Travel costs are made up of many components that in turn vary according to numerous factors.

Use vs availability costs

The costs associated with transport can be divided into two overarching categories: use costs and availability costs. This distinction is important for policymakers to consider because the two types of costs are perceived and experienced differently and so have different impacts on transport behaviours.

Use costs refer to the charges associated with using a transport mode to undertake a given journey, such as the cost of train fares or destination car parking charges. Typically, these costs are encountered on a per journey basis, but some use costs (such as fuel costs) are encountered less frequently. Evaluating the potential impact of policies targeted at use costs is typically straightforward as the benefits (or disbenefits) to the individual are cumulative. That is to say that the less they engage with a given travel behaviour, the more money they save (and vice versa).

Availability costs are the costs associated with having access to a given transport mode – for example, the cost of owning a car or bike, or the cost of a car club subscription. Availability costs are typically encountered infrequently, on an annual or multiyear basis, although some can be more frequent (such as monthly finance payments). The potential impact of policies aimed at increasing availability costs is not so straightforward to predict. This is because whilst high availability costs should disincentivise people from paying for access to a given transport mode, they may also mean that those who do choose to pay the higher cost are incentivised to use that transport mode more frequently to get their money’s worth.

For some transport modes, such as public transport or shared bikes, use costs are the only component making up the cost of a journey. But for most modes, the total cost is made up of a combination of both types.

Factors that influence the costs

Some of the costs associated with travelling are specific to the journey that is being undertaken – for example, the distance of a journey, the time of day when it is taken (e.g. peak or off-peak) and the destination.

Other factors depend on the characteristics of the individual undertaking the journey, such as age, housing type or employment status. Age directly influences the costs of using public transport via concessionary schemes. Some financial incentives are means tested or based on employment status, such as the cycle to work scheme.

Other elements, such as the place where people live and the type of housing, can also impact travel costs. For instance, people with space to store their bike or park their car may have a lower travel cost.

Other factors are linked to the way people pay for a service. Pay as you go or subscription are the two main models used by transport providers in London. This influences the price for the end user, and it can also influence the way people engage with a service (e.g. people can try to maximise their use of a service when they have subscribed to it).

Walking and travel cost

Encouraging a greater take-up of walking is key to achieving the modal shift that London needs. Not only is walking the most sustainable travel mode, it also offers an abundance of benefits:

• Boosting high streets and local businesses: walkers are more likely to stop in a local shop than drivers. A TfL study found that people spend on average 40% more when they walk to their destination than when they drive. ¹¹
• Improving people’s physical and mental health: it’s estimated that the NHS could save £1.7 billion if every Londoner walked for 20 minutes each day. ¹²
• Reducing air pollution and traffic by reducing driving, and reducing overcrowding on public transport by encouraging people to switch to walking.
• Saving people money: walking is the least expensive mode of transport. Improving London’s walkability is one of the most effective transport strategies to support people with the cost-of-living crisis.

Because walking has no monetary costs associated with it, it isn’t addressed directly in the following analysis. However, more walking can be encouraged by policies to disincentivise journeys that are otherwise walkable.