Do you really use it? THE CAR MATH.
Let’s take an example (Illustration) to take a look at the economics involved in owning and not owning a vehicle. This Practitioner does not own (and have never really owned) a car. This example is based on the Practitioner’s life-experience and circumstantial knowledge of current state-of-affairs. The numbers in this example are not really that important. The idea and the underneath philosophy portrayed in this example are the essence of it. >> A person buys a car by spending 5, 00,000 INR. He (she) uses the car over a span of 8 years and sells that off for 1, 00,000 INR. INR 5, 00,000 spent today is worth INR 5, 00,000, today. However, INR 1, 00, 000 realised after 8 years is worth INR 40,000 or less, today. So, the 'net present capital expenditure' in this case is INR (5, 00,000 – 40,000) = INR 4, 60,000. Suppose, the amount spent on Servicing, Repair, Insurance, Taxes and Fuel is X. For simplicity, let’s assume an amount equal to (X/8) is spent every year on Servicing, Repair, Insurance, Taxes and Fuel.
Now, let’s take a closer look. 8 Years = (8 x 365 x 24 x 60) = 4,204,800 Minutes! (We have not considered leap-years for simplicity). In this example, the owner of the car has paid INR (4, 60,000 + X) for 4,204,800 Minutes of ownership. On an average, the owner uses the car for about 3 hours every day. That is, 180 minutes every day. Total utilization over the period of 8 years = (8 x 365 x 180) = 525600 Minutes. Total minutes of ownership paid for and NOT used = (4,204,800 – 5, 25,600) = 3679200 Minutes = (((3679200/60)/24)/365) = 7 YEARS!! That means, the owner of the car pays for 8 years of ownership and the car is actually used for one year. Just 1 year! The car spends 7 years parked in parking lots or repair-workshops!
In this example, the actual capacity utilization = ((1/8) x 100) = 12.5%! Let’s take a look at the practical capacity utilization. Let’s assume a normal downtime to the extent of 20%. That is, for 5 hours of run, there is 1 hour of down (cool off | repair | overhauling | rest) time. 20% is a reasonably sizable portion. Net available capacity = Total Capacity - Normal Downtime = (8 – (8 x (20/100))) = 6.4 years. Practical capacity utilization = ((1/6.4) x 100) = 15.625%. That is still way low! In summary, the owner of the car pays for 6.4 Years of practically usable capacity and uses the car only for a year! That is, not so smart! In this example, the owner of the car spends INR ((4, 60,000 + X)/525600) = Y (per minute). Note: One may replace X with the exact value (number) to arrive at Y, in the context of any specific case.
Usually a regular car is designed to accommodate 5 persons. And, usually when it is used, it is not used with the full passenger-capacity. It is very common to see that most of the cars, on our roads, transporting 1 or 2 people most of the time (Cars with all seats occupied are relatively rare to find on our roads!). To retain the strength of this example, let’s assume that the car is usually driven with 2 people including the driver, over the course of those 8 years. Now, what is the effective practical capacity utilization? Let’s calculate. The effective practical capacity utilization in this case = ((15.625%) x (2/5)) = 6.25%! Believe it, or not!
How does this go in case of a Lean Living Practitioner? A Practitioner usually tries his best to stay away from owning a car, tries hard to find a residential accommodation close to the workplace and other amenities | facilities | utilities (Banks, Hospitals, Shopping Centres, Parks, Bust Station, Train Station etc.). So, a Practitioner hires a car (Taxi | Cab) in case of a need and pays for the actual extent of utilization only! Usually, a Practitioner uses his legs (or a bicycle, wherever possible!) to cover a short distance and public-transport-services for longer distances; ultimately, using a car or any other vehicle very infrequently. For a Practitioner, the benefits of his life-model to the society and the environment are more rewarding than the conveniences material acquisitions can offer. While a non-practitioner uses a personal car or vehicle for a span of 4,204,800 Minutes, a Practitioner usually uses a rented car or a vehicle over a span of (4,204,800/10) Minutes, or less, over the span of those 8 years. And, the average human-life is much longer than 8 years. So, the cumulative benefits offered by a Practitioner’s life-model, throughout the Practitioner’s life, to the mankind, society and the environment are truly tremendous. A Lean Living Practitioner takes pride in his (her) life-model and inspires others to be a part of the club!
The numbers and the calculations presented here are not particularly very important. The idea and the message, however, are. And, it's indeed wonderful to see that Ride-sharing and Carpooling like concepts are gaining popularity and momentum. NEXT >>
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