I think the real problem is that you had expensive cars. No shit you save money when you take ubers rather than owning a BMW M3 and (what I assume) was a decked out wrangler. If you bought a sensible car, your monthly costs could be much lower.
To help quantify this a bit - in 2008 I bought a brand new Honda Fit (cash) for about $17k. Has 120k miles on it now, very low maintenance, few repairs, definitely a budget/economy car. Over 10 years, another $600ish a year in gas (lifetime average of 35mpg), 4 sets of ~$400 apiece tires, ~$80 in oil changes a year, another ~$700/yr in insurance, looks like a TCO of $32k (and I'm sure I'm leaving stuff out). $266/mo is quite a bit more than what this person has spent on Uber.
The big difference is this person is only using ~114 rides/year, whereas just commuting to work I use my car for ~400 rides/year. Add in one out and back weekend trip (ignoring shopping trips through the week etc.) and we're up to 500 rides/year. If my average ride cost were the same as this person ($17.50/ride) I'd be looking at over $700/mo.
I have a Honda Fit and it's a beautiful car. I am in love with it, and I don't think I will ever buy another type of car again. The maintenance costs are ultra low, much lower than my Honda Accord.
But there is no way it gets 35 mpg. I have been keeping track meticulously and the maximum I get is about 30 mpg, and it drops to 27 if I do any city driving. If I do only highway driving, I can get up to 320 miles in a single tank, but I'm driving on fumes at the end. I normally get about 280 miles per tank, which is about 27 mpg at 10.6 gallons.
Also, with my 2011 Honda Fit, I'm at 120k miles. I've had 2 sets of new tires, but no other maintenance besides regularly scheduled maintenance.
So I have also meticulously kept track of my mileage, from January 2013 to November 2017 (my wife began driving it in November, and I didn't have an iPhone app to track it prior to 2013). The current average over that time frame is 36.8MPG. Worst tanks I have are when I was only on the interstate, would get 34MPG.
Mine is an '08 - they seem to have gotten heavier in later years. It also has a manual transmission, which offers more flexibility for conserving brakes and fuel. My wife gets more in the 32-34mpg range, but doesn't keep close tabs on it - she also now has a couple car seats and toddlers in the car, so weight penalty.
EDIT: There might genuinely be an issue with your car - I have a 10.8 gal tank as well but routinely get over 400 miles per tank - 370 if I've been driving more aggressively.
MPG on the Fit depends on how you drive it. It hits max MPG at about 55MPH, if I recall correctly.
Now in TX you have highways with 85mph speed limit (most are 75), and in CA people drive as if the speed limit was 85 anyway - which is how I end up with the same mileage as what you report.
You're right that it's way cheaper, but you did forget to account for the opportunity cost of the $17K up front (about $1700 in interest in a simple savings account, but depending on how you invested it, you may have done better).
> The fit is probably worth more than 1700$ right now.
Yes but the $17K plus the interest would be $18.7K. :)
And like I said, it's still a much better deal than Uber, but the opportunity cost of the up front money is often missed in these types of calculations, and can be significant.
I think you're both making good points here but just to clarify:
I did not account for the interest that could've been earned on that $17k (which could conservatively be $1700, aggressively could've been another $17k).
I also did not account for the residual value of a 10 year old 120k mile Honda Fit, which is probably in the $5k range.
You need to look at pricinciple - expenses + interest for each month on both sides. Consider if he had a pile of money to cover 700$ a month in Uber driving and what would happen on each path.
Besides that it could be argued that buying an M3 is not an economic purchase, it’s an emotional one. Presumably you go into it knowing it’ll have higher than average TCO, that it’s not designed as a commuter vehicle, and you accept the cost because you are a car enthusiast - and taking Uber ain’t your bag.
Hi, I'm Neal, author of this analysis. Yes, you nailed it. I was just thinking today about what older car (2014 or earlier) I could buy for $10,000 or less that had adaptive cruise control and lane assist. That would allow me to disengage mentally a little from driving without suffering depreciation. Is there a way to search for what's the oldest car (e.g. Civic) that has these features?
Don't knock adaptive cruise control until you try it. It is significantly better than plain-vanilla cruise control. I've found that when I use it, I tend to stop caring about if I'm driving "too slow" -- it makes me a less aggressive driver.
My current car has it. The person you're replying to is still correct, if you need to "disengage from driving" then pull over and take a break.
Adaptive cruise control makes driving less stressful/more pleasant but you still have to be mentally there. No system is full proof, and certainly not at this stage.
I have a feeling this was completely serious. He's a product lead a Google. He's more important than the rest and shouldn't have to pay attention to the road because his mental time is just so damn valuable.
Personally, I have no idea what cars have these kind of features. I know that civics had these features as of lately. I like to have as little technology in my vehicle as possible. I think disengaging in driving is very dangerous. I am not happy with the trend as I love riding motorcycles, but don't want my family publicly shamed by Tesla when one of their camera's overlooks me and kills my ass.
Adaptive cruise and lane assist weren't available in "cheap" cars in 2014. You'd have to look at something like a 2014 BMW 5 series, which would run you about $20K.
You can get a model year 2017 (first year it came standard) Toyota Corolla with adaptive cruise control and lane assist from about $11k and up, according to a quick AutoTrader search.
> If you bought a sensible car, your monthly costs could be much lower.
$12,041 over 6 years is $2006 per year, which is about $167 per month.
All of my friends pay about that much just for car insurance every month. Throw in a car payment ($200/mo. - $500/mo. depending on the terms of the lease), gas, and maintenance (regular oil changes, tire replacements, etc.) and you'll end up way north of $12,000 after 6 years.
You have multiple friends paying $2K/yr for car insurance? Are they amateur demolition derby drivers?
I pay just over half of that for three cars and two adult drivers. (and in Massachusetts, which does not have a fully open/competitive insurance market.)
Auto insurance rates are greatly variable throughout the US and many people cary more than state minimums. Near $200/mo., is pretty normal in California. My auto insurance, with a perfect record is $3100/yr with a $5 million umbrella for three cars and two adult drivers in Idaho.
Thats pretty good. Can you share a bit more details about your demographics/driving history. I pay ~1600/yr with metromile and i have a good driving history. I'm in SoCal.
Surely - Demographic, ~30 year old male, married. (Getting married didn't drop it as much as I was hoping but did decrease it $150/year.)
Wife and I have not had any traffic infractions in over 3 years.
I haven't had a traffic infraction in at least 3 years (moved to West coast 3 years ago). ~30 year old male, married and are insuring a 2015 Cherokee with $2,500 deductibles.
My advice, if you can set aside $2,500 or have it in savings I would move your deductible up and use insurance for severe accidents. Don't use insurance to replace a cracked windshield.
FWIW, depending on your state and policy, "glass only" claims don't affect your premiums. Agreed with the general principle of a higher deductible though.
Agreed on the state minimums, which are a joke ($20K and $40K I think here).
We carry many multiples of the state minimum, which was needed to secure an umbrella policy for the excess. That doesn't include the umbrella, which we have in place mostly for other reasons (and is cheap).
I'll throw a data point in here: Three vehicles (2014, 2009, 2006), no accidents, rural Midwest. ~$2,000/yr for insurance with standard 100/300/100 coverage.
different states' laws can have a major impact. I have no experience with insurance in MA, but in Michigan 2k/yr per car would be considered fairly cheap. My insurance is routinely near the cost of the car payment itself, and I have a good record and multi-product discounts with my provider.
We definitely have a problem here in this state though.
I once had a payment to an insurance company lapse, so I was technically without coverage for one month. Because of this, all insurance providers insisted the bare minimum I could pay for any auto insurance was $400/month. Then I got a speeding ticket, and it went up to $600/month, and then $800/month. That's $9,600 a year, for auto insurance, for one person. (Fuck you, Progressive)
They claimed the rate would stay that way for several years, so I got rid of my car. I was going to get a car again once the rate lowered, but it turns out I didn't need one. Now I'm saving bundles of cash. (So, in a weird, way: Thanks, Progressive)
I used to have to pay several hundred dollars / mo after I had a major accident with a personal injury involved and was in my late teens / early 20s in Washington state. The policy renewals were nearly $3k each time for just myself even under my parents’ policy (I was supposed to not be insurance due to the massive claim the company ate). I’ve heard of a special insurance policy for a basically legally blind driver that gets in accidents frequently that costs $800+ / mo.
Even the most bare bones policy I could find after that dropped off my record was $140 / mo for state minimum coverage at 22.
I paid more than that when I was a teenager because insurance companies assumed I'd be street racing like all teenage boys apparently. It took less than a year to spend more on the insurance than I did on the car. Of course the cost of your own car barely counts in insurance rates, which are dominated by healthcare costs for the people you hit but don't quite kill.
Annoyingly I never made a claim so all of that money was wasted in the end.
Young men get hit pretty hard on insurance prices. It was looking like 100$ per month for me and was enough to push a car payment into the monthly expense range I didn't care to have. I work from home though, so I don't drive a lot and have the luxury of not owning a vehicle. I could take Lyfts everywhere I go and definitely come out ahead of a car payment + insurance.
I have a license and a car, my girlfriend doesn't.
My girlfriend takes an Uber home from work every day right now (I drop her off in the morning then head to work. I'm still at work when she gets off work). It costs her an average of $25 per trip. 25 * 5 days a week * 4 weeks per month = $500/month in expenses. That's for a single 20 minute Uber (usually Lyft now, it's been cheaper) a day, that's it. I'm surprised the OP can get away with $167 in Uber expenses doing without two cars as the OP suggests.
It's about 40 extra miles I drive a day for her also, since her work is in the opposite direction of mine, so tack on the extra maintenance required for 800 miles per month on my car (hasn't been too much yet, but the car is starting to get old... let's say $40/month ), along with that much in gas (right now about $104 a month), and our total cost per month for her to go without a car is $644 a month.
My car payment is about $300 a month, so let's assume she can find the same or even less in a lease, especially since her credit is better, and I already estimated the fuel and maintenance as $140, but it'd transfer over to her paying it. Then she'd probably have to pay about $100 a month for car insurance (I pay less, but she'd be a new driver), and therefore our total costs for her to drive are probably around $540 a month, or about $100 a month cheaper.
To me that's a pretty slim margin. The main reason I wouldn't mind her starting to drive is it wouldn't be necessary to take her to certain places and save me an hour out of the day every day, not due to savings. Which I always assumed we would save a lot of money if she drove, until I did the math.
Also I live in the suburbs so if neither of us had cars our Uber expenses would be like $2006 a month, not per year, based on how much we drive currently. But it does look like having only 1 car in the household might be feasible, instead of the assumed 1 car per individual, like was the default in the previous generation.
> The no-car-movement is great for cities and people with lots of patience.
I don't own car (nor have any intention of doing so) due to being too blind to drive safely, but not blind enough for any sort of government assistance.
(I'm not legally prevented from driving, I'm being considerate of the safety of others.)
>The no-car-movement is great for cities and people with lots of patience.
Unfortunately Uber is kind of undermining public transportation though. In my city transit ridership is down, which ultimately impacts funding.
I can sit outside any sort of venue/party/bar and watch Ubers pull up by the dozen. 5 years ago most of those people would have been walking to public transit because cabs were more realistically priced (for the medallion owners at least, the drivers often got shafted there too). Uber trips often cost less than the price of simply stepping foot inside a taxi.
I've talked to my neighbors (6 college students sharing a house), and they've literally never taken public transit since living in the city, and we're ~5 minutes from a major bus station and ~10 minutes from a subway station. I was flabbergasted.
Of course, traffic is worse than ever (this is attributable to multiple factors not limited to Uber/Lyft).
I can't stand what ubers and lyft do to congestion. The drivers have no incentive to stop in marked areas or even pull over to the side when picking up/dropping off. Most of our busier two-lane streets are now 1-lane congested behemoths thanks to ride "sharing". It does get me on the bike more though. There aren't enough cops to enforce or care about the problem, and unlike some European countries, the culture in the US around citizens reporting traffic violations is nearly non-existent, so everyone gets away with it.
Hi, Neal here, I authored this analysis. I totally get you. I love driving. M3 is the ultimate driving machine (tm). But sometimes I prefer to do other things. Selling my car let's me drive when I want to and ride when I want to. I've found my correct ratio is 1% driving, 99% other things. Each person will have their own ratio.
Okay, but you can expect a car to last upwards of 10 and you own it. If you decide you want to drive down the coast, you can do just that. I think services like this are way overhyped and wouldn't exist if they saved you money.
Well they actually operate at a loss, so it wouldn't be so surprising if you save money using uber instead of owning a car. Magic VC money subsidize your trips ;)
uber makes money on every ride. they operate at a loss annually because they invest everything in expanding to avoid paying taxes - like most companies do.
It's quite true that they make money on every ride - what I meant is that we get "cheap" rides while they try to win a "winner-takes-all" monopoly, because they can afford to "invest" in expanding, with heavy losses (4.5B in 2017).
It's also true that it's not sure they will ever reach profitability. Therefore, my comment.
At least last year, "new car loans" had a really low rate, and I think as long as it's newer than 3 years old and less than 30k miles or something a used car still qualifies.. if you have money making more in interest than the loan percentage, you shouldn't pay cash (assuming you have greater than the financed amount earning interest)…
Interest isn't the killer, it's the insurance. When you owe money on a car, you're typically required to hold full coverage insurance on the car. That is not cheap.
That's not "certain." When market conditions change, you'll occasionally be able to get a new car for less than what you'd pay for a used one of the same type. Drastic changes in fuel cost and manufacturers discontinuing an unpopular model are the sorts of things that lead to this situation.
What on earth do you mean. Have you ever bought a car?
You negotiate the price you are willing to pay. The dealer has no idea if you are leasing, paying cash, or financing. The all-in price is either financed or leased at a specified interest rate. They do not "add in" an up front payment. That doesn't even make sense, and would be incredibly misleading.
If we negotiate $25,000 for the car,and I finance at 0%, you are saying they up the price to $27,500 to "build in a profit"? Nonsense. The numbers are in front of you and you can do the calculations yourself with high school math. 0% is 0%.
You are totally out of your element and shouldnt be providing financial advice. Maybe that's why the dealer rips you off.
You're wrong. Cash back rebate offers usually don't apply to the 0% apr deal, so the amount financed will be higher. Which option is better depends on the size of the rebate, what interest rate you can get outside the low apr deal, and the amount financed.
If the choice is between you getting a "sweet deal" or the dealer making a profit, you will lose every time. Rebates and magic 0% interest are designed to get you to sign on the dotted line without reading the fine print.
1. The two-word phrase sensible car was not defined by the comment I replied to; it was left up to interpretation.
2. Even if I take your assumption as the other poster's definition of sensible and remove any car payment, gas + insurance + maintenance yields a 6 year cost above $12k. My point stands.
> gas + insurance + maintenance yields a 6 year cost above $12k
This will depend on the individual circumstances. Liability insurance is significantly cheaper than full coverage. Average annual liability insurance is ~$552/year [1]. Driving the ridiculous 12k miles per year that average americans drive, a Prius would burn roughly 226 gallons of gas. At today's price of gas ($2.94), that's $664/yr. At 6 years insurance and gas will run you $7,296. I'm very skeptical of depreciation + maintenance blowing $4,704 over 6 years on a Prius...
The high cost of car insurance, coupled with the low wages in this state, are a significant factor that kept a lot of my peers in poverty well out of high school. The usual story goes like this:
- Reliant on a hand-me-down car to get to work.
- Work barely pays for rent, car insurance, gas, and food.
- Car needs maintenance but no money for that.
The end result is predictable: A lot of Floridians work for just enough money to be able to get to work, and as soon as this equilibrium is shattered, our lives fall apart.
