The impact of COVID-19 on cost outlays for car and public transport commuting - The case of the Greater Sydney Metropolitan Area after three months of restrictions

Abstract

This paper estimates the short-term reduction in money and time costs associated with a reduction in car and public transport commuting activity in the Greater Sydney Metropolitan Area (GSMA) during a period of the COVID-19 pandemic in which Australia started to see an easing of restrictions (see Beck and Hensher 2020a). As of late May 2020, three months after COVID-19 resulted in restrictions in Australia, we saw an annual travel time reduction for car and public transport commuters in the GSMA of $5.58 billion, representing a 54.02% reduction in the Pre-COVID-19 total time costs, much of which we would suggest can be associated with reductions in congestions costs. Adjusting further for reduced employment volumes relative to pre-COVID-19 levels, to take into account reduced commuting activity due, in part, to a lower volume of work associated with a loss of employment or lower employment hours, the annual time cost reduction for all commuters who still have regular pre-COVID-19 levels of employment are estimated as $4.4 billion. Hence there is $1.17 billion worth of reduced time costs associated with significantly reduced employment hours, including a loss of employment. The implications for road investment linked to congestion in particular is profound, and shows how much of an increase in benefit to society, through congestion busting, can be obtained by more flexible work arrangements, even allowing for some switching into car out of public transport. Whether the current decrease in travel costs will be long-lasting is unknown, but it does support the appeal of working from home, if it is sustainable, as a policy lever to reduce levels of congestion on the roads and crowding in public transport.