eBusiness Weekly
The real cost of the new commuter rank system
Clive Mphambela
Just how many hours does the average black Zimbabwean spend on per day going to and from work? What is the cost of the commune in dollars terms, per day, per week per month? What is the economic cost of commuting in terms of productivity lost and financial cost? What are the welfare implications of long and costly commutes?
These are just some of the serious questions that economic advisors to the Harare City Council and policy makers must have had answers to before they implemented the drastic, if not dramatic measures to alter the commuting patterns of workers as announced this week.
Long commutes hurt both workers and businesses in terms of time and financial costs. Ultimately long commutes are bad for the economy at large, as they generally result in “dead weight loss”, that is lost potential GDP or welfare that accrues to no one. However, the laws of economics say that whenever there is a cost, someone is paying. There is never a free lunch.
Are we going for policies that Tax the Poor?
Economists have argued that the poor bear a disproportionate burden of the social and financial costs of long commuting times. These costs are akin to the lower income earners, who rely on public transportation systems, paying additional taxes. The new system will thus in my view worsen the burdens of the lower income earners. Let’s see how?
Firstly, the fact that the major commuter ranks have been moved significantly out of the CBD, with commuters expected to pay an additional $0,30 per shuttle trip to and from the CBD to the pick-up points means that the average transport costs for a worker who works in the environs of the city has gone up by a massive $0,60 cents per day.
This is for those who do not cross the city to the suburbs, whose daily fares have just gone up by a massive $1,20 per day ($6 extra per 5day week, or $24/month). This will put the average person’s transport budget up by roughly 45 percent, through this change alone!!! And that is not all. Commuting generally involves a significant cost in terms of time. There is waiting times for the home to rank, you disembark, and wait for a shuttle, which by the way will make several stops in the city. Shuttles are generally very slow in any case, as they stop frequently to drop off passengers. Before you know it, commuting times are going to almost double. And all the while someone said to me, “Time is Money”, right?. A 45 percent increase in cost of fares is no mean change, with annual currently inflation running at an “official” 3.52 percent, this will surely take quite a chunk of consumers’ incomes.
By my off the cuff estimates (not scientific at this stage) the average Harare worker will now spend 68 minutes per day commuting to and from work. This is just a bit lower than double the average commute time in both, the United States (measured in 2002), a country known for its long commuting times, and Hungary, a European Union country known to have the longest commute times (Stutzer and Frey 2008).
Closer to home in South Africa, the average commute is 102 minutes for black South Africans, with white South Africans spending less time commuting to work than black South Africans at 68 mins per day, according to the 2013 South African National Travel Survey.
Why we should be worried about rising commuting costs?
At the social level – because of the demographic groups that are largely affected by these costs – rising costs of transportation mean that any economic growth registered will not be as inclusive as it would otherwise have been, since it’s usually the lower income workers who are forced to spend larger fractions of their incomes getting to and from work.
Zimbabwean cities, just like South African cities, have historically been shaped to a large extent by the policies of racial segregation which existed for a long time before independence. This simply means that wage paying work opportunities are more often than not, located very far from home, particularly for black Zimbabweans. This is why Harare, has several dormitory towns for instance. As I have already said, this imposes high commuting costs, both in monetary and time costs. Whilst I have estimated the costs using an intuitive, back of the envelope calculation, these seem unreasonably high.
Impact on employment.
High commuting costs increase what economists call “search friction”. This is the cost of searching for paid work. Zimbabwean unemployment is already very high, and we have just added a new dimension to it. If search friction is severe, it actually plays a major in raising unemployment levels due to the fact that job seekers will be located a long way from employment opportunities and thus cannot easily access information about these opportunities.
Low income formal sector workers will pay larger effective taxes on their wages due to long and costly commutes. Long commutes to both formal and informal sector employment disincentivises workers. Some will not be able to bear the extra transport costs and will probably opt out of work. Others will try and pass the costs on to the employers, raising wage pressures.
Finally, let me point out that there is a big disconnect between the policy that has been put out and the infrastructure that is supposed to support it. Commuter shuttles are not at present available and the ranks — both the new pick up points and the city ranks — are not in order. The new ranks have no amenities and the old ranks are in a state of serious disrepair?
The cost of a clean city?
There is however a list of positive arguments that support the city’s decision. Harare is a chaotic and ultimately, the city fathers want to bring order and sanity to the city, starting with the public transport system.
However, it appears critical steps have been missed. Firstly, stakeholders’ consultations may not have been complete, if these have been done, they are not in the public domain. Secondly, I am a firm believer in the fact that Harare especially needs a complete redesign of its public transport network.
A light rail system from Chitungwiza, Ruwa Norton and the Western suburbs is a great idea, supported by a rail ring around the greater Harare. This will even take a lot of cars off our roads, with major positive benefits for the economy in terms of lowering the cost of doing business. Food for thought.
The writer is an economist. The views expressed in this article are his personal opinions and should in no way be interpreted to represent the views of any organizations that the writer is associated with.