Charitably, I think the lowest I've seen anyone's insurance payment in this state is $89/month, because they were over the age of 25 and their car fit the requirements for lower insurance rates nicely. They still had a car payment ($400/mo. IIRC) though.
> the lowest I've seen anyone's insurance payment in this state is $89/month [...] They still had a car payment ($400/mo. IIRC) though.
Again: liability insurance is a different thing. When you don't own your car (aka when you take a car loan), you are required to have insurance that can cover the cost of the car. When you own your car, you only need to pay for liability insurance, which is much cheaper.
Your story is all too common in the U.S. It's expensive being poor here. The frugal solution is to have money to buy a car outright. It's tough getting out from under that dilemma.
Yup. There are plenty of sensible options that you can buy outright. Plenty of japanese cars will last well over 200k miles. If you can't afford a new car, get a used one. There's a culture in the US that makes us way to comfortable taking out loans.
Especially when you consider the option (in California) of a Fiat 500e. It'e electric, ~90/month to lease and anywhere from negative $1000 down (when taking into account the CA $2500 incentive you get paid to take it) up to 1500 down.
You can even find pretty good lease deals on the more expensive BMW i3 - used electrics are pretty undervalued at the moment.
Not only that, but 2 cars over 2 years; and, measuring depreciation as a cost. Also, comparing the maintenance cost of owning a BMW to riding in an uberpool. I don't know about your locality, but most of my rideshare vehicles are budget sedans or hatchbacks, or hybrids -- much cheaper than 11k a year in maintenance.
Would he have stuck with 2 cars for 10 years, or 2 cars for a year each? 10 years of uber vs 2 cars over 10 years will definitely shift the savings number in favor of car ownership compared to 2 years.
He's counting depreciation of an M3 in there, too... why not buy a fighter jet and make the savings look even better?
He didn't give up his cars until uber pool, so for a great deal of the data he is using uber in addition to his regular car, which limits his uber expenses.
Because the largest portion of his savings comes from the shift to uber pool, this is completely invalid for anyone except a single adult. Anyone with a spouse or children, or anyone doing even average shopping, anyone not in a major downtown, will not be seeing these savings.
He's only traveling around town, and seemingly only using Uber less than once per day, even during his peak usage. Is he using public transportation? Google transportation? Friends? I don't see how one can get to and from work, and run errands, and go out in the evenings or on weekends, and average 200 rides per year (again, during his optimum savings period). Is he working from home most of the time?
He mentions renting cars for longer trips, but this is not included in his costs. In addition, his uber trips are all in SF... like, yeah, if you only travel within a major US city, transportation costs can be pretty low (and why not just use public transportation?).
All of this implies to me that, not only are his calculations wildly off, not only are his uber costs under-reported, but even with all that, the entire, incredibly ideal, situation is reproducible only by a very small minority of the population. Alternatively, the other interpretation is that he was wildly overpaying and under-utilizing his cars before.
Here is a more realistic calculation for a US resident:
30k car, 10 years
10k gas,
5k insurance,
7k repairs
= ~5k per year.
vs.
4 trips per day, on average, for 1-2 persons @ $20 per trip
= $29k per year. And that's being generous--I'm pretty sure my spouse and child and I would blow through at least $50k a year if we switched entirely to Uber, and we have a very typical travel pattern for the US.
I had the same reaction, although to be fair I think he's still saving money if you only figure the costs of the Jeep.
> Incidentals on the vehicles cost $3,450 per year: $1,000 maintenance, $500 insurance, $1,500 gas (just above the national average of $1,400), $300 car washes (so shiny), $150 registration, and $0 parking.
Let's say 50% of the maintenance and the insurance was the Jeep (probably not, since the BMW should be more expensive to insure), and 100% of the gas costs would go to a single car (balances out the other way, since the BMW probably had better milage). 50% of registration. Stop getting your car washed. Total:
$2,325/yearly for just the Jeep. So on average he's still saving a little bit of money on the Uber. On the other hand, if you just compare the last three years he'd be better off with just the Jeep. The average is very skewed by 2011 and 2012, when he didn't Uber much.
He doesn't assign any cost to wait time; I'd be interested to find out how much time he's spent waiting for his Ubers to show up. I bet Uber doesn't give you that information on your account but I don't have an Uber account to check.
Interesting analysis effort anyhow! I'm critiquing but I like the general idea and I'm glad he published this.
What you lose in terms of waiting for the car to show up, you gain back in not having to park and getting delivered as close to your destination as possible and not having to walk from the parking spot.
This wildly depends on where you are. Your parking savings will be much higher in SF than in suburban Dallas, where "time for parking" was a foreign concept to me growing up for anything except sports games and big concerts.
There are definitely people who are better off not owning a full-time car, but I agree with the poster above who find it a bit disingenuous to compare to a $80,000 M3. You could definitely find a car that would cost you under 12K for six years -- especially if you already have a car that's all-or-almost paid off.
The factor on the other side of the fence is that though comfort, etc, is usually lower in the back seat of a Lyft than in the driver's seat of your own personal car, you're not having to do the work of driving. If you want to save money, this is labor that'll be worth it to you driving your own cheap car. But if you want to save effort/stress/etc, it's worth spending to not drive yourself, especially in high-traffic areas.
267 rides last year. Assume, I dunno, average 5 minute wait? So 22.25 hours of waiting; half a week. Huh, that's actually pretty significant given the author is probably making pretty good money in his role.
And don't forget this bit - "By comparison, car ownership cost $11,783 per year, most of it depreciation."
He's including what is basically an accounting measurement, not an actual out-of-pocket cost!
I wonder what his "savings" would look like if he used only 1 car for himself and didn't get to write off $500+ a month in depreciation.
Hi, Neal here, author of this analysis. You are right, it was an accounting measurement, until I sold the car, then it became a real pocket expense because I sold the car for less than I bought it for, and in that moment it was a measurable cost. I sold the cars before doing this analysis, and included the sales price in the analysis.
Since everyone is already weighing in on their experiences I guess I'll add my own,
I went 2 years without a car and it was great when I was in the period of my life where I wanted to be head down and studying to get a better job. I spent almost nothing on Uber because I used public transit or walked everywhere. I can count on one hand the amount of times I used Uber, seriously.
Even after I bought my house which is in a suburb kind of in Seattle I continued to go car-less which included a 3mi round trip walk to the grocery store. Didn't mind it much, just had to plan around the weather.
However I moved to the PNW so I could get outside and experience it, not spend my life in the city. Going hiking means 80-100 mile round trips easily on the weekend and Turo, reachnow, zip car were just not ideal for this. Cost is prohibitive if you're doing it every weekend. That's a minimum of $80-$100 * 4 if I go out just one day on each weekend.
I bought a beater truck for under $3k. It has 4wd and a bed to toss all of my gear in. It's the perfect vehicle. Insurance is super cheap, only need liability because who cares if it gets totaled it's already banged up. I can run to Home Depot and get stuff for my projects around the house, toss my bikes in the bed, do my shopping. It covers all the bases and gives me the connivence of not having to deal with finding a reachnow car or meeting up with someone for Turo, etc. One important caveat, I also do my own repairs so if you aren't mechanically inclined it might not be the right choice.
I only drive the vehicle on the weekends and still commute via bike or bus to work.
I also noticed that because of my inherently cheap nature I wouldn't rent a vehicle to go do these things even if the end result is that it's cheaper than car ownership. My brain just can't get over the fact that I'm directly paying for the hike, or the trip to the store, etc. I think a lot of people also feel this way and idk how to overcome that kind of irrational thought, but in the end the opportunity cost of having a vehicle is worth it, if it means I'm actually getting out and doing things I enjoy instead of staying home or in the city.
I get the sentiment but I buy a new car because of safety features. I drive a Honda,will drive it for many years until something safe and cheap comes along
>but in the end the opportunity cost of having a vehicle is worth it
To add to this point: renting a car not only takes money, but also advance planning. A rental car is not waiting for you to just jump in and go at your home.
I realized I want to see the total solar eclipse 9 hours before it started, and it was an 8 hour drive. Wouldn't do it with a rental.
Compare this to Philadelphia, where a monthly Septa pass (that's bus+trolley+subway) is $96. That's a savings of $856/year over Uber. I have been carless for three years and my savings account is very happy now. Regional Rail passes are $105, so you don't have to live in the city, either.
Big supporter of public transit, but this is apples to oranges. Nine times out of ten, the Uber is going to get you where you want to go a lot faster, unless embarkation and destination are both on the same public transit line.
I suppose it varies by city, but to me we're not talking about comparing apples to oranges. We're talking about exchanging apples and oranges for bananas, just in different ratios.
I lived carfree in Milwaukee for a while (picking that as an example of a city that only has bus service), and the time savings really didn't seem that bad once I got used to it. A trip to one of the shopping malls on my side of town was about the worst-case scenario, and there it typically took ~40m on the bus, versus ~20m by car. I like reading and I had a Nintendo DS at the time, so that ~20m difference was spent doing what I would have probably done with the extra time, anyway. I was just doing it without a cat in my lap.
An easy trade, I thought, considering that I was typically spending no more than $10 a week on bus fare. Often more like $0, especially in the summer, when it was more fun to get around by bike. Owning a car or using a taxi service for my main way of getting around would have cost thousands per month. That's quite a few fewer apples, and not a whole lot more oranges.
The author of the linked analysis specifically says they do not mind trips taking longer (Uber Pool is not nearly as fast as Uber X) considering how much money they are saving. I am doing the same comparison: public transit takes longer than Uber Pool, but you save something like 50%. So I think this is apples to apples.
Hi fellow Philadelphian! I too tend to ride septa or bike (whenever it's not freezing or raining) to work, only using my car a few times a month for shopping or for road trips in the summers / occasional visits to family in nearby states. The car ends up costing me a little under 3k per year in maintenance, gas, and insurance. Yearning to ditch it, but I do like the freedom to go on these trips (I'm usually bringing lots of gear and going far from population centers for camping).
I recommend weekend car rentals. If each trip cost you $145, you could take 20 trips before it would equal the cost of your car's maintenance/gas/insurance. Right now a 2-day weekend Hertz rental in Conshohocken is $60 including taxes and fees (but not insurance). Definitely cheaper than car-sharing, where you pay more to use it for less time.
A good credit card will cover Collision Damage (though you may need to shove a copy of the card's rental coverage in the face of the rental sales associate as they may try to claim it isn't covered). You can pay the minimum liability insurance, or you can get a "non-owner liability insurance policy" which will cover you for the year, saving you money if you rent frequently. Personal accident insurance is optional and may be covered by your health insurance.
The additional cost is for door-to-door service. Not everyone in the Philly metro area is within walking distance to a Septa location, nor do people want to spend the additional time to arrive at a Septa location and then ride to work.
In my city/state, a bus pass would cost you $70 and would be very, very slow in comparison to Uber. It would also entail waiting feet from auto emissions for 15+ minutes while you await a bus which is never on time. Then, you ride the bus itself, it's old and there are bizarre people on there, whereas in the Uber, you get to be by yourself in a back seat. To me, the quality of the ride provided is too slow and too uncomfortable for the slight savings.
I find it hard to believe you _only_ use Septa to get around Philadelphia. I have the regional rail pass for my commute as well and Philadelphia's public transportation system is not great for getting anywhere in the city. I uber all the time to get around Philadelphia to supplement my Septa pass. It still definitely beats a car payment, insurance and the hellhole of parking though.
At least compared to NYC, where I could hop on the subway to anywhere in the boroughs.
I take about one round-trip Lyft/Uber every two weeks (I don't go out much) and I walk around my neighborhood for anything I need. The only place I go that's inconvenient to use Septa is the southeast industrial area with all the box stores (ikea/walmart/home depot/big movie theater).
Hi, I'm Neal. Author of this analysis. You're right about public transport. I would take public transport more if my hotspot worked underground and if it was reliably less disruptive (people bump too much to work with laptop open in socially acceptable way). This sounds strange, but lately I've enjoy taking these silly scooters around town and have been using them more than public transport or uber (in the city). Not sure if they've reached Philadelphia yet, but they are all the rage here in San Francisco.
Free transit is mostly an edge case. It's almost always limited to small cities or municipal areas (including in Europe), and often target the elderly and students. There are interesting consequences to free public transit, such as picking up some new kinds of riders at the same time as turning off other riders. But it can be pretty effective in the right cases.
Baltimore has a free shuttle bus called the Charm City Circulator. It's not intended to move people around the city. Instead it's targeted at a central problem area that may otherwise be prone to increased traffic congestion, pollution, and slower or lower ridership. It also facilitates tourism and gives an incentive for workers to live in/near the downtown area.
The CCC is popular enough that it's hard to get on one heading downtown in the mornings because they're so packed with people heading to work. And strangely enough, it's much cleaner and with fewer undesirable riders than regular (paid) buses in the city. This is probably due to the historically segregated layout of the city and the particular routes these buses take. The biggest problem with the CCC is it hasn't been funded or maintained properly, so these strange custom shuttles are breaking down and there's nothing to replace them. As a result they had to cut down some of the routes, while they also expanded the most popular route to travel farther north.
It's nothing out of pocket though. And that's the point. Also your argument cuts both ways. The US as a whole subsidizes car ownership to a huge degree. Do you want to factor that in too?
> It's nothing out of pocket though. And that's the point.
No wonder politicians can so easily manipulate the public. “I don’t pay money at the time the service is rendered, therefore it’s free!” It is coming out of your pocket, just at a different time.
> The US as a whole subsidizes car ownership to a huge degree.
Are you making hand wavy arguments about wars for oil or something? Last I checked roads are paid for by various taxes, including gas tax, which I pay.
Gas tax pays for less then a third of highway maintenance. The rest of it comes from the general tax pool. As a non-driver, I get to subsidise your 'free' roads.
When you combine the total cost of ownership, subsidies, and infrastructure, you'll find that cars are far more expensive, privately and publically, at moving people than buses.
> The rest of it comes from the general tax pool. As a non-driver, I get to subsidise your 'free' roads.
Unless you happen to use a bus. Then you benefit from it. And as a non-public transport user, I subsidize your public transit. It’s a wash.
> When you combine the total cost of ownership, subsidies, and infrastructure, you'll find that cars are far more expensive, privately and publically, at moving people than buses.
I never said otherwise. I objected to the argument that there is such a thing as a “free” bus service. The OP was comparing said “free” service to paying for a bus ticket. It’s not a fair comparison to make.
> Unless you happen to use a bus. Then you benefit from it. And as a non-public transport user, I subsidize your public transit. It’s a wash.
If we go to a restaurant, and go halvesies on the bill, but I order a salad, and you order a steak dinner with a bottle of champagne, it's not a wash. Subsidies to public transit vs subsidies to personal automobiles is more similar to that situation.
But yes, nothing is free. However, plenty of services are 'free', in that there is no cost to the user, as opposed to a non-user.
OK, but what does that change? Ride public transport and fund it through taxes, or drive a car and still pay for public transit? You don't have a choice, so it is effectively free.
The OP was comparing out of pocket transport expenses versus “free” public transport, attempting to make an argument that us dumb Americans have to pay for something that someone else can get for “free”. It’s not a valid argument. They both cost money, figure out what that amount actually is before making arguments about relative cost.
The really frustrating thing about this analysis is he completely ignores mileage. However you split it, that's a huge factor in a vehicle's maintenance cost and depreciation. He compared maintenance on vehicle that clearly must be driven significantly more than he took Uber.
Since he also has two other vehicles, he was clearly using those to drive too. He's sold them now, but he doesn't mention anything about the cost of Turo which he suggests as an alternative.
