Saturday, May 14, 2011

The Trickle Down Effect of Gas Prices

Tuesday I took a trip to Indianapolis, it cost $77 in gas.

I started in Fort Wayne, Indiana where the price of gas was $4.19 a gallon and my first stop was in Anderson, Indiana where I filled up the tank for just $3.89.

When I got to Indianapolis it was $4.17.

Yesterday in Fort Wayne prices varied between $4.02 and $4.15.

My job requires me to drive a car, but not everyone needs to and that is creating a growing alternative market:

Bike, Scooter Sales Pick Up Speed

As gas prices continue to remain high, more Americans are cycling as a way to stay fit, save money, or both.

Sales of new bikes rose 9% in the first quarter of this year, compared with the same period in 2010, and sales of road bikes -- commonly used in commuting -- jumped 29%, says Scott Jaeger, senior retail analyst with Leisure Trends Group, a Boulder, Colo.-based retail tracking firm. Sales of gas-powered scooters are up even more: nearly 50% in the first quarter compared with a year ago, says the Motorcycle Industry Council, a trade group.

"We see spikes when fuel prices rise," says Ty van Hooydonk, the group's spokesman, noting many scooters average 60 to 80 miles per gallon.

When gas prices last peaked in the summer of 2008, Census data show bike commuting rose 15% nationwide from 2007. "We're starting to see the same thing playing out in 2011," says Andy Clarke, president of the League of American Bicyclists, a bike advocacy group.

"It's too early to say definitively that bike sales are up because of gas prices," says Tim Blumenthal, president of He expects gas prices to escalate more and take bike sales along with them.

Also driving bike use is the boom in bike trails and bike-sharing programs, Blumenthal says, adding the federal government has made an "unprecedented" $2 billion investment in trails in the last two years.

Last year, Boston installed 20 miles of bike lanes and New York City added more than 50 miles, says the League of American Bicyclists, which designates 179 communities in 44 states as bike-friendly, up from 25 in 2003. It cites new bike-sharing programs in Denver, Washington, D.C., and Minneapolis.

Regular riders tend to be low-income who cycle to save money or affluent who bike for fitness, Clarke says. Relatively few bike for environmental reasons, he says.

Upper-income leisure cyclists are unlikely to bike to work unless gas hits at least $6 a gallon, says Jay Townley of the market research firm Gluskin-Townley Group.

(Source: USA TODAY, 05/09/11)

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