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Promoting Telecommuting During the Gas Dearth?
Oren F. asks: "The President of AeroAstro, Inc., a small aerospace company, has begun promoting his employees to conserve gasoline during these times of high prices by telecommuting to work each day from their homes at least once a week. How is your company responding to the current situation?"
"Forget it"
-- Is "Sig" copyrighted by www.sig.com?
Prices in the UK aren't high because of economics. They're high because an unreasonably high percentage (up to 75%) of the total price comes from taxes.
A prius does not cost $50,000. My mom bought one a few years ago and it was just a tad over $20,000.
At the time though, I thought it was a silly purchase from an economical perspective as she only drives 7,000 miles a year. Even now, with the gas prices going up, it's questionable whether the cost differential between that and a nice corolla and the increased risk of abnormal maintenance needs is worth the gas savings. 7000Mi/y / 30 MPG = 233 G. The Prius @45MPG could cover the same distance in 156 G... so you only save 77 G. $144 ($2/G) then, $231 ($3/G) now per year. If you keep the car for 8 years and gas prices remain constant, your only looking at around $1000-2000 in gas savings over the life of the car with low mileage driving patterns.
That said, many people drive 20,000 miles per year, and for them, the 3x ($3000-6000) savings may be worth it or at least around the break even point.
I think my mom bought the car for its environmental friendliness and its coolness factor rather than any perceived economical savings. There are probably other much cheaper more effective ways to help out the environment, but one can hardly argue with the coolness factor.
If you are thinking about doing an engine mod to save money, you should run the numbers before investing $10,000 into your car. In particular, look at the expected lifetime of the car and your cost savings per year. Also, it might not be a bad idea to take into account the interest you could earn on that $10,000 over the lifetime of the car. Eg, if the life of the car is 8 years, and you invest 10K at the beginning, well, that 10K earning 10% interest could pay for $1,000 worth of gass per year ($1,000/yr / $3/G * 30Mi/G = 10,000 Mi/yr... and you get to keep the $10,000.
Some of the European posters have commented about options such as walking, bicycle, or public transportation. If you live in a metropolis here in USA, then those are viable options.
I live in one suburb of a small city and work in a different suburb of the small city. My commute is about 25 miles one way, 95% highway, which burns about 1 gallon of fuel.
Walking or cycling are not options, neither is public transportation (doesn't go where I go).
The only other option is car pooling, which is nearly impossible with a variable schedule including meetings at other locations that require a drive, picking up kids at day care, etc.
There's also a growing trend here in the states of people moving further away from cities into rural farming areas.
So keep in mind that some Americans have vastly different circumstances. That isn't an excuse to drive some monstrosity that gets 10 MPG though.
The taxation rate in the UK is indeed high, but I am amused at the implication in your post that taxes have nothing to do with economics.