I have no idea exactly what Uber breaks down to per mile, but ridester.com suggests $1 to $2.50 per mile. Let's assume it's as cheap as $1/mile to give him the benefit of the doubt and account for UberPool.
----
At $1/mile, he traveled 12k miles over 6 years - or 2000 miles/year.
* Maintenance on 12k miles would basically be nothing. No major work should need to be done in a 12k window. Probably some wipers, some fluid changes, possibly a minor repair - let's just say it's $500.
* Gas - Let's assume 20 miles/galloon and $4 per gallon. $2400 over 6 years.
* Insurance - The most expensive part. 2000 miles/year is nothing, but insurance doesn't work that way. Let's assume a modest $500/year. - $3000
When you add that up it comes to roughly $6k left over. You can look at this two ways.
1. Try to buy a vehicle in the $6k range and assume no-resale value. You're not going to get a great car, but it will be doable.
2. Account for only depreciation. 12k is mostly negligible miles. The biggest lost will be due to aging. That being said, as long as you avoid relatively late-model year, you can purchase basically any mid-upper car and still break even (like an M3).
Plus, in both cases you get the benefit of actually owning a vehicle and not relying on 3rd parties.
----
EDIT: He also mentions using Turo as an alternative for a car. That opens up the possibility of him renting out an own vehicle on Turo. An M3 would likely catch $100/day or more. Let's say $50/rental day gets to his pocket. If he rents a out his M3 just twice/month (e.g. one weekend) and assuming the driver hits the 100 mile/day standard. He'd add only 14.4k more miles (still not a lot) and make an additional $7.2k. That pays for depreciation and leaves him room to ride share while his car is gone.
Hi there. I'm Neal. The author of this analysis. As I recall, I included the cost of gas, and wear and tear in maintenance. The largest cost of cars is depreciation, and that's kept me from buying a car. The only car I would want (a nice car) is going to depreciate faster than I'm comfortable with. Since doing this analysis I've been carless for 2 years and have used Uber and google buses a lot to get from SF to Sunnyvale where I work and fly planes. Since writing I've used Getaround a few times and Turo never. There's a Getaround next door to me (a nice Volvo) and taking that is often less expensive than uber, but less desirable because I've gotten very addicted to the pleasure of not driving the car that I'm riding in.
I like your suggestions here. I've considered buying a car and renting it out like you suggest, but I currently make $100,000/year doing that with the extra room in my SF house, and that's enough work that I can't afford to extra time to do it with a car also. And I think I'll make more money on Airbnb vs. Turo/Getaround. Homes are easier to monetize than cars.
You get $8300/month from renting spare rooms in your house? That has got to be a big house and you are a /very/ wealthy individual.
I bring this up because it seems like you ride Uber more for the convenience for your lifestyle and less for the cost factor. You could easily buy an old prius and not worry about most maintenance, deprecation, etc. Most ride shares I've been in have been a Prius or similar. As you said, "I've gotten very addicted to the pleasure of not driving the car that I'm riding in." You don't seem to value driving anywhere near being a passenger. Thus, selling the M3. <-- Not sure why you'd ever be buying an M3 if being driven around in a Prius at modest speeds was your thing. Was it just about the image?
Correction, ~$60k/year. Your point is valid that I could buy an old Prius, and I've considered it, or one of those plug-in cars that you can get for basically free after the California rebate, but it won't drive itself sadly. The M3 thing was a bit of a phase. I liked the way it sounded and drove, but I found myself wishing it had better self-driving features and that it was less easily nicked, dinged, and scuffed. One point of clarification; I don't self describe as wealthy or /very/ wealthy. The housing market in SF supports a healthy airbnb market.
The GSA Rate (about $0.55/mi) is an all-in cost based on medium sized passenger car. It covers, depreciation, insurance, maintenance, fuel, etc. It does not include parking, storage or other costs.
Uber per-mile cost is going to be very variable based on the trip costs. Where I live, the minimum cost of an Uber is about $10. My daily 5 mile commute would be $17-24/day for a total distance of 9-12 miles. Cost of a car for that commute is $6.
Obviously, the numbers really depend on how you drive and how much you walk. If you only drive your Honda Accord 2,500 miles a year (my commute), the fixed costs of a car don't amortize as well. If you drive s 15,000 miles a year, you'll line up with GSA. If you drive more, your costs will drop up to about 20% per mile. (Per mile insurance costs drop faster than increased maintenance expense)
The problem is that reality is a bitch, and cars are generally the most economical way to do most things outside of Manhattan, or in some dreamland where you order everything online.
Even at $1/mile, uber and the like are very expensive relative to the average car in the US fleet. As many companies have cars for business use, that churches use vehicles commonly, and that medical use of cars is a necessity, the IRS publishes guidelines on how to deduct the use of an automobile [0]. From my understanding, they take in account many factors when publishing the standard, from wear and tear, to gas purchases, to depreciation, and to age of car. Going off the IRS, the 2017 standard mileage rate for something like uber should be $0.535/mile or less. I have commonly been reimbursed at this rate when driving my own car for work, job interviews, conferences, etc. and it is the business standard rate.
I had a BMW and drove fewer miles than that. The maintenance alone for random things breaking (run flat tires punctured, oil leaks, breaks, battery, etc.) was like $1k/yr. Depreciation was also huge over 6 years.
There used to be recommendations to change oil for time as well as mileage. Has that changed? Also, not all driving is equal. Stop and go driving in the city is many times more wearing than highway driving.
Lots of newer cars are coming out with 7.5k/6 month oil changes (realistically, that will go well beyond 6 months). Even some cars are coming out with 15k/12 month oil changes.
Definitely longer than the 3k/3 month oil changes of the past.
Most manufacturers recommend 6-10k miles or 6 months, whatever is sooner.
IIRC, the reasoning is mostly about failures of parts/screws involved in the maintenance.
The labor required to tap a seized lug or corroded filter that gets stuck is a multiple of the cost of oil change. There may be temperature related reasons as well, but getting facts about a topic that fuels passions as much as motor oil is difficult.
I clearly stoked that passion based on the wide variety of reasons one should or should not change based on time, distance or otherwise. And no two reasons appear to be the same (o;
With some egregious appealing to authority.. I will say that as someone who performs oil changes on our daily driver Honda Element, a 1987 VW camper (when it both had the original engine and the new ford Zetec engine it currently runs on) as well as my 2001 BMW motorcycle, 1970s cub cadet lawn tractor and the Harbor Freight engine I transplanted on to the snowblower...
I have never once encountered a ceased sump plug or stuck oil filter. Ever.
I'm not saying the monkey at Zippy-lubers wont strip a plug because he was busy texting his girlfriend at the same time. But I've pulled parts of engines that hadn't see action for decades. This is not a reason for a 6 month schedule
The only advice I've seen, and oddly enough it's not been mentioned in this thread so tack it onto the list of oil change folklore, is acidic buildup due to oxidization and the timeframe on that is roughly a year.
I have never ever seen a filter corrode on something that wasn't literally sitting in a field for 20 years. Oil plugs basically never corrode either, if they fail it is almost always due to some mouth breather at the quicky lube using the air wrench on it and putting in one too many ugga duggas or somehow cross threading it.
IMHO 6 months is much too short of a minimum interval for modern oil. 12 months is a much more reasonable interval.
No, you change it at least every 6 months, more often if crossing the mileage threshold. There are several kinds of oil degradation occuring, one of them is elevated in cars that don't drive much, or only drive short trips. Read an owners manual - you'll see words like 'every 5,000 miles but no more than 6 months'.
It hasn't changed, it's just that there's misinformation abound.
The standard recommendation is every 3000 miles for non-synthetic, which is very very wrong (too frequent) and serves to enrich quick lube shops at the cost of the environment. Folks with newer cars should NOT follow this recommendation [1], but instead refer to their car owner's manual.
With synthetic oil you are far less often required to change oil due to time. Oil just doesn't degrade like it used to.
Also, oil changes every 6 months was mainly used as an appropriate time frame in case someone forgot to watch their mileage, with an average of ~14k miles driven in a vehicle a year that averages an oil change every ~7k.
No, the 6 months recommendation is due to absorbed water vapor causing gelling and sludge. It's specifically targeted at vehicles that aren't driven often, or only take short trips. In these vehicles the inevitably absorbed water is not driven off by engine heat often enough and they become fouled due to sludge.
The mileage based change intervals are about two kinds of degredation, shear (loss of viscosity), and Ph (exhaustion of wear additives). Shear may be improved by synthetics but additive depletion is not, although it is uncommon to run oil long enough for that to become critical.
As others have noted, the depreciation and savings analysis is very misleading.
Bottom line is that without the cars, he spends about $390 / month on Uber, and likely that average may have increased given the extreme low summer outlier months. In some areas where parking or insurance is expensive, this could mean large savings. In my area (Austin, TX), the all-in cost of owning a car with insurance is minimally more than this figure. You could lease one brand new, moderately priced car + average petrol costs for about the same amount. You could buy a cheap car and depreciation + maintenance would be even less.
The few times I have been without a car, I avoided going anywhere because having to Uber makes it very real how much I'm spending just to go out each and every time. Like going to the park or to the grocery store. So instead I sat inside.
I'll never go without owning a car again. The ability to travel freely and not feel some psychological burden about doing it is more than worth the cost of a car to me.
NOTE: This is based on my experience living in Austin, Seattle, Memphis, and White Plains NY.
> I avoided going anywhere because having to Uber makes it very real how much I'm spending just to go out each and every time.
This! It's so hard to get over that psychological resistance to seeing a ~$10-15 hit every time you want to go somewhere not too far from your house. Even if I know, rationally, that it is the same or less than I would spend for owning a car, I can't get over.
There's a joy and freedom in owning a car and having to think about the real cost of every mile you drive. Ignorance is bliss I guess?
Had you considered a bike? I've lived in Austin, spent time in Seattle. Ditching the car and using the savings to afford a more centrally-located place in those places could make sense, especially when the alternative is sitting at home doing nothing. It's not that scary to bike in those cities. I always dislike going to the park in a car in general because it just feels like I'm using the laziest and most polluting travel option to go exercise and enjoy nature.
Definitely! I had a bike in both Austin and Seattle. I used it for commuting to/from work a few times a week and sometimes for picking up groceries. It just doesn't replace a car for me though, but it is an enjoyable addition (I didn't always live close to work, the climbing gyms I frequented were far from my home and office, my friends were spread out, and I like to go out hiking on weekends).
Yes. + if you live in a city, you are also fighting for on-street parking nights and weekends, and have to keep moving it every other week in order to avoid getting street cleaning tickets.
This is sort of by choice though, no? When I was looking to rent in SF, I always asked about parking arrangements. It's not that hard to find places that have garage parking arrangements, even in neighbourhoods with crowded street parking (e.g. sunset/richmond).
Also, SF seems somewhat unique in how bad street parking gets. In, e.g. Toronto, street parking in some areas near downtown is reserved for residents and outer neighbourhoods tend to be spacious enough that households have dedicated parking spaces.
Ok yeah, in those areas, I can see it happening (but then again, I would never rent in those areas if I have a car...)
I was looking for 2beds mostly around sunset and richmond (basically around areas with good elementary schools). I'm surprised you got such a different experience because when I was searching, many places had parking included, and "important" factors like parking/laundry didn't even seem to affect the price as much as other random reasons (e.g. recent renovations, landlord whims, the real estate agent mediating, perceived "transit convenience", etc)
I spent a significant amount of time looking (I toured well over 50 places), and there's definitely a bunch of full-of-$%&@ people out there trying to rip you off. It's hard to find good deals, but not impossible, and I did get a few who even offered to waive deposit/first month/parking or to negotiate.
to me, there's also the factor of liability when I'm driving a car.
explanation, I can drive a car, for fun, to go on adventures, outside of the city, or take a ride at night, but when I'm making a reasonable salary, I'd rather uberx when I commute, and totally focus on work and my mindset, than road safety. Also sometimes I'm very stressed/tired after/before work, so driving is not that safe and safety is priceless.
>> In some areas where parking or insurance is expensive, this could mean large savings. In my area (Austin, TX), the all-in cost of owning a car with insurance is minimally more than this figure. You could lease one brand new, moderately priced car + average petrol costs for about the same amount. You could buy a cheap car and depreciation + maintenance would be even less.
> But so much of your mental time and energy will be wasted owning the car.
I don't follow. I haven't spent much "mental time and energy" on my car since I decided the on which model to purchase and finished all the paperwork. Getting it serviced is convenient, infrequent, and requires little time on my part. Driving requires attention, but I don't experience a notable gain in productive free time when I use Uber/Lyft.
I do live in a car-friendly area with good parking and nearby gas stations, so YMMV.
Exactly. The biggest pain of car ownership is _buying_ the car in the first place. After that, it's unexpected repairs. Gas, maintenance, and cleaning are very easy. Unlike the author, I've never wanted/needed to do work on my morning commute (or anytime outside the office, really).
If you live or work in a bustling downtown, then car ownership is tougher (but that's one of the reasons I don't work in a city like SF).
The monthly savings calculation in this article largely based on the depreciation of a brand new BMW M3. I think it would be good to use an average vehicle depreciation in there for comparison.
Yes. I don’t think the poster you’re replying to missed the author’s position; I think they were just pointing out that it generalizes poorly, since the “savings” all pretty much came from that single source, which few other people share.
As the author said: their other car held its value. If he’d had 2x of that car rather than a BMW, the results would look wildly different. Most folks don’t have that situation.
Uber actually loses money on each ride. So I don't think the same analysis be hold long term, especially when the company starts to raise its prices.
WSJ recently wrote an article on how it was possible to live in SV for free thanks to the VC fueled economy. They gave example of a guy who financed his Mini Cooper using startup deals, which I think is a better deal than subsidized rides ;)
This is only true if you're using referral credit. In well established markets (eg San Francisco) very few rides are subsidized, and Uber makes a healthy profit.
If you don't buy BMW M3, then Uber won't save you 700/month. Figures look viable only because Vehicle expenses were $11,783 per year. ~The 2008 BMW M3 was depreciating in resale value $8,333 per year. ~
Sure, but now he has someone drive him around (another type of luxury). It's comparing two luxury experiences. Of course driving a beater or riding a bike would be even cheaper.
As a point of reference, I drive a 2009 Kia Optima and average $1800 per year all-in expenses. This is with no car payment (it's paid off), only liability insurance, normal maintenance (including occasional large expenses), and ~10,000 miles a year driven. To add a car payment might be another $2000-$5000 a year.
Exactly. I don't know the use of comparing a European GT car with a badge tax versus riding in the back of someone's accord. A more useful comparison would be to use the model of the average Uber driver
I went carless about a year and a half ago in Los Angeles (wife still has a car) and it’s been awesome.
I had a ratty 2006 liberty. Going through my bank history and tabbing up costs for the previous years I figured if I spent $25 bucks a day on Uber I’d be saving money. (Actually I spend about $18 / day)
Things I took into account were:
- insurance
- gas
- parking tickets, garages and meters
- maintenance (something expensive broke every few months)
- Amex platinum gives a $200 credit / year for Uber
Qualitative-ish things:
- time saved not parking (some days I’d spend 45 minutes trying to find a spot in Venice)
- time saved not forgetting where my car was parked or walking a mile to it
Hi there, Neal here. I authored this analysis. I like your analysis too. I suspect the Amex benefit will be a rounding error at most spend levels, but is a nice benefit. I suspect the "I do all of my emailing during my rides" is meaningful as it increases your productivity a lot or gives you time back to your friends a family a lot. You could add to your list the cost a burden of keeping a car clean. Uber forces you to not carry unnecessary things which makes your life, overall, simpler, which often leads to happiness.
