Pothole Economics

Let’s start with a business.

Business owners spend an enormous amount of time and money thinking about the customer journey. They advertise. They post on social media. They build websites. They put up signage. They train employees.

They worry about customer service, accessibility, convenience, curb appeal, product selection, pricing and whether someone can find the front door without needing a search party.

All of that effort is designed to make it as easy as possible for a customer to choose them.

But sometimes the customer journey starts before someone ever walks through the door. Sometimes it starts in the parking lot.

And if that parking lot requires the driving skills of someone competing in an obstacle course, there may already be friction in the experience.

Research published in Transportation Research Part A: Policy and Practice found that vehicle access and parking convenience influence where consumers choose to shop and their patronage behaviour.

That does not mean one pothole automatically equals one lost customer. There is no scientific formula that says Pothole No. 4 beside the cart return cost you exactly $327 last Tuesday.

But convenience matters. And inconvenience creates friction.

Maybe someone pulls in, sees the condition of the parking lot and decides they do not want to navigate it. Maybe someone with mobility concerns chooses somewhere easier. Maybe a customer comes once and simply does not come back. Maybe they decide to park somewhere else and spend their money there instead.

You probably will not receive an exit survey.

They are unlikely to walk inside and announce, “I would have purchased something today, but your parking lot has personally offended me.”

They just leave.

And that is where pothole economics gets interesting.

Say, purely as an example, your average customer spends $20. Lose just one $20 transaction per business day over 300 operating days and that represents $6,000 in potential gross sales.

Two customers a day?

$12,000.

That is not a claim that your pothole is costing your business $12,000. It is simple math showing how quickly a very small amount of customer friction can turn into a much larger number.

Suddenly dealing with the problem sooner does not seem quite so expensive.

Because the cost of a pothole is not necessarily just the cost of filling it. Sometimes it is the customer who never made it through the door.

Before This Gets Heated, Let’s Thaw Out for a Minute

There is some irony here.

The freezing and thawing that comes with living in the north is also helping create the problem we are discussing.

Water works its way into cracks and the materials beneath the pavement. When it freezes, it expands and can push and crack the pavement above it.

Then comes the thaw.

The underlying material can become wet and weakened, reducing the support underneath the pavement. Then traffic repeatedly travels over that compromised surface until eventually the pavement begins to break apart.

In other words, winter starts the fight, thaw season weakens the opponent, and traffic comes along to finish the job.

The thaw, by the way, has been quietly complicit in this entire article.

Interestingly, B.C.’s own Asphalt Pavement Maintenance Guide identifies drainage improvements as one of the most cost-effective ways to address frost-heave problems.

So what looks like a pothole problem at the surface may actually have started somewhere deeper.

Which feels oddly philosophical for a story about pavement.

The Crater Cost

Then there is the cost most of us think about immediately.

Our vehicles.

Tires. Rims. Alignment. Steering. Suspension. And possibly a colourful addition to our vocabulary.

Pothole impacts can damage tires, wheels and suspension components, while trying to avoid them can create problems of its own when drivers brake suddenly or move unexpectedly around deteriorating pavement.

Anyone who has hit one badly knows the immediate internal checklist.

What was that noise? Is the tire still round? Did I bend something? Why is the steering wheel suddenly getting this much attention? How much is this about to cost me?

And even when we do not hit them, we adapt around them.

We know which side of the road is better. We know which entrance into a parking lot to use. We recognize the bad section before we recognize the street sign.

There are probably potholes some of us know more intimately than people we went to high school with.

Eventually, manoeuvring around them becomes normal.

And maybe that is worth thinking about too.

Because a pothole does not necessarily need to be hit to have an effect.

What About the Street You Live On?

Now take that same idea outside the parking lot.

What about the street you live on? What about the neighbourhood? What about the whole community?

Roads are part of the first impression of a neighbourhood in much the same way a parking lot can be part of the first impression of a business.

