The values of travel time and reliability with automation

Abstract

Advancement in mobile devices is allowing airline and public transit passengers to undertake useful and productive work activities while travelling. Car passengers are also bracing for the introduction of automated vehicles which could relive them from driving and allow them to perform other activities while travelling. The potential productive utilisation of in-vehicle time is not considered in the theory of the value of time where time spent travelling is treated as a ‘wasted time’. In this paper, we extend the theory of the value of time to analyse car commuter’s optimal allocation of time among different activities and the implication of allowing a productive use of in-vehicle time on the valuation of travel time and reliability. We showed the existence of an optimal time allocation and found the value of travel time and reliability declining with an exogenous improvement in the productivity of in-vehicle time if the commuter is not highly risk averse. Results in the paper also indicate that, in the absence of binding time constraints, individuals will be unwilling to pay for a reduction in travel time and an improvement in reliability if in-vehicle time is as productive as time out of the vehicle. This has important implications in economic appraisal of investments in transport infrastructure and productivity enhancing technologies.