Yes! The amex benefit equals a free days ride (ish) once a month.
Yeah the real benefit is not worry about all the worry, not dealing with all the details. Washing a car sucks. Pumping gas sucks. Changing a flat sucks.
I don't mean to be a downer here but you're essentially saying that paying for someone else's asset depreciation costs is cheaper than paying for your own asset depreciation costs plus the remaining value on a car.
The reason it's more expensive to own a car is because you also own the asset. And sure, cars depreciate ridiculously fast and are horrible stores of value, but your solution is mostly saving money by offloading some risk to another party.
>The reason it's more expensive to own a car is because you also own the asset. And sure, cars depreciate ridiculously fast and are horrible stores of value, but your solution is mostly saving money by offloading some risk to another party.
This is not why there are savings. You are not offloading the risk of owning a car by using uber, you are allowing cars to be used more efficiently. Cars are expensive because they sit unused 95% of the time. The marginal cost of each ride is extremely high. By having one car and one driver do 100x the rides the marginal cost of each ride decreases substantially.
This analysis looks amazing. We’re currently a two car household with one of the vehicles being a little older and slowly starting to lose some reliability. Before rideshares it would be pretty important to go out and find a newer, more reliable vehicle so I could ensure I make it to work. This winter after the car sat for a few weeks it wouldn’t start. Rather than spend 30 min messing with it and being late for work I simply hopped in an Uber. When this vehicle does meet its eventual demise I will likely advocate for becoming a single car household.
The biggest hurdle ridesharing has in replacing vehicle ownership though is the one off scenarios where having a vehicle is just so valuable in terms of time and cost. We’re in the middle of remodeling our bathroom. We did plenty of planning and sorted out all of the materials and tools we would need and made a giant list. I went to Home Depot and bought just about everything in one trip and loaded it in a truck and drove it home.
As the project has progressed though, there are constantly times where I find I need a tool, or need a different fitting for the plumbing, etc. I just hop in the car and head over to Home Depot quick and grab it. Uber would cost me about $15 round trip for each one of those visits. I haven’t gathered the receipts yet to track how many visits I’ve made but I imagine it would add up pretty considerably. This is just one example. As an expecting father I can only imagine how much of a nightmare loading a car seat in an Uber would be.
I love having the option of a ride share, and I think its fantastic for the opportunity it provides those who many not have access to a car for various reasons. However, I’m not sure ridesharing will ever reach the point of being able to completely replace car ownership for the average American household. I’m confident we’ll hang on to at least one vehicle for the forseable future.
Why wait? :) I did this a while ago (2car -> 1car, with a child), and have zero regrets. We now have two kids, and are still 1-car'ing it, with the occasional rideshare. It's fantastic not having to deal with the crap a less-used car comes with.
We chose not to go zero car for many of the reasons you mention (and, in fact, ended up replacing our 2007 ford focus this year). But going from two to one is very freeing.
Loading a car seat into a rideshare isn't bad, btw - the LATCH anchors make it almost routine once you're used to it. Our travel carseat is a little more twitchy, but none of it is very bad.
This is exactly the question and situation I am in as our 2004 Jeep probably won't pass inspection come this December and we are thinking about which car to buy and if we should buy another car.
Speaking as an automotive mechanic, Uber/Lyft/taxi are functionally indistinguishable from a fleet vehicle after the first year of service with the notable exception that fleet vehicles enjoy cheaper parts and service.
Expect to see your brake/oil/air filter life cut in half. most of this is due to idling in a fleet-like manner a vehicle with no accomodation for greater-than-average idle times. Example: the crown victoria and F150 fleets sold to government agencies can easily sustain a 3-6 hour idle as theyre equipped with an enlarged intercooler so you dont cook the oil.
Suspension suffers but not appreciably as power steering fluid, which turns to laffy taffy pretty reliably in these types of vehicles. Tire life in some cases is notably shorter due to the prevalence of sidewall damage from mediocre drivers dragging or hopping curbs. Fleet vehicles are equipped with idler/pitman assemblies which, again, are cheaper to repair and service than the more complex and expensive rack-and-pinion...which also isnt as durable for fleetlike operations.
service times are also longer...so theres lost revenue. example: an AC service on a Lexus takes damned near 4 hours (I'd want the car for the day.) Service on a lincoln towncar? I might not even have to put the keys in the ignition. Theres actually a factory tool you can order from Mexico that will do it in about 11 minutes.
TL;DR: if you're driving for one of these taxi services, buy a fleet vehicle used or new.
I was not aware there were a subset of consumer vehicles that were considered 'fleet vehicles.' A quick google search doesn't show me: beyond crown vics and f150 (all of them?) how do I find the full list of fleet vehicles?
> Using uberPOOL, instead of uberX, I’ve saved on 301 rides * ($14.45 average UberX ride – $10.66 average pool ride) = $1140 savings. In exchange, I’ve sat longer in rides. That’s 301 rides * 8 minutes extra minutes per ride on average = 40 more hours in pool rides. $1140 savings over 40 hours is equivalent to Uber paying me $28.50 / hour to ride uberPOOL.
Since he’s paying Uber with after-tax non-deductible dollars, it’s actually more like earning ($28.50 / .6) = $47.50 per hour.
Interested to see how he'd fare under carsharing as opposed to ridesharing. It seems UberPool is about $30 an hour per hour, UberX $54. But car2go for example is around $20-25 depending on the car and city. (not available in SF) And that doesn't require you to share a car with other people (which is fine as a taxi service, but perhaps too intimate for many as a daily routine).
That having been said, in terms of 'car hacking' he should be able to do much better if he just bought a cheaper but reliable car. He never owned the car for status purposes, his previous choice of car seems like a bad benchmark to compare Uber to. 8k depreciation is just crazy, might as well just lease at that point or buy a small, cheap japanese car, like a Honda Civic or something. Maintenance is a few hundred bucks, you can buy em for two years worth of his BMW depreciation, pretty fuel efficient. I think ridesharing is great, but you shouldn't compare it to a newly bought $80k BMW benchmark imo.
In 2010 I bought a Nissan Versa for around $10k (lightly used). It still runs like a champ, the door handle has been replaced, a few belts, tires, oil, etc. However, all the repairs in 8 years is less than $5k.
That's around $700 a year, and the damn thing has 165,000 miles. Still starts, drives, no rust. Should easily be able to pull 200,000 miles off of it (or another 2 years). I think the car today is still worth a ~$1k - $2k.
Yes, $5k covers this costs. A timing belt or break pads are $100 - $200 for the whole thing. Insurance isn't included sure, nor is gas.
According to my mint, on average I spend $500 / year on insurance (two cars) and gas is $1000 / year. I also get things like freedom to drive cross country (which I've done) or go to national parks. Which adds value.
Take all that and its still what:
$8k + $4k + $10k + $5k = $27k
For 8 years... And I gurantee I travel more than 686 rides, as I drive pretty much 365 days a year. Plus it has some value.
In many cases, as with most things, convenience comes at a premium. That's what ride sharing is. I use it too when traveling, but the car is way cheaper long term.
Is Uber's plan more like keep making loss and keep pushing the world to a state of rent a car for each ride and then get to a state of not own any car and then ones we get to a state of no one owns a car and every one takes a Uber then just keep jacking up the price at will and make more money out of us, and at that point we wont have a car and instead of buying one we will better say pay 5$ extra and take Uber and eventually reach a state where we spend twice the amount or owning a car per month on Uber and some smart guy figures out this and then we all go back to owning a car using Uber rarely at times of need.
Y go the long route we can simply stay in the current or previous state and use it like a taxi rarely wen needed.
But $11,783 per year? My new little Hyundai hatchback cost me $12,000 in 2010 and is now around 7.5 years old. So even if it was completely worthless by now (which it isn't) the depreciation couldn't have been more than $1600 per year.
I was thinking about this the other day, and it's really all about status. You don't buy a BMW because you think "this is a great deal and a great piece of engineering, what a great and practical use of my money!". You do it because you want people to know you have a BMW. Which I guess is great if you associate with the kinds of people that care about wasting money on perceived social status, but absolutely doesn't make sense if you care about making a smart financial decision.
It's not all just status. There are people that appreciate the handling and the performance they get driving a BMW.
I bought a second hand BMW because I wanted a car that I'd enjoy driving, didn't care about the social status at all.
> There are people that appreciate the handling and the performance they get driving a BMW.
My brother was a panel beater and most of his friends mechanics, when growing up I was always told the worst car you could buy was a BMW, they were for people who like to think they have money, but more often than not those people are paying off the car, but it costs more to maintain the car than it does to buy it.
Personally if I had the money for a BMW, there's plenty of other cars that are nicer, better performing, and better handling, than a BMW. But I would rather just buy a Toyota and drive it till i died. Those things are cheap and last forever.
I’ve noticed that many of my friends simply accept that leasing for $200-400/mo in perpetuity is simply easier than dealing with a car that begins to become unreliable. Humans are weird in that spending $1,500 on car repairs one time in 24 months just seems way more jarring than spending $300/mo but spending $0 on repairs.
They’re paying extra to not have their routine interrupted; depending on what else is going on in their life, it may be the right decision. Money is a tool to do things you want, not a scorecard.
People are risk averse; predictable expenses are easier to plan around than unpredictable ones. What if you're unlucky and it breaks twice in a year? Or the first repair is bungled and you have to go to a different shop, and argue the first one into giving you your money back?
Because eventually, you could just lease a new car and not worry about maintenance or warranty or your own safety anymore. My mum has a 2005 car which she continues running due to the reasoning of "why change the car if this one works" - and that's correct, but I added up all the repairs we did to it in 2017 and the parts + labour totaled about ~$6000 in that one year, and it looks like 2018 will at least match that. ~$6000/year gives you $500/month that could go towards a lease on a brand new car and then you don't have to worry about anything, instead of pumping money into a car that will eventually break down in such a way that fixing it will cost more than it's worth.
$12k over 2 years for maintenance seems extremely excessive. That can replace the whole engine in a small car. It could also mean the car never had any proper maintenance done (like oil changes), and now serious engine parts are having to be repaired.
I have a '05 Tundra and just had to replace the entire ABS system, so while it was being worked on also did all of the belts, water pump, etc... and came in ~4k. There shouldn't be any maintenance except oil and maybe tires for the next 2-4 years.
It's a Land Rover Discovery 3 - we had to have the whole undercarriage redone because it was getting some serious rust, so it had to be sand blasted and re-done from scratch, that alone was about $4000. Then we spent $1000 on a set of new summer tyres(winters will come next this year I suspect), and the A/C compressor seized up completely - that was about $1000 for the part + labour. This year we had to do the suspension maintenance, replace the brushings etc, that came to about $1500. Then the rear locking differential broke, it was about $2000 for a new one + labour. And just last week the car went into limp mode, the suspension lowered, the transmission wouldn't really shift - had to get the car towed to a LR garage. Turned out to be some tiny sensor, but diagnostics, plus part plus labour plus towing came to about $500. Then you have the annual maintenance, but that's not a lot compared to the rest. The car has about 200k miles on it and actually the engine runs absolutely fine, no issues there.
Yes, I guess it's a very complicated car with loads of electronics that can go wrong, and when they do go wrong it's expensive. But it's not a far fetched idea that my mum would be better off with getting a brand new car which doesn't suffer from random issues where you have to get the car towed to the garage.
Ouch. Those old Land Rovers are known to have issues, but people love them. $12k over 2 years is still cheaper than buying a new one for $50k+. Obviously it's a different conversation if your mom is willing to step down to a small Japanese hatchback or something cost efficient. Otherwise, it is like a guy I know complaining about paying $600 to replace the headlight assembly in his Porsche. Well yeah, it's a Porche.
Those old land rovers rust like crazy for people who go to the beach and never wash their car after, the salt water (even when you drive near the beach and not on) causes major rust.
Car maintenance requires the most expensive thing of all, time. Plus tools, plus experience. Once you take apart something on your car, if you can't get it back together, you're out of luck.
You also have to be physically strong and able to get to lug nuts and other rusted connections loose. I highly doubt most women can take tires off and lift them and put them back on, especially for SUV.
I think oil and air filter changes can be done by most though, especially if they get a fumoto valve. I would hesitate to recommend brake jobs for most people though.
" I highly doubt most women can take tires off and lift them and put them back on, especially for SUV."
This is either sexist, ignorant, or both. I put myself through school working as a mechanic, and very few jobs require more strength than the average 10 year old girl has. That is the entire point of tools, they provide adequate leverage.
Additionally, it seems sexist to single out women, what about older men? I've certainly met plenty of women physically stronger than me, and most healthy adults should be able to lift even a heavy 60lb tire the few inches necessary to mount it. Unless you are installing a transmission, if you are putting in significant physical effort then you are using the wrong tool or technique. For instance, for the other commenters that mentioned difficult lug nuts-
Go to harbor freight and purchase a 1/2" breaker bar, at least 18" long but preferably 24", along with a socket to fit your lug nuts. To crack the lug nuts, use your body weight and bounce on one foot. Even if the shop that installed them didn't over-torque the nuts, road grit and salt can make them very tight. Carry that tool instead of the provided wrench, it is far easier and safer, and shouldn't cost more than 25$.
By writing women, I am alluding to the fact that many of almost 50% of the population might not have the muscle mass and/or biological build to swap out tires. It's not sexist, it's just shorthand for writing all those words. It doesn't make sense to specify older men (or women) as I would think they are generally precluded from conversations about activities requiring physical strength, so it would be superfluous.
Some women are stronger than others, some aren't. But in my experience, women will probably have problems getting a lug nut off that has been tightened too tight with an air tool and/or is rusted. I personally have had problems getting them off, even with a breaker bar, and I wouldn't expect everyone with a car to go out and buy a breaker bar either.
The meat of my comment was that it might be reasonable to expect a large portion of the population to not be able to do what many think are simple routine car repairs, such as brake jobs, and I attempted to prove it by illustrating an example.
Taking my car in for maintenance requires time as well. For most things I'm time ahead doing my own work. I get parts while doing a different errand, so it is comparing time of driving to the mechanic, waiting for the shuttle, the drive to work, and then the reverse on the way home.
Of course I already have nearly all the tools (except every car needs some special tool, so add $15 one time).
I thought that was Bloke 101. Actually, the hardest part is getting the lugnuts off. When your tyres were fitted, they likely used air tools to put the nuts back on. I’ve found you always need to ensure you can remove them with the spare hand tool later - otherwise you may end up with a flat somewhere and be unable to remove the wheel.
Yep, I've sheared some tools trying to get them off. Being able to rent a car with air tools would be nice for DIY stuff. It would probably be too expensive insurance wise though.
Agreed, in that the fasteners get stretched, fatigued, difficult to manipulate.
But it still happens. Having a means of greater torque gets past that failure condition and reduces the work burden.
And that's a net good. Older people, young, small, women with nails, guys who may not be very strong, someone hurt or sick all see a much improved task, well in bounds for them.
This is precisely why I brought all my kids up knowing these things. Same for anyone I've helped. I'll leave it with them and just go get another lever. cheap.
Better to be equipped to get this done than be stuck, merely understanding one should not be, but is anyway.
A small extension of this thinking means equipping the vehicle with common sense, useful tools. BMW does this from the factory. Most go unused, but its ultra cheap insurance. May actually end up applying to another vehicle. All good.
It really doesn't take much to equip a vehicle for trouble cases. Anyone who does is likely to get a nice return on that modest investment in skill and gear at some point in their lives. This is true even when their skills are somehow lacking, or they become physically unable somehow.
Getting help means people, and it often means tools. Having both is again, cheap insurance.
