Israel Railways cuts costs for drivers, society - research

Israel Railways
Israel Railways

Traveling to work by train instead of by car has major savings, finds a study by the Israel Railways economic division.

Traveling to work by train instead of in a car saves tens of thousands of shekels a year, according to a new study by the Israel Railways economic division. The study takes into account the prices that went into effect following the rate reform and the lowering of VAT on public transportation.

The cost of traveling by car is born by the entire public, not just the drivers. Other countries deal with this problem by creating a complete public transportation system that includes subways, light rail, buses, service taxis, bicycle paths, and demand response transportation (DRT). Israel, which is decades behind the rest of the industrialized world in public transportation, is now trying to encourage rail transportation through a rate reform that has lowered prices for many travelers.

The Israel Railways economic division, which probed the savings for passengers purchasing a monthly ticket, took into account that passengers would not easily abandon private vehicles. Its calculations are relevant for people parking their cars at a station and continuing from there to work by train. The study did not take the cost from the target station to the workplace and the additional time required into account, because according to the survey authors, most travelers work within walking distance or a bus ride away from the station, and the trip does not cost anything extra.

The author of the survey was Israel Railways vice director economics, finance and agreements Keren Aslan, who also led the negotiations with the government on a new agreement for the company and the company offering, and who recently received an award for excellence from the CFO Forum. Aslan explained, "Calculation of the costs in the study was only for traveling to and from work. Obviously, if the monthly pass is used for additional journeys, instead of traveling in a car, more is saved." She added, "The saving does not take into account the fact that people traveling to work by train arrive more relaxed, calmer, and on time." In this context, she mentions the accident that occurred today on the coastal road, following which the police closed two lanes to traffic. "Anyone who drove to work in a car today certainly arrived substantially late," she stated.

Savings for those with company cars

What saving is involved? According to the study figures, traveling by train from Ashdod to Tel Aviv and back, for example, saves passengers more than NIS 38,000 a year. The total saving is composed of the cost of the journey (NIS 13,000) and the saving in time (NIS 25,000 if a person works during the journey, or NIS 1,760 if he does not). Traveling from Rehovot to Tel Aviv by train saves NIS 31,000 a year: NIS 11,000 for the cost of the journey and NIS 20,000 in time (working on the train). Traveling by train with a monthly pass from Tel Aviv to Beer Sheva and back saves over NIS 79,000, and traveling by train with a monthly pass from Netanya to Tel Aviv and back saves a little less than NIS 30,000.

The Israel Railways economic division also compared the cost of traveling by rail to traveling in a leasing car or in a private vehicle for which the driver receives reimbursement of his expenses from his employer. The saving in this case is also significant, because of taxes paid on the benefit (the amount deducted from the gross salary of each employee with a company car). Traveling from Tel Aviv to Ashdod and back, the saving is NIS 30,000 a year (including working during the train journey).

These figures are also relevant, in view of the argument by former Ministry of Transport chief scientist Dr. Amir Ziv-Av, who says that in addition to value of use paid by leasing car drivers, these cars also have a negative effect on the economy. According to Ziv-Av, leasing cars are driven twice as much as privately owned cars. He calculates that these cars account for 5% of all road accidents, air pollution, and road congestion.

Published by Globes [online], Israel business news - www.globes-online.com - on March 13, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

Israel Railways
Israel Railways
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