Carpooling cost sharing calculator

Link to the calculator: http://mxz-schwarz.github.io/carpool.

Most cars in rush hour traffic carry a single passenger. It is a glaring inefficiency. If people who live and work near each other start carpooling, there would be less traffic, less pollution and the cost of commuting could be cut in half. Sophisticated carpooling platforms are needed to make it easy for commuters to coordinate carpools. According to current regulations carpooling is legal as long as the driver does not make a profit from a ride. However, it is open to interpretation what it means for carpooling to be not for profit. For instance, the IRS allows 70 cents a mile reimbursement for business use but only 14 cents a mile for charity use of cars. Ostrovsky et al (2025) argues that a less ambiguous regulatory regime is needed in order to encourage tech companies to invest into creating carpooling platforms. A favorable and transparent regulatory regime for determining what constitutes not-for-profit (and hence legal) carpooling is needed in order for well developed carpooling platforms to emerge. We believe that the most appropriate regulatory regime would provide a public API that would enable anyone to look up the maximum reimbursement rate allowed for a particular route during a particular time of day. To illustrate this point we created a website that takes as inputs origin, destination and the time of departure and returns maximum reimbursement rate. The algorithm for computing maximum reimbursement rate that we propose is the following: (number of miles traveled)[per mile reimbursement parameter]+(tolls for a roundtrip)/2+(expected delay due to traffic)*[cost of time parameter].

It is more reasonable to include roundtrip tolls divided by two because on many bridges the toll is only in one direction, so if the actual toll is used in the formula the carpool for the toll free direction might be “too cheap” and passengers would not be able to find rides in one direction, thus making carpooling impossible. While the per mile reimbursement rate and reimbursement for tolls are rooted in current laws, though the last term does not reflect the current legal reality, it is desirable from the normative point of view. Anything that could be done to incentivise carpooling during rush hour should be done because (in the context of classic bottle neck model) when traffic delays are t, the benefit to society from removing a single car from the road will reduce combined time spent in traffic by all other motorists by t. That benefit is spread among thousands of motorists. Thus, adding this term to the formula for reimbursement makes it possible for the driver to be paid the amount that he “saved” for the community of motorists by taking on a passenger. Of course, there is a reason why regulators only allow not-for-profit carpooling: from a public policy point of view it is important to have a regulatory framework that prevents for profit drivers avoiding rideshare regulations by pretending to be carpoolers (rideshare drivers do not reduce traffic, carpoolers do). Traffic delays are costly for rideshare drivers, hence, the above formula guarantees that carpooling remains not-for-profit in the sense that a professional driver could not make money by pretending to be a carpooler.

As an illustration, this web page uses the cost per mile of 70 cents (consistent with IRS guidelines) and the cost of time used for the formula was $15 per hour. Tolls were set to 0 since the API being used doesn’t support them.