Talking about a damaged fastener on your way from the trouble incident is a great problem to have when compared to the side of a road.
Sure, it's bad. But the driver does not know that, may never know that, unless they actually do work on their fasteners. They are not likely to do that work, until they must, and that's on the side of the road.
And, given they must do that work, having the means to complete it makes all the sense in the world.
Nobody has to tighten anything that way. I've never shown, nor recommended people do.
It's all about having the means to change a tire, should that need arise. And that means removing the fasteners.
So, I'll tell you what. I'll continue carrying a lever, and will continue to not be stuck somewhere ugly, and you do whatever you want.
Everyone can and should express concern when the job is done poorly.
Nobody should be stuck because it was done poorly, unless they want to be, and I for sure don't. Nor does anyone I know.
Well, maybe not in a timely fashion, and maybe not at all if the shop who put them on really turned the bolts. But in general, I think it's more about leverage than raw strength. Also, a tire isn't that heavy unless we are talking about a non-standard vehicle. And, as a bonus, you actually don't need to lift them all that much... they roll.
Serious question. When I raised my kids, boys and girls, all of them changed tires, among other basic car things. And yes, doing an SUV was part of that.
There is skill needed to avoid the most painful lift, but it's not hard to obtain.
I'm 50. Would not think twice about a tire change on any vehicle I drive.
Are we just not teaching people these things anymore?
I've experienced it. A tire on an SUV is like 50lbs. If they've been tightened by a shop with air tools, it can be hard to get the lug nuts off, especially with the tools that come with the car. I've sheared off a bit at the end of a breaker bar because the lugs were so tight.
A car's tire, I can agree that if the lugs are not improperly tightened too much, anyone should be able to do it. But for a full SUV, a 17"+ tire is a bit much to ask a petite woman to handle in my opinion.
That's way too tight! Fortunately, I've not sheared anything.
And it's not an ask on my part. I have shown how it can be done, and whether she does it isn't material. Worst case, she can instruct someone who has strength.
I think that's a bit uncharitable. There's a far more rational reason which is that many people don't have all the money to pay upfront and finance makes it manageable and predictable.
In terms of lease options, if all the maintenance / repairs are covered then, again, it kinda makes sense, right? You're effectively paying a bit more each month, but you know what you're in for and there's no chance of a massive unknown catastrophic failure breaking the bank.
It's all well and good saying that car maintenance isn't scary, but as the owner of car that's started smoking — it's not much fun taking it to 5 mechanics, all of whom haven't managed to diagnose the issue.
Leasing is a very specific financial instrument, like balloon financing (which I think Mercedes is the only manufacturer that still offers), which is pretty overused. The "I don't want to worry about maintenance!" type of person would typically save money buying the same car on a 4 year loan and trading up every 4 or 5 years compared to leasing for whatever the optimal term is (typically 30-39 months, usually 36).
You're not necessarily overpaying on leasing. It's just a math problem where a few of the variables (base MF, residual) are static, a few are easily negotiated (cap cost), and a few are less easily negotiated (dealer MF mark up).
Not even remotely, but there is an /r/personalfinance type of mindset floating around that if you're doing anything other than paying $2,000 for a 2+ decade old Corolla or Civic, you're an idiot.
Depending on how much you can live without it, I suppose, but old quality cars actually hold up really well.
I bought a 1996 Mercedes-Benz E-class last year, it was 21 years old then. It cost me about 2300€ (with a set of winter tires), I did about 15k kilometers in it so far. Pretty much the only servicing I do on it is the non-critical stuff: sunroof, parking sensors etc, but aside of the „vanity stuff” it pretty much runs flawlessly for me. May just be survivor bias of course, but in any case if you don't need 100% reliability 24/7 (in which case you can always take an uber :)) I think it's a really viable choice. Plus buying a used car is afaik more environment friendly than buying a brand new Tesla or Prius or whatever.
Oh, absolutely; I can definitely feel the impact of the 12-15 l/100km ;) But since it's Poland, like seemingly half of the cars here this one too was converted into an LPG+Gas hybrid, halving the fuel costs.
That depends. 14 years ago I bought a brand new car. Even though I get 45mpg (real, EPA says I should get 41 highway), I've still spent more on fuel over the last 250,000 miles than everything else combined.
Bought a £8k 6 year old car, sold it for £2.5k after it broke and wanted £2k for repairs 6 years later. So £1k/year.
Current car costs £0 in tax, £0.02 p/mile, £360 insurance per year
Both cars I owned were used, but if I had excess money I would probably go for a new car because of how shit the 2nd hand market can be. You never really know what you buy unless you pay a 3rdparty expert to verify that the thing you're buying isn't critically flawed in a non-obvious way.
In the US the average length of car ownership for new cars is 6.5 years [1], so it does matter what your car is worth after this time. Not sure if it amounts to ca. 6,000 USD per year, tho. That's a lot of depreciation.
The type of person who buys a brand new car probably likes a brand new car (new features, status, reliability, etc) and that doesn't change after a handful of years. Or the other way around, the type of person who wants to maintain an older vehicle is probably not the type of person who will buy a brand new car.
Obviously there are exceptions, but the used car market is much larger than the new car market so most are selling.
Not taking deprecation in account when buying a car makes the calculation way off. It even applies when you own it the whole way from the factory to the junkyard.
A rule of thumb that I use is that the value of the car halves every fourth year. So if I buy a car for $20 000 I can count on a monthly cost of $208 for the deprecation the first four years, that exceeds all other costs of ownership in my case.
Regardless of age and mileage there's a floor value for a vehicle based on vehicle type, options and condition. In states with annual safety inspection anything in passable condition gets an artificial price bump of about a grand compared to the same vehicle with a cracked tail light, 1/32 less tread or a missing sun visor.
I think he may be talking 'accounting' depreciation, which is what accountants would use when calculating the balance sheet asset entries on company cars etc.
NB: Can't read the site or full article - not sure if it is the 'HN Hug of Death' but it is timing out for me.
One thing I think that is overlooked here is drinking alcohol.
Even if you drive and pay for the car payment and insurance at a very cheap rate of 200/month for both, there's gas and maintenance which should be at least another 50-100 per month.
But if you're a drinker even casually or you go out just on weekends you will have to uber and leave the car and incur uber costs regardless. After work Happy hour? drink or two at the end of office day? Can't drive.
Point is if you are a drinker for whatever reason there's huge perks to uber and not having a car. Also tax wise uber being used as transportation versus a vehicle where commuting is not deductible(starts from place of work not to as contractor). Overall the tax write offs and being able to drink is a huge perk should your lifestyle be similar of course.
This seems to assume that there is not a daily commute. 267 rides for the whole year is low if one were to need to drive to work. The author never seems to mentions what they do on their day to day commute, but I guess if they are a Googler there is probably a free bus?
Yeah, google has a bus system. If he was going to/from work every day w/ uber that would be and additional ~470 rides per year, and for him they would be extremely expensive (SF <-> Mountain View).
Sure, you save a lot of money if you're pitting uber vs $50,000 of currently depreciating BMW that was bought new for $80k. If the author had bought a reasonably priced car (TM) the calculations and conclusions would likely be very different. Hell, his second car is reasonably priced (or reasonably old), but the egregiousness of the first car still invalidates all his conclusions. Had he had a reasonably priced car, there's no way uber would be cheaper.
I can't read the website, hug of death maybe? I would like to point out that in some other countries Uber fare prices are much higher. I live in The Netherlands and I remember 1 km to equal about 2 euro's, whereas in the US it would equal to about $1.25, meaning that Uber is twice as expensive in The Netherlands. I don't know how it is now, but my point is that it is quite country dependent.
I live in London, UK. I can’t drive. Last time I was behind a wheel it was 1999 and I failed my driving test.
I get the train places and taxis the other end (Uber if the city allows).
I’ll admit a few times a year I think it would be nice to drive and I intend to take my test again one day but It’s down list of stuff do with learn the banjo and work on my Haskell
You can't really compare owning a M3 to riding Uber though.
If you are a type of person who cares about how fun your car is, Uber is not an alternative for a M3.
If you're the type of person who only cares about going from point A to B, you shouldn't have bought a M3 in the first place.
E.g. in my area sometimes it's much cheaper than its competitors (up to 20% difference) and MUCH cheaper than a standard call taxi (up to 50% difference), sometimes it's a double from competitors prices. You just have to catch the right moment. I even have an application for my local region which estimates prices in different services right now and suggests the cheapest option.
Abroad (in countries like India) Uber (or similar services, e.g. Ola) is the easiest way to get an honest price without heavy bargain (which is also time consuming) and complicated explanations where you wanna get.
When I come back to London, Uber seems ridiculously expensive compared to Chicago. Plus the lack of Pool options (even to/from Heathrow, etc) doesn't help.
How come noone is pointing out that paying 12041 to Uber is paaying 12041 to undermine society by ignoring the rule of law and to roll back protections organizer labor achieved over a hundred years? Shame on you.
Some laws should be ignored; it's how the law system improves. A law that is obeyed by everyone will never be changed, because the opportunity cost is not made visible.
Society would collapse if every company could pick which regulation they want to ignore. That is not how the law evolves. Protests, campaigns etc swings public opinion yes but not this.
Taxi medallions weren't a huge win for organized labor, they were a huge win for organized crime. Taxi drivers have been getting the short of the stick for a long time, it's not like it was a lucrative position before Uber came along.
Truly an awful line of reasoning. To add a little substance to that comment per HN guidelines: they could be being investigated now, the gov may not have caught up with their illegality yet, etc. etc. etc.
right, and the comment that I was replying to was just assuming that it was illegal even if they haven't been convicted... I know nobody likes Uber here, including me, but it's a bit of a witch hunt
> If what Uber is doing is illegal, why are they allowed to continue operating?
Because the set of things that are wrong is a subset of the things that are illegal.
Uber also has a documented history of doing actual illegal things. It even went so far as to build technology specifically to avoid law enforcement authorities:
I think the real problem is that you had expensive cars. No shit you save money when you take ubers rather than owning a BMW M3 and (what I assume) was a decked out wrangler. If you bought a sensible car, your monthly costs could be much lower.
To help quantify this a bit - in 2008 I bought a brand new Honda Fit (cash) for about $17k. Has 120k miles on it now, very low maintenance, few repairs, definitely a budget/economy car. Over 10 years, another $600ish a year in gas (lifetime average of 35mpg), 4 sets of ~$400 apiece tires, ~$80 in oil changes a year, another ~$700/yr in insurance, looks like a TCO of $32k (and I'm sure I'm leaving stuff out). $266/mo is quite a bit more than what this person has spent on Uber.
The big difference is this person is only using ~114 rides/year, whereas just commuting to work I use my car for ~400 rides/year. Add in one out and back weekend trip (ignoring shopping trips through the week etc.) and we're up to 500 rides/year. If my average ride cost were the same as this person ($17.50/ride) I'd be looking at over $700/mo.
I have a Honda Fit and it's a beautiful car. I am in love with it, and I don't think I will ever buy another type of car again. The maintenance costs are ultra low, much lower than my Honda Accord.
But there is no way it gets 35 mpg. I have been keeping track meticulously and the maximum I get is about 30 mpg, and it drops to 27 if I do any city driving. If I do only highway driving, I can get up to 320 miles in a single tank, but I'm driving on fumes at the end. I normally get about 280 miles per tank, which is about 27 mpg at 10.6 gallons.
Also, with my 2011 Honda Fit, I'm at 120k miles. I've had 2 sets of new tires, but no other maintenance besides regularly scheduled maintenance.
So I have also meticulously kept track of my mileage, from January 2013 to November 2017 (my wife began driving it in November, and I didn't have an iPhone app to track it prior to 2013). The current average over that time frame is 36.8MPG. Worst tanks I have are when I was only on the interstate, would get 34MPG.
Mine is an '08 - they seem to have gotten heavier in later years. It also has a manual transmission, which offers more flexibility for conserving brakes and fuel. My wife gets more in the 32-34mpg range, but doesn't keep close tabs on it - she also now has a couple car seats and toddlers in the car, so weight penalty.
EDIT: There might genuinely be an issue with your car - I have a 10.8 gal tank as well but routinely get over 400 miles per tank - 370 if I've been driving more aggressively.
Fitniks unite!
MPG on the Fit depends on how you drive it. It hits max MPG at about 55MPH, if I recall correctly.
Now in TX you have highways with 85mph speed limit (most are 75), and in CA people drive as if the speed limit was 85 anyway - which is how I end up with the same mileage as what you report.
You're right that it's way cheaper, but you did forget to account for the opportunity cost of the $17K up front (about $1700 in interest in a simple savings account, but depending on how you invested it, you may have done better).
The fit is probably worth more than 1700$ right now. You could also have invested the savings to make even more money.
Still, the goal is a ballpark not an exact number and that's plenty to say Uber would have been a poor fit.
> The fit is probably worth more than 1700$ right now.
Yes but the $17K plus the interest would be $18.7K. :)
And like I said, it's still a much better deal than Uber, but the opportunity cost of the up front money is often missed in these types of calculations, and can be significant.
I think you're both making good points here but just to clarify:
I did not account for the interest that could've been earned on that $17k (which could conservatively be $1700, aggressively could've been another $17k).
I also did not account for the residual value of a 10 year old 120k mile Honda Fit, which is probably in the $5k range.
17k - 700$ a month stops being 17k very quickly.
You need to look at pricinciple - expenses + interest for each month on both sides. Consider if he had a pile of money to cover 700$ a month in Uber driving and what would happen on each path.
You paid $400/tire? isn't that kind of expensive for a honda fit?
Pretty sure that's 400/set and you need to buy a new set every few years.
Ah, good point. I was referring to about $400 per set of tires including installation. My original post was unclear in that regard.
Besides that it could be argued that buying an M3 is not an economic purchase, it’s an emotional one. Presumably you go into it knowing it’ll have higher than average TCO, that it’s not designed as a commuter vehicle, and you accept the cost because you are a car enthusiast - and taking Uber ain’t your bag.
It’s an odd reference for the comparison.
Hi, I'm Neal, author of this analysis. Yes, you nailed it. I was just thinking today about what older car (2014 or earlier) I could buy for $10,000 or less that had adaptive cruise control and lane assist. That would allow me to disengage mentally a little from driving without suffering depreciation. Is there a way to search for what's the oldest car (e.g. Civic) that has these features?
Please don't disengage mentally from driving. If you think you need to do that, take a break instead.
Very much this. Disengaging mentally from driving is a great way to "accidentally" kill somebody.
Don't knock adaptive cruise control until you try it. It is significantly better than plain-vanilla cruise control. I've found that when I use it, I tend to stop caring about if I'm driving "too slow" -- it makes me a less aggressive driver.
My current car has it. The person you're replying to is still correct, if you need to "disengage from driving" then pull over and take a break.
Adaptive cruise control makes driving less stressful/more pleasant but you still have to be mentally there. No system is full proof, and certainly not at this stage.
This might be the funniest thing I've read all day. It's either incredibly snarky / cutting or adorably out of touch / oblivious.
I have a feeling this was completely serious. He's a product lead a Google. He's more important than the rest and shouldn't have to pay attention to the road because his mental time is just so damn valuable.
He's more important than the rest and shouldn't have to pay attention to the road because his mental time is just so damn valuable.
I stand corrected ... THIS is the most hilarious thing I've read all day.
Edit: Removed the other adjectives because clearly, humor was intended.
:) i try
Personally, I have no idea what cars have these kind of features. I know that civics had these features as of lately. I like to have as little technology in my vehicle as possible. I think disengaging in driving is very dangerous. I am not happy with the trend as I love riding motorcycles, but don't want my family publicly shamed by Tesla when one of their camera's overlooks me and kills my ass.