When someone is looking at a home, visiting an area, considering a commercial property or simply driving through a community, the infrastructure around it becomes part of what they see and experience.

There is research examining the relationship between road condition and property values, although the findings are not strong enough or consistent enough to say that one pothole automatically removes a certain percentage from the value of your home.

But the question itself is worth asking.

If two homes are otherwise similar, does the condition of the street influence how someone feels about where they are buying?

Does a rough, neglected-looking commercial area change how someone perceives the businesses within it?

Does infrastructure affect how visitors perceive a community?

At some point, this stops being about one tire hitting one hole.

It becomes part of how we experience the places where we live, work, invest and spend money.

A Hole Lot of Money

Then we arrive at what might be the biggest cost of all.

Waiting.

Pavement deterioration does not politely remain exactly where we left it.

Water continues entering cracks. Traffic continues travelling over weakened areas. Edges continue breaking apart. Failures grow.

A relatively small maintenance problem can eventually become a substantially larger repair.

And this is where potholes stop being annoying and start becoming expensive.

Research reviewed by the U.S. Federal Highway Administration found pavement-preservation studies reporting approximately $4 to $10 in future savings for every $1 spent on preservation over the life of pavement.

That does not mean every dollar spent today automatically saves ten tomorrow.

Roads are different. Materials are different. Traffic volumes are different. Conditions are different.

But the underlying principle is difficult to ignore.

Maintaining pavement while it is still in serviceable condition is generally less expensive than waiting until substantial failure occurs.

And there is another factor working against waiting.

Nothing appears particularly interested in getting cheaper.

Canada’s inflation framework targets 2 per cent inflation over the medium term.

In other words, the economic goal is not for prices to steadily roll backward year after year.

Labour costs change. Materials cost more. Equipment costs more. Transportation costs change.

Meanwhile, the crack has not been sitting there patiently waiting for the economy to improve.

It has been busy becoming a pothole.

So waiting can potentially work against us twice.

The physical problem gets larger. And the eventual cost of fixing it may become larger too.

For a business owner, that could mean the difference between maintenance today and a much larger parking lot project later. For someone maintaining a private road or driveway, the principle is similar.

For communities responsible for kilometres upon kilometres of roadway, the numbers become substantially larger.

Obviously, not every pothole can be addressed immediately.

Budgets are real. Weather is real. Labour is real.

And deciding what gets repaired, preserved, resurfaced or reconstructed is considerably more complicated than those of us swerving around the problem might appreciate.

But it still leaves a worthwhile question:

At what point does putting off the repair stop saving money?

A Better Road Forward

I wholeheartedly believe there is a better road forward.

Pun absolutely intended.

And I have a hard time believing our only option is to become increasingly skilled at avoiding the same holes.

Maybe the solution is not simply getting better at filling potholes.

Maybe it is better drainage. Earlier crack sealing. Better materials. Better reporting. Preventative maintenance. Better timing.

Knowing when a patch is appropriate and when repeatedly repairing the same spot is telling us there is a larger problem underneath it.

Maybe there are communities, businesses, engineers and contractors already doing this exceptionally well.

I want to know what they are doing.

Because the cheapest pothole may ultimately be the one that never gets the chance to become a pothole.

I started looking into all of this because I hit one hard enough to taste bile, immediately apologized to my car and then conducted a roadside inspection with absolutely no qualifications whatsoever.

I came out the other side realizing potholes are about considerably more than a rough drive.

They can affect the customer who decides not to stop. The business that never knows why.

The driver paying for a repair. The homeowner looking at their street. The impression someone forms of a neighbourhood. The community trying to maintain infrastructure with finite resources.

And whoever eventually pays to repair something that may have been cheaper to deal with earlier.

That is pothole economics.

And once you start adding it all up, it really can become a hole lot of money.

Maybe instead of getting better at swerving around the problem, it is worth asking whether there is a smoother way forward.