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

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

April 30, 2025 - Diana Ionescu

Close-up on Canadian flag with Canada Parliament building blurred in background.

Canada vs. Kamala: Whose Liberal Housing Platform Comes Out on Top?

As Canada votes for a new Prime Minister, what can America learn from the leading liberal candidate of its neighbor to the north?

April 28, 2025 - Benjamin Schneider

Hot air balloons rise over Downtown Boise with the State Capitol building visible amidst the high rises.

The Five Most-Changed American Cities

A ranking of population change, home values, and jobs highlights the nation’s most dynamic and most stagnant regions.

April 23, 2025 - GoodMigrations

Conductor walks down platform next to Amtrak train at station in San Jose, California.

Op-Ed: Why an Effective Passenger Rail Network Needs Government Involvement

An outdated rail network that privileges freight won’t be fixed by privatizing Amtrak.

15 minutes ago - Streetsblog USA

Aerial view of flooding during Hurricane Helene in North Carolina.

‘Quality Work, Fast’: NC Gears up for Homebuilding After Helene, Trying to Avoid Past Pitfalls

The state will field bids to demolish, repair and rebuild homes in the mountains. After struggles in eastern NC, officials aim to chart a different course.

1 hour ago - NC Newsline

Washington

Washington State’s Parking Reform Law Could Unlock ‘Countless’ Acres for New Housing

A law that limits how much parking cities can require for residential amd commercial developments could lead to a construction boom.

May 1 - Streetsblog USA

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.