> That would allow me to disengage mentally a little from driving without suffering depreciation
This is the most "BMW driver" quote I have ever read.
Adaptive cruise and lane assist weren't available in "cheap" cars in 2014. You'd have to look at something like a 2014 BMW 5 series, which would run you about $20K.
You can get a model year 2017 (first year it came standard) Toyota Corolla with adaptive cruise control and lane assist from about $11k and up, according to a quick AutoTrader search.
> If you bought a sensible car, your monthly costs could be much lower.
$12,041 over 6 years is $2006 per year, which is about $167 per month.
All of my friends pay about that much just for car insurance every month. Throw in a car payment ($200/mo. - $500/mo. depending on the terms of the lease), gas, and maintenance (regular oil changes, tire replacements, etc.) and you'll end up way north of $12,000 after 6 years.
You have multiple friends paying $2K/yr for car insurance? Are they amateur demolition derby drivers?
I pay just over half of that for three cars and two adult drivers. (and in Massachusetts, which does not have a fully open/competitive insurance market.)
Auto insurance rates are greatly variable throughout the US and many people cary more than state minimums. Near $200/mo., is pretty normal in California. My auto insurance, with a perfect record is $3100/yr with a $5 million umbrella for three cars and two adult drivers in Idaho.
I just renewed my insurance in SF for $555/6 months. I have progressive, high deductible but coverage for me, other driver and all that (100/300/100).
Thats pretty good. Can you share a bit more details about your demographics/driving history. I pay ~1600/yr with metromile and i have a good driving history. I'm in SoCal.
Surely - Demographic, ~30 year old male, married. (Getting married didn't drop it as much as I was hoping but did decrease it $150/year.)
Wife and I have not had any traffic infractions in over 3 years.
I haven't had a traffic infraction in at least 3 years (moved to West coast 3 years ago). ~30 year old male, married and are insuring a 2015 Cherokee with $2,500 deductibles.
My advice, if you can set aside $2,500 or have it in savings I would move your deductible up and use insurance for severe accidents. Don't use insurance to replace a cracked windshield.
FWIW, depending on your state and policy, "glass only" claims don't affect your premiums. Agreed with the general principle of a higher deductible though.
As another data point, perfect record, about $700 a year in insurance for my spouse and I sharing a car in Boston.
Agreed on the state minimums, which are a joke ($20K and $40K I think here).
We carry many multiples of the state minimum, which was needed to secure an umbrella policy for the excess. That doesn't include the umbrella, which we have in place mostly for other reasons (and is cheap).
I'll throw a data point in here: Three vehicles (2014, 2009, 2006), no accidents, rural Midwest. ~$2,000/yr for insurance with standard 100/300/100 coverage.
different states' laws can have a major impact. I have no experience with insurance in MA, but in Michigan 2k/yr per car would be considered fairly cheap. My insurance is routinely near the cost of the car payment itself, and I have a good record and multi-product discounts with my provider.
We definitely have a problem here in this state though.
I once had a payment to an insurance company lapse, so I was technically without coverage for one month. Because of this, all insurance providers insisted the bare minimum I could pay for any auto insurance was $400/month. Then I got a speeding ticket, and it went up to $600/month, and then $800/month. That's $9,600 a year, for auto insurance, for one person. (Fuck you, Progressive)
They claimed the rate would stay that way for several years, so I got rid of my car. I was going to get a car again once the rate lowered, but it turns out I didn't need one. Now I'm saving bundles of cash. (So, in a weird, way: Thanks, Progressive)
I used to have to pay several hundred dollars / mo after I had a major accident with a personal injury involved and was in my late teens / early 20s in Washington state. The policy renewals were nearly $3k each time for just myself even under my parents’ policy (I was supposed to not be insurance due to the massive claim the company ate). I’ve heard of a special insurance policy for a basically legally blind driver that gets in accidents frequently that costs $800+ / mo.
Even the most bare bones policy I could find after that dropped off my record was $140 / mo for state minimum coverage at 22.
I paid more than that when I was a teenager because insurance companies assumed I'd be street racing like all teenage boys apparently. It took less than a year to spend more on the insurance than I did on the car. Of course the cost of your own car barely counts in insurance rates, which are dominated by healthcare costs for the people you hit but don't quite kill.
Annoyingly I never made a claim so all of that money was wasted in the end.
Young men get hit pretty hard on insurance prices. It was looking like 100$ per month for me and was enough to push a car payment into the monthly expense range I didn't care to have. I work from home though, so I don't drive a lot and have the luxury of not owning a vehicle. I could take Lyfts everywhere I go and definitely come out ahead of a car payment + insurance.
I live in Florida. Paying less than $200/mo. for insurance before the age of 25 is almost unheard of.
I live in Vancouver. Insurance for new drivers can start as high as $5000/year.
I have a license and a car, my girlfriend doesn't.
My girlfriend takes an Uber home from work every day right now (I drop her off in the morning then head to work. I'm still at work when she gets off work). It costs her an average of $25 per trip. 25 * 5 days a week * 4 weeks per month = $500/month in expenses. That's for a single 20 minute Uber (usually Lyft now, it's been cheaper) a day, that's it. I'm surprised the OP can get away with $167 in Uber expenses doing without two cars as the OP suggests.
It's about 40 extra miles I drive a day for her also, since her work is in the opposite direction of mine, so tack on the extra maintenance required for 800 miles per month on my car (hasn't been too much yet, but the car is starting to get old... let's say $40/month ), along with that much in gas (right now about $104 a month), and our total cost per month for her to go without a car is $644 a month.
My car payment is about $300 a month, so let's assume she can find the same or even less in a lease, especially since her credit is better, and I already estimated the fuel and maintenance as $140, but it'd transfer over to her paying it. Then she'd probably have to pay about $100 a month for car insurance (I pay less, but she'd be a new driver), and therefore our total costs for her to drive are probably around $540 a month, or about $100 a month cheaper.
To me that's a pretty slim margin. The main reason I wouldn't mind her starting to drive is it wouldn't be necessary to take her to certain places and save me an hour out of the day every day, not due to savings. Which I always assumed we would save a lot of money if she drove, until I did the math.
Also I live in the suburbs so if neither of us had cars our Uber expenses would be like $2006 a month, not per year, based on how much we drive currently. But it does look like having only 1 car in the household might be feasible, instead of the assumed 1 car per individual, like was the default in the previous generation.
North of $12,000 and you'll own a car. The no-car-movement is great for cities and people with lots of patience.
You'll never, ever take Land Cruisers away from me.
> The no-car-movement is great for cities and people with lots of patience.
I don't own car (nor have any intention of doing so) due to being too blind to drive safely, but not blind enough for any sort of government assistance.
(I'm not legally prevented from driving, I'm being considerate of the safety of others.)
>The no-car-movement is great for cities and people with lots of patience.
Unfortunately Uber is kind of undermining public transportation though. In my city transit ridership is down, which ultimately impacts funding.
I can sit outside any sort of venue/party/bar and watch Ubers pull up by the dozen. 5 years ago most of those people would have been walking to public transit because cabs were more realistically priced (for the medallion owners at least, the drivers often got shafted there too). Uber trips often cost less than the price of simply stepping foot inside a taxi.
I've talked to my neighbors (6 college students sharing a house), and they've literally never taken public transit since living in the city, and we're ~5 minutes from a major bus station and ~10 minutes from a subway station. I was flabbergasted.
Of course, traffic is worse than ever (this is attributable to multiple factors not limited to Uber/Lyft).
I can't stand what ubers and lyft do to congestion. The drivers have no incentive to stop in marked areas or even pull over to the side when picking up/dropping off. Most of our busier two-lane streets are now 1-lane congested behemoths thanks to ride "sharing". It does get me on the bike more though. There aren't enough cops to enforce or care about the problem, and unlike some European countries, the culture in the US around citizens reporting traffic violations is nearly non-existent, so everyone gets away with it.
Amen. Much of hackernews fails to understand that some people love driving.
Car culture is huge thing. I just bought an Audi S3, and derive pleasure whenever I hit the throttle.
Hi, Neal here, I authored this analysis. I totally get you. I love driving. M3 is the ultimate driving machine (tm). But sometimes I prefer to do other things. Selling my car let's me drive when I want to and ride when I want to. I've found my correct ratio is 1% driving, 99% other things. Each person will have their own ratio.
Exaclty. I just made a similar comment down below saying that some people choose a car with their heart not their head.
Okay, but you can expect a car to last upwards of 10 and you own it. If you decide you want to drive down the coast, you can do just that. I think services like this are way overhyped and wouldn't exist if they saved you money.
Well they actually operate at a loss, so it wouldn't be so surprising if you save money using uber instead of owning a car. Magic VC money subsidize your trips ;)
this myth again.
uber makes money on every ride. they operate at a loss annually because they invest everything in expanding to avoid paying taxes - like most companies do.
It's quite true that they make money on every ride - what I meant is that we get "cheap" rides while they try to win a "winner-takes-all" monopoly, because they can afford to "invest" in expanding, with heavy losses (4.5B in 2017).
It's also true that it's not sure they will ever reach profitability. Therefore, my comment.
> Throw in a car payment
They said sensible car. A car you need a loan for is not a sensible car.
At least last year, "new car loans" had a really low rate, and I think as long as it's newer than 3 years old and less than 30k miles or something a used car still qualifies.. if you have money making more in interest than the loan percentage, you shouldn't pay cash (assuming you have greater than the financed amount earning interest)…
Interest isn't the killer, it's the insurance. When you owe money on a car, you're typically required to hold full coverage insurance on the car. That is not cheap.
Being as how you can finance a new car for 0% interest, why would you pay cash? Sounds like you're giving terrible advice.
Well, for a start, if you're looking to save money, you certainly shouldn't be buying a new car.
That's not "certain." When market conditions change, you'll occasionally be able to get a new car for less than what you'd pay for a used one of the same type. Drastic changes in fuel cost and manufacturers discontinuing an unpopular model are the sorts of things that lead to this situation.
You do realize profit is built into a 0% loan right? Its essentially an upfront interest payment for the duration of the loan.
What on earth do you mean. Have you ever bought a car?
You negotiate the price you are willing to pay. The dealer has no idea if you are leasing, paying cash, or financing. The all-in price is either financed or leased at a specified interest rate. They do not "add in" an up front payment. That doesn't even make sense, and would be incredibly misleading.
If we negotiate $25,000 for the car,and I finance at 0%, you are saying they up the price to $27,500 to "build in a profit"? Nonsense. The numbers are in front of you and you can do the calculations yourself with high school math. 0% is 0%.
You are totally out of your element and shouldnt be providing financial advice. Maybe that's why the dealer rips you off.
You're wrong. Cash back rebate offers usually don't apply to the 0% apr deal, so the amount financed will be higher. Which option is better depends on the size of the rebate, what interest rate you can get outside the low apr deal, and the amount financed.
Edmunds has a calculator if you need help with the high school math: https://www.edmunds.com/calculators/incentives-rebates.html
If the choice is between you getting a "sweet deal" or the dealer making a profit, you will lose every time. Rebates and magic 0% interest are designed to get you to sign on the dotted line without reading the fine print.
1. The two-word phrase sensible car was not defined by the comment I replied to; it was left up to interpretation.
2. Even if I take your assumption as the other poster's definition of sensible and remove any car payment, gas + insurance + maintenance yields a 6 year cost above $12k. My point stands.
> gas + insurance + maintenance yields a 6 year cost above $12k
This will depend on the individual circumstances. Liability insurance is significantly cheaper than full coverage. Average annual liability insurance is ~$552/year [1]. Driving the ridiculous 12k miles per year that average americans drive, a Prius would burn roughly 226 gallons of gas. At today's price of gas ($2.94), that's $664/yr. At 6 years insurance and gas will run you $7,296. I'm very skeptical of depreciation + maintenance blowing $4,704 over 6 years on a Prius...
[1] https://www.carinsurance.com/average-rates-by-age.aspx
Hahaha, $552/year for car insurance in Florida?
The high cost of car insurance, coupled with the low wages in this state, are a significant factor that kept a lot of my peers in poverty well out of high school. The usual story goes like this:
The end result is predictable: A lot of Floridians work for just enough money to be able to get to work, and as soon as this equilibrium is shattered, our lives fall apart.Charitably, I think the lowest I've seen anyone's insurance payment in this state is $89/month, because they were over the age of 25 and their car fit the requirements for lower insurance rates nicely. They still had a car payment ($400/mo. IIRC) though.
> the lowest I've seen anyone's insurance payment in this state is $89/month [...] They still had a car payment ($400/mo. IIRC) though.
Again: liability insurance is a different thing. When you don't own your car (aka when you take a car loan), you are required to have insurance that can cover the cost of the car. When you own your car, you only need to pay for liability insurance, which is much cheaper.
Your story is all too common in the U.S. It's expensive being poor here. The frugal solution is to have money to buy a car outright. It's tough getting out from under that dilemma.
Yup. There are plenty of sensible options that you can buy outright. Plenty of japanese cars will last well over 200k miles. If you can't afford a new car, get a used one. There's a culture in the US that makes us way to comfortable taking out loans.
Especially when you consider the option (in California) of a Fiat 500e. It'e electric, ~90/month to lease and anywhere from negative $1000 down (when taking into account the CA $2500 incentive you get paid to take it) up to 1500 down.
You can even find pretty good lease deals on the more expensive BMW i3 - used electrics are pretty undervalued at the moment.
Comparing the costs of Uber against ownership costs of 2 cars for 1 person? Why not buy a third car and make your savings look even better?
Not only that, but 2 cars over 2 years; and, measuring depreciation as a cost. Also, comparing the maintenance cost of owning a BMW to riding in an uberpool. I don't know about your locality, but most of my rideshare vehicles are budget sedans or hatchbacks, or hybrids -- much cheaper than 11k a year in maintenance.
Would he have stuck with 2 cars for 10 years, or 2 cars for a year each? 10 years of uber vs 2 cars over 10 years will definitely shift the savings number in favor of car ownership compared to 2 years.
He's counting depreciation of an M3 in there, too... why not buy a fighter jet and make the savings look even better?
He didn't give up his cars until uber pool, so for a great deal of the data he is using uber in addition to his regular car, which limits his uber expenses.
Because the largest portion of his savings comes from the shift to uber pool, this is completely invalid for anyone except a single adult. Anyone with a spouse or children, or anyone doing even average shopping, anyone not in a major downtown, will not be seeing these savings.
He's only traveling around town, and seemingly only using Uber less than once per day, even during his peak usage. Is he using public transportation? Google transportation? Friends? I don't see how one can get to and from work, and run errands, and go out in the evenings or on weekends, and average 200 rides per year (again, during his optimum savings period). Is he working from home most of the time?
He mentions renting cars for longer trips, but this is not included in his costs. In addition, his uber trips are all in SF... like, yeah, if you only travel within a major US city, transportation costs can be pretty low (and why not just use public transportation?).
All of this implies to me that, not only are his calculations wildly off, not only are his uber costs under-reported, but even with all that, the entire, incredibly ideal, situation is reproducible only by a very small minority of the population. Alternatively, the other interpretation is that he was wildly overpaying and under-utilizing his cars before.
Here is a more realistic calculation for a US resident: 30k car, 10 years 10k gas, 5k insurance, 7k repairs = ~5k per year.
vs.
4 trips per day, on average, for 1-2 persons @ $20 per trip = $29k per year. And that's being generous--I'm pretty sure my spouse and child and I would blow through at least $50k a year if we switched entirely to Uber, and we have a very typical travel pattern for the US.
He does use public transportation, but only makes a one word mention of it:
"My rides increased a lot in June 2016, when I sold both my cars. I’m solely reliant on Uber (and buses) to get around town in San Francisco."
Ah. So basically he is not saving money now, he was just wasting it before.
I had the same reaction, although to be fair I think he's still saving money if you only figure the costs of the Jeep.
> Incidentals on the vehicles cost $3,450 per year: $1,000 maintenance, $500 insurance, $1,500 gas (just above the national average of $1,400), $300 car washes (so shiny), $150 registration, and $0 parking.
Let's say 50% of the maintenance and the insurance was the Jeep (probably not, since the BMW should be more expensive to insure), and 100% of the gas costs would go to a single car (balances out the other way, since the BMW probably had better milage). 50% of registration. Stop getting your car washed. Total:
$2,325/yearly for just the Jeep. So on average he's still saving a little bit of money on the Uber. On the other hand, if you just compare the last three years he'd be better off with just the Jeep. The average is very skewed by 2011 and 2012, when he didn't Uber much.
He doesn't assign any cost to wait time; I'd be interested to find out how much time he's spent waiting for his Ubers to show up. I bet Uber doesn't give you that information on your account but I don't have an Uber account to check.
Interesting analysis effort anyhow! I'm critiquing but I like the general idea and I'm glad he published this.
Don't forget to include the time waiting for Uber to show up. That's the real cost of taking a cab IMO.
What you lose in terms of waiting for the car to show up, you gain back in not having to park and getting delivered as close to your destination as possible and not having to walk from the parking spot.
This wildly depends on where you are. Your parking savings will be much higher in SF than in suburban Dallas, where "time for parking" was a foreign concept to me growing up for anything except sports games and big concerts.
There are definitely people who are better off not owning a full-time car, but I agree with the poster above who find it a bit disingenuous to compare to a $80,000 M3. You could definitely find a car that would cost you under 12K for six years -- especially if you already have a car that's all-or-almost paid off.
The factor on the other side of the fence is that though comfort, etc, is usually lower in the back seat of a Lyft than in the driver's seat of your own personal car, you're not having to do the work of driving. If you want to save money, this is labor that'll be worth it to you driving your own cheap car. But if you want to save effort/stress/etc, it's worth spending to not drive yourself, especially in high-traffic areas.
I didn't! Second to last paragraph.
OK, let's make up some numbers...
267 rides last year. Assume, I dunno, average 5 minute wait? So 22.25 hours of waiting; half a week. Huh, that's actually pretty significant given the author is probably making pretty good money in his role.
Yes, and one of them is a BMW that was only three years old at the start of his data collection.
And don't forget this bit - "By comparison, car ownership cost $11,783 per year, most of it depreciation." He's including what is basically an accounting measurement, not an actual out-of-pocket cost!
I wonder what his "savings" would look like if he used only 1 car for himself and didn't get to write off $500+ a month in depreciation.
Hi, Neal here, author of this analysis. You are right, it was an accounting measurement, until I sold the car, then it became a real pocket expense because I sold the car for less than I bought it for, and in that moment it was a measurable cost. I sold the cars before doing this analysis, and included the sales price in the analysis.
Since everyone is already weighing in on their experiences I guess I'll add my own,
I went 2 years without a car and it was great when I was in the period of my life where I wanted to be head down and studying to get a better job. I spent almost nothing on Uber because I used public transit or walked everywhere. I can count on one hand the amount of times I used Uber, seriously.
Even after I bought my house which is in a suburb kind of in Seattle I continued to go car-less which included a 3mi round trip walk to the grocery store. Didn't mind it much, just had to plan around the weather.
However I moved to the PNW so I could get outside and experience it, not spend my life in the city. Going hiking means 80-100 mile round trips easily on the weekend and Turo, reachnow, zip car were just not ideal for this. Cost is prohibitive if you're doing it every weekend. That's a minimum of $80-$100 * 4 if I go out just one day on each weekend.
I bought a beater truck for under $3k. It has 4wd and a bed to toss all of my gear in. It's the perfect vehicle. Insurance is super cheap, only need liability because who cares if it gets totaled it's already banged up. I can run to Home Depot and get stuff for my projects around the house, toss my bikes in the bed, do my shopping. It covers all the bases and gives me the connivence of not having to deal with finding a reachnow car or meeting up with someone for Turo, etc. One important caveat, I also do my own repairs so if you aren't mechanically inclined it might not be the right choice. I only drive the vehicle on the weekends and still commute via bike or bus to work.
I also noticed that because of my inherently cheap nature I wouldn't rent a vehicle to go do these things even if the end result is that it's cheaper than car ownership. My brain just can't get over the fact that I'm directly paying for the hike, or the trip to the store, etc. I think a lot of people also feel this way and idk how to overcome that kind of irrational thought, but in the end the opportunity cost of having a vehicle is worth it, if it means I'm actually getting out and doing things I enjoy instead of staying home or in the city.
I get the sentiment but I buy a new car because of safety features. I drive a Honda,will drive it for many years until something safe and cheap comes along
>but in the end the opportunity cost of having a vehicle is worth it
To add to this point: renting a car not only takes money, but also advance planning. A rental car is not waiting for you to just jump in and go at your home.
I realized I want to see the total solar eclipse 9 hours before it started, and it was an 8 hour drive. Wouldn't do it with a rental.
What is your thinking re CO2 emissions?
> What could $703/month buy you? Well, four years of $703/month and you’ll save enough to climb Mount Everest unguided.
I'm not sure the price tag is what's stopping me from climbing Mount Everest _unguided_ :)
hah, quite a bizarre choice of what to do with $33744
Not so much once you realize the author has actually climbed Mount Everest!
Compare this to Philadelphia, where a monthly Septa pass (that's bus+trolley+subway) is $96. That's a savings of $856/year over Uber. I have been carless for three years and my savings account is very happy now. Regional Rail passes are $105, so you don't have to live in the city, either.
Big supporter of public transit, but this is apples to oranges. Nine times out of ten, the Uber is going to get you where you want to go a lot faster, unless embarkation and destination are both on the same public transit line.
I suppose it varies by city, but to me we're not talking about comparing apples to oranges. We're talking about exchanging apples and oranges for bananas, just in different ratios.
I lived carfree in Milwaukee for a while (picking that as an example of a city that only has bus service), and the time savings really didn't seem that bad once I got used to it. A trip to one of the shopping malls on my side of town was about the worst-case scenario, and there it typically took ~40m on the bus, versus ~20m by car. I like reading and I had a Nintendo DS at the time, so that ~20m difference was spent doing what I would have probably done with the extra time, anyway. I was just doing it without a cat in my lap.
An easy trade, I thought, considering that I was typically spending no more than $10 a week on bus fare. Often more like $0, especially in the summer, when it was more fun to get around by bike. Owning a car or using a taxi service for my main way of getting around would have cost thousands per month. That's quite a few fewer apples, and not a whole lot more oranges.
The author of the linked analysis specifically says they do not mind trips taking longer (Uber Pool is not nearly as fast as Uber X) considering how much money they are saving. I am doing the same comparison: public transit takes longer than Uber Pool, but you save something like 50%. So I think this is apples to apples.
And there are also thousands of metro areas for which public transport isn’t viable for some reason or another.
We technically have a bus system, but it’s a joke.
True, that 1 in 10 where you are faster is in cities like New York or Tokyo. And its not "a little faster".
Hi fellow Philadelphian! I too tend to ride septa or bike (whenever it's not freezing or raining) to work, only using my car a few times a month for shopping or for road trips in the summers / occasional visits to family in nearby states. The car ends up costing me a little under 3k per year in maintenance, gas, and insurance. Yearning to ditch it, but I do like the freedom to go on these trips (I'm usually bringing lots of gear and going far from population centers for camping).
I recommend weekend car rentals. If each trip cost you $145, you could take 20 trips before it would equal the cost of your car's maintenance/gas/insurance. Right now a 2-day weekend Hertz rental in Conshohocken is $60 including taxes and fees (but not insurance). Definitely cheaper than car-sharing, where you pay more to use it for less time.
A good credit card will cover Collision Damage (though you may need to shove a copy of the card's rental coverage in the face of the rental sales associate as they may try to claim it isn't covered). You can pay the minimum liability insurance, or you can get a "non-owner liability insurance policy" which will cover you for the year, saving you money if you rent frequently. Personal accident insurance is optional and may be covered by your health insurance.
The additional cost is for door-to-door service. Not everyone in the Philly metro area is within walking distance to a Septa location, nor do people want to spend the additional time to arrive at a Septa location and then ride to work.
In my city/state, a bus pass would cost you $70 and would be very, very slow in comparison to Uber. It would also entail waiting feet from auto emissions for 15+ minutes while you await a bus which is never on time. Then, you ride the bus itself, it's old and there are bizarre people on there, whereas in the Uber, you get to be by yourself in a back seat. To me, the quality of the ride provided is too slow and too uncomfortable for the slight savings.
I find it hard to believe you _only_ use Septa to get around Philadelphia. I have the regional rail pass for my commute as well and Philadelphia's public transportation system is not great for getting anywhere in the city. I uber all the time to get around Philadelphia to supplement my Septa pass. It still definitely beats a car payment, insurance and the hellhole of parking though.
At least compared to NYC, where I could hop on the subway to anywhere in the boroughs.
I take about one round-trip Lyft/Uber every two weeks (I don't go out much) and I walk around my neighborhood for anything I need. The only place I go that's inconvenient to use Septa is the southeast industrial area with all the box stores (ikea/walmart/home depot/big movie theater).
Hi, I'm Neal. Author of this analysis. You're right about public transport. I would take public transport more if my hotspot worked underground and if it was reliably less disruptive (people bump too much to work with laptop open in socially acceptable way). This sounds strange, but lately I've enjoy taking these silly scooters around town and have been using them more than public transport or uber (in the city). Not sure if they've reached Philadelphia yet, but they are all the rage here in San Francisco.
What would your time savings account look like comparing the 2?
Compare this to free public transit in some European cities
I am European, I have been in most of the EU big capitals and many other cities, never seen free public transport and I almost never even heard of it.
> I almost never even heard of it
Estonia plans to be the first one: https://news.ycombinator.com/item?id=17107317 So it doesn't exist yet, but might come true soon enough.
Not only is free public transport unheard of, it's also pretty expensive. A ride in Barcelona is like 2€+ now!
Free transit is mostly an edge case. It's almost always limited to small cities or municipal areas (including in Europe), and often target the elderly and students. There are interesting consequences to free public transit, such as picking up some new kinds of riders at the same time as turning off other riders. But it can be pretty effective in the right cases.
Baltimore has a free shuttle bus called the Charm City Circulator. It's not intended to move people around the city. Instead it's targeted at a central problem area that may otherwise be prone to increased traffic congestion, pollution, and slower or lower ridership. It also facilitates tourism and gives an incentive for workers to live in/near the downtown area.
The CCC is popular enough that it's hard to get on one heading downtown in the mornings because they're so packed with people heading to work. And strangely enough, it's much cleaner and with fewer undesirable riders than regular (paid) buses in the city. This is probably due to the historically segregated layout of the city and the particular routes these buses take. The biggest problem with the CCC is it hasn't been funded or maintained properly, so these strange custom shuttles are breaking down and there's nothing to replace them. As a result they had to cut down some of the routes, while they also expanded the most popular route to travel farther north.
I live in Helsinki. If you're pushing a buggy, with a child aged 0-6, travel is free on Trams, Busses, and local-rail/subways.
When it comes to long-distance transport (between cities) children travel free, but the parent with the buggy has to pay.
Edit: For comparison-purposes an electronic ticket for unlimited (local) tram, bus, or subway travel would cost an adult approximately €50/month.
Seattle had a free ride area for a while. They ended the program in 2012.
http://metro.kingcounty.gov/tops/bus/ride-free-area/index.ht...
It’s not free though. So figure out how much of your tax goes towards public transportation and _then_ compare.
It's nothing out of pocket though. And that's the point. Also your argument cuts both ways. The US as a whole subsidizes car ownership to a huge degree. Do you want to factor that in too?
> It's nothing out of pocket though. And that's the point.
No wonder politicians can so easily manipulate the public. “I don’t pay money at the time the service is rendered, therefore it’s free!” It is coming out of your pocket, just at a different time.
> The US as a whole subsidizes car ownership to a huge degree.
Are you making hand wavy arguments about wars for oil or something? Last I checked roads are paid for by various taxes, including gas tax, which I pay.
Gas tax pays for less then a third of highway maintenance. The rest of it comes from the general tax pool. As a non-driver, I get to subsidise your 'free' roads.
When you combine the total cost of ownership, subsidies, and infrastructure, you'll find that cars are far more expensive, privately and publically, at moving people than buses.
> The rest of it comes from the general tax pool. As a non-driver, I get to subsidise your 'free' roads.
Unless you happen to use a bus. Then you benefit from it. And as a non-public transport user, I subsidize your public transit. It’s a wash.
> When you combine the total cost of ownership, subsidies, and infrastructure, you'll find that cars are far more expensive, privately and publically, at moving people than buses.
I never said otherwise. I objected to the argument that there is such a thing as a “free” bus service. The OP was comparing said “free” service to paying for a bus ticket. It’s not a fair comparison to make.
> Unless you happen to use a bus. Then you benefit from it. And as a non-public transport user, I subsidize your public transit. It’s a wash.
If we go to a restaurant, and go halvesies on the bill, but I order a salad, and you order a steak dinner with a bottle of champagne, it's not a wash. Subsidies to public transit vs subsidies to personal automobiles is more similar to that situation.
But yes, nothing is free. However, plenty of services are 'free', in that there is no cost to the user, as opposed to a non-user.
How are oil wars hand wavy?
Because it’s a nonsensical argument that first and foremost presumed the US actually engages in wars for the purpose of securing oil.
Securing our "economic interests" is one of the primary roles of the US military, and our main interest in the middle east is certainly oil.
OK, but what does that change? Ride public transport and fund it through taxes, or drive a car and still pay for public transit? You don't have a choice, so it is effectively free.
The OP was comparing out of pocket transport expenses versus “free” public transport, attempting to make an argument that us dumb Americans have to pay for something that someone else can get for “free”. It’s not a valid argument. They both cost money, figure out what that amount actually is before making arguments about relative cost.
As opposed to those free roads that appear magically out of thin air!
The really frustrating thing about this analysis is he completely ignores mileage. However you split it, that's a huge factor in a vehicle's maintenance cost and depreciation. He compared maintenance on vehicle that clearly must be driven significantly more than he took Uber.
Since he also has two other vehicles, he was clearly using those to drive too. He's sold them now, but he doesn't mention anything about the cost of Turo which he suggests as an alternative.
I have no idea exactly what Uber breaks down to per mile, but ridester.com suggests $1 to $2.50 per mile. Let's assume it's as cheap as $1/mile to give him the benefit of the doubt and account for UberPool.
----
At $1/mile, he traveled 12k miles over 6 years - or 2000 miles/year.
* Maintenance on 12k miles would basically be nothing. No major work should need to be done in a 12k window. Probably some wipers, some fluid changes, possibly a minor repair - let's just say it's $500.
* Gas - Let's assume 20 miles/galloon and $4 per gallon. $2400 over 6 years.
* Insurance - The most expensive part. 2000 miles/year is nothing, but insurance doesn't work that way. Let's assume a modest $500/year. - $3000
When you add that up it comes to roughly $6k left over. You can look at this two ways.
1. Try to buy a vehicle in the $6k range and assume no-resale value. You're not going to get a great car, but it will be doable.
2. Account for only depreciation. 12k is mostly negligible miles. The biggest lost will be due to aging. That being said, as long as you avoid relatively late-model year, you can purchase basically any mid-upper car and still break even (like an M3).
