to Make US Trains Faster

Changes to boarding platforms and a switch to electric trains could improve U.S. passenger rail service without the added cost of high-speed rail.

3 hours ago - Bloomberg CityLab

Mural showing tools and craft supplies with banner reading 'Things are made here' in front of makerspace in Columbia, Missouri.

Columbia’s Revitalized ‘Loop’ Is a Hub for Local Entrepreneurs

A focus on small businesses is helping a commercial corridor in Columbia, Missouri thrive.

4 hours ago - Next City

Close-up of wood log with emerald ash borer larvae tracks etched in the wood.

Invasive Insect Threatens Minnesota’s Ash Forests

The Emerald Ash Borer is a rapidly spreading invasive pest threatening Minnesota’s ash trees, and homeowners are encouraged to plant diverse replacement species, avoid moving ash firewood, and monitor for signs of infestation.

5 hours ago - The Bemidji Pioneer