Plus, in both cases you get the benefit of actually owning a vehicle and not relying on 3rd parties.
----
EDIT: He also mentions using Turo as an alternative for a car. That opens up the possibility of him renting out an own vehicle on Turo. An M3 would likely catch $100/day or more. Let's say $50/rental day gets to his pocket. If he rents a out his M3 just twice/month (e.g. one weekend) and assuming the driver hits the 100 mile/day standard. He'd add only 14.4k more miles (still not a lot) and make an additional $7.2k. That pays for depreciation and leaves him room to ride share while his car is gone.
Hi there. I'm Neal. The author of this analysis. As I recall, I included the cost of gas, and wear and tear in maintenance. The largest cost of cars is depreciation, and that's kept me from buying a car. The only car I would want (a nice car) is going to depreciate faster than I'm comfortable with. Since doing this analysis I've been carless for 2 years and have used Uber and google buses a lot to get from SF to Sunnyvale where I work and fly planes. Since writing I've used Getaround a few times and Turo never. There's a Getaround next door to me (a nice Volvo) and taking that is often less expensive than uber, but less desirable because I've gotten very addicted to the pleasure of not driving the car that I'm riding in.
I like your suggestions here. I've considered buying a car and renting it out like you suggest, but I currently make $100,000/year doing that with the extra room in my SF house, and that's enough work that I can't afford to extra time to do it with a car also. And I think I'll make more money on Airbnb vs. Turo/Getaround. Homes are easier to monetize than cars.
Again, thanks for digging in!
You get $8300/month from renting spare rooms in your house? That has got to be a big house and you are a /very/ wealthy individual.
I bring this up because it seems like you ride Uber more for the convenience for your lifestyle and less for the cost factor. You could easily buy an old prius and not worry about most maintenance, deprecation, etc. Most ride shares I've been in have been a Prius or similar. As you said, "I've gotten very addicted to the pleasure of not driving the car that I'm riding in." You don't seem to value driving anywhere near being a passenger. Thus, selling the M3. <-- Not sure why you'd ever be buying an M3 if being driven around in a Prius at modest speeds was your thing. Was it just about the image?
Correction, ~$60k/year. Your point is valid that I could buy an old Prius, and I've considered it, or one of those plug-in cars that you can get for basically free after the California rebate, but it won't drive itself sadly. The M3 thing was a bit of a phase. I liked the way it sounded and drove, but I found myself wishing it had better self-driving features and that it was less easily nicked, dinged, and scuffed. One point of clarification; I don't self describe as wealthy or /very/ wealthy. The housing market in SF supports a healthy airbnb market.
you are a /very/ wealthy individual
This is correct. None of these "experiences" have any relevance to your average American (or world citizen)
Let’s not forget about parking!
In SF you pay $400/m for a parking spot and wherever you go you likely need a payed spot too!
So $400 x 12 = $4800
$4800 x 6 years = $28,800 just for the parking spot on your block!
The GSA Rate (about $0.55/mi) is an all-in cost based on medium sized passenger car. It covers, depreciation, insurance, maintenance, fuel, etc. It does not include parking, storage or other costs.
Uber per-mile cost is going to be very variable based on the trip costs. Where I live, the minimum cost of an Uber is about $10. My daily 5 mile commute would be $17-24/day for a total distance of 9-12 miles. Cost of a car for that commute is $6.
Obviously, the numbers really depend on how you drive and how much you walk. If you only drive your Honda Accord 2,500 miles a year (my commute), the fixed costs of a car don't amortize as well. If you drive s 15,000 miles a year, you'll line up with GSA. If you drive more, your costs will drop up to about 20% per mile. (Per mile insurance costs drop faster than increased maintenance expense)
The problem is that reality is a bitch, and cars are generally the most economical way to do most things outside of Manhattan, or in some dreamland where you order everything online.
Even at $1/mile, uber and the like are very expensive relative to the average car in the US fleet. As many companies have cars for business use, that churches use vehicles commonly, and that medical use of cars is a necessity, the IRS publishes guidelines on how to deduct the use of an automobile [0]. From my understanding, they take in account many factors when publishing the standard, from wear and tear, to gas purchases, to depreciation, and to age of car. Going off the IRS, the 2017 standard mileage rate for something like uber should be $0.535/mile or less. I have commonly been reimbursed at this rate when driving my own car for work, job interviews, conferences, etc. and it is the business standard rate.
[0]https://www.irs.gov/newsroom/2017-standard-mileage-rates-for...
I had a BMW and drove fewer miles than that. The maintenance alone for random things breaking (run flat tires punctured, oil leaks, breaks, battery, etc.) was like $1k/yr. Depreciation was also huge over 6 years.
12000 miles in 6 years is 2000 miles a year, not 500.
2000 miles a year is what I seem to drive in SF. 10000 is what I drove in Houston. Another example of how startups can be SF/Bay Area oriented.
Thank you. I'm a bloody idiot. I'll update.
EDIT: I did all of the other math right except for the annual mileage.
Oil changes every ~6 months = $500+ on their own over six years
You'd do an oil change after 1000 miles?
There used to be recommendations to change oil for time as well as mileage. Has that changed? Also, not all driving is equal. Stop and go driving in the city is many times more wearing than highway driving.
It's gotten more lenient.
Lots of newer cars are coming out with 7.5k/6 month oil changes (realistically, that will go well beyond 6 months). Even some cars are coming out with 15k/12 month oil changes.
Definitely longer than the 3k/3 month oil changes of the past.
My Toyota Camry is now 10K/12 months oil change interval.
you change oil every ~6K miles, not 6 months.
Most manufacturers recommend 6-10k miles or 6 months, whatever is sooner.
IIRC, the reasoning is mostly about failures of parts/screws involved in the maintenance.
The labor required to tap a seized lug or corroded filter that gets stuck is a multiple of the cost of oil change. There may be temperature related reasons as well, but getting facts about a topic that fuels passions as much as motor oil is difficult.
I clearly stoked that passion based on the wide variety of reasons one should or should not change based on time, distance or otherwise. And no two reasons appear to be the same (o;
With some egregious appealing to authority.. I will say that as someone who performs oil changes on our daily driver Honda Element, a 1987 VW camper (when it both had the original engine and the new ford Zetec engine it currently runs on) as well as my 2001 BMW motorcycle, 1970s cub cadet lawn tractor and the Harbor Freight engine I transplanted on to the snowblower...
I have never once encountered a ceased sump plug or stuck oil filter. Ever.
I'm not saying the monkey at Zippy-lubers wont strip a plug because he was busy texting his girlfriend at the same time. But I've pulled parts of engines that hadn't see action for decades. This is not a reason for a 6 month schedule
The only advice I've seen, and oddly enough it's not been mentioned in this thread so tack it onto the list of oil change folklore, is acidic buildup due to oxidization and the timeframe on that is roughly a year.
I have never ever seen a filter corrode on something that wasn't literally sitting in a field for 20 years. Oil plugs basically never corrode either, if they fail it is almost always due to some mouth breather at the quicky lube using the air wrench on it and putting in one too many ugga duggas or somehow cross threading it.
IMHO 6 months is much too short of a minimum interval for modern oil. 12 months is a much more reasonable interval.
No, you change it at least every 6 months, more often if crossing the mileage threshold. There are several kinds of oil degradation occuring, one of them is elevated in cars that don't drive much, or only drive short trips. Read an owners manual - you'll see words like 'every 5,000 miles but no more than 6 months'.
There used to be recommendations to change oil for time as well as mileage. Has that changed?
It hasn't changed, it's just that there's misinformation abound.
The standard recommendation is every 3000 miles for non-synthetic, which is very very wrong (too frequent) and serves to enrich quick lube shops at the cost of the environment. Folks with newer cars should NOT follow this recommendation [1], but instead refer to their car owner's manual.
[1] https://www.scientificamerican.com/article/oil-change-truths...
With synthetic oil you are far less often required to change oil due to time. Oil just doesn't degrade like it used to.
Also, oil changes every 6 months was mainly used as an appropriate time frame in case someone forgot to watch their mileage, with an average of ~14k miles driven in a vehicle a year that averages an oil change every ~7k.
No, the 6 months recommendation is due to absorbed water vapor causing gelling and sludge. It's specifically targeted at vehicles that aren't driven often, or only take short trips. In these vehicles the inevitably absorbed water is not driven off by engine heat often enough and they become fouled due to sludge.
The mileage based change intervals are about two kinds of degredation, shear (loss of viscosity), and Ph (exhaustion of wear additives). Shear may be improved by synthetics but additive depletion is not, although it is uncommon to run oil long enough for that to become critical.
As others have noted, the depreciation and savings analysis is very misleading.
Bottom line is that without the cars, he spends about $390 / month on Uber, and likely that average may have increased given the extreme low summer outlier months. In some areas where parking or insurance is expensive, this could mean large savings. In my area (Austin, TX), the all-in cost of owning a car with insurance is minimally more than this figure. You could lease one brand new, moderately priced car + average petrol costs for about the same amount. You could buy a cheap car and depreciation + maintenance would be even less.
But so much of your mental time and energy will be wasted owning the car.
The few times I have been without a car, I avoided going anywhere because having to Uber makes it very real how much I'm spending just to go out each and every time. Like going to the park or to the grocery store. So instead I sat inside.
I'll never go without owning a car again. The ability to travel freely and not feel some psychological burden about doing it is more than worth the cost of a car to me.
NOTE: This is based on my experience living in Austin, Seattle, Memphis, and White Plains NY.
> I avoided going anywhere because having to Uber makes it very real how much I'm spending just to go out each and every time.
This! It's so hard to get over that psychological resistance to seeing a ~$10-15 hit every time you want to go somewhere not too far from your house. Even if I know, rationally, that it is the same or less than I would spend for owning a car, I can't get over.
There's a joy and freedom in owning a car and having to think about the real cost of every mile you drive. Ignorance is bliss I guess?
Had you considered a bike? I've lived in Austin, spent time in Seattle. Ditching the car and using the savings to afford a more centrally-located place in those places could make sense, especially when the alternative is sitting at home doing nothing. It's not that scary to bike in those cities. I always dislike going to the park in a car in general because it just feels like I'm using the laziest and most polluting travel option to go exercise and enjoy nature.
Definitely! I had a bike in both Austin and Seattle. I used it for commuting to/from work a few times a week and sometimes for picking up groceries. It just doesn't replace a car for me though, but it is an enjoyable addition (I didn't always live close to work, the climbing gyms I frequented were far from my home and office, my friends were spread out, and I like to go out hiking on weekends).
I had the exact same experience living for a year in Seattle without a car. I saved some money, but I didn’t want to go anywhere.
Yes. + if you live in a city, you are also fighting for on-street parking nights and weekends, and have to keep moving it every other week in order to avoid getting street cleaning tickets.
Source: Me in San Francisco.
This is sort of by choice though, no? When I was looking to rent in SF, I always asked about parking arrangements. It's not that hard to find places that have garage parking arrangements, even in neighbourhoods with crowded street parking (e.g. sunset/richmond).
Also, SF seems somewhat unique in how bad street parking gets. In, e.g. Toronto, street parking in some areas near downtown is reserved for residents and outer neighbourhoods tend to be spacious enough that households have dedicated parking spaces.
> It's not that hard to find places that have garage parking arrangements
Yes, there are such places. If you are willing to fork out an additional $300 (minimum) for the parking spot.
$300? Wow, that's crazy. Curious whereabouts you were looking. Highest I saw when I was looking was $150 (around oct last year).
$150? No way. I'm talking Inner Richmond, Laurel Heights. Not even SOMA or Downtown where it's over $350.
What area were you getting $150 for?
> SOMA or Downtown
Ok yeah, in those areas, I can see it happening (but then again, I would never rent in those areas if I have a car...)
I was looking for 2beds mostly around sunset and richmond (basically around areas with good elementary schools). I'm surprised you got such a different experience because when I was searching, many places had parking included, and "important" factors like parking/laundry didn't even seem to affect the price as much as other random reasons (e.g. recent renovations, landlord whims, the real estate agent mediating, perceived "transit convenience", etc)
I spent a significant amount of time looking (I toured well over 50 places), and there's definitely a bunch of full-of-$%&@ people out there trying to rip you off. It's hard to find good deals, but not impossible, and I did get a few who even offered to waive deposit/first month/parking or to negotiate.
to me, there's also the factor of liability when I'm driving a car.
explanation, I can drive a car, for fun, to go on adventures, outside of the city, or take a ride at night, but when I'm making a reasonable salary, I'd rather uberx when I commute, and totally focus on work and my mindset, than road safety. Also sometimes I'm very stressed/tired after/before work, so driving is not that safe and safety is priceless.
>> In some areas where parking or insurance is expensive, this could mean large savings. In my area (Austin, TX), the all-in cost of owning a car with insurance is minimally more than this figure. You could lease one brand new, moderately priced car + average petrol costs for about the same amount. You could buy a cheap car and depreciation + maintenance would be even less.
> But so much of your mental time and energy will be wasted owning the car.
I don't follow. I haven't spent much "mental time and energy" on my car since I decided the on which model to purchase and finished all the paperwork. Getting it serviced is convenient, infrequent, and requires little time on my part. Driving requires attention, but I don't experience a notable gain in productive free time when I use Uber/Lyft.
I do live in a car-friendly area with good parking and nearby gas stations, so YMMV.
Exactly. The biggest pain of car ownership is _buying_ the car in the first place. After that, it's unexpected repairs. Gas, maintenance, and cleaning are very easy. Unlike the author, I've never wanted/needed to do work on my morning commute (or anytime outside the office, really).
If you live or work in a bustling downtown, then car ownership is tougher (but that's one of the reasons I don't work in a city like SF).
The monthly savings calculation in this article largely based on the depreciation of a brand new BMW M3. I think it would be good to use an average vehicle depreciation in there for comparison.
The author says they had an M3 that needed replacing; they replaced it with Uber instead.
Yes. I don’t think the poster you’re replying to missed the author’s position; I think they were just pointing out that it generalizes poorly, since the “savings” all pretty much came from that single source, which few other people share.
As the author said: their other car held its value. If he’d had 2x of that car rather than a BMW, the results would look wildly different. Most folks don’t have that situation.
Google cache link:
https://webcache.googleusercontent.com/search?q=cache:j_-ohh...
Uber actually loses money on each ride. So I don't think the same analysis be hold long term, especially when the company starts to raise its prices.
WSJ recently wrote an article on how it was possible to live in SV for free thanks to the VC fueled economy. They gave example of a guy who financed his Mini Cooper using startup deals, which I think is a better deal than subsidized rides ;)
https://www.wsj.com/articles/how-to-live-in-san-francisco-wi...
Archive link:
https://archive.fo/PWVnU
Uber actually loses money on each ride.
This is only true if you're using referral credit. In well established markets (eg San Francisco) very few rides are subsidized, and Uber makes a healthy profit.
Not entirely sure about that, they have very extreme driver turnover and are constantly offering very expensive incentives to drivers.
I wouldn't be surprised if they are somewhat profitable in established markets but I'm not sure if it's 'healthy'.
For which companies are those driver driving post-Uber? There aren't many choices, SF specifically.
Talking about turnover. Any ideas how that's for Uber compared to Lyft et al.?
Hi, I'm Neal, author of this analysis. I bumped up my GCP instances so it should work now. Thanks for sharing the static links.
If you don't buy BMW M3, then Uber won't save you 700/month. Figures look viable only because Vehicle expenses were $11,783 per year. ~The 2008 BMW M3 was depreciating in resale value $8,333 per year. ~
Exactly. He had two very expensive vehicles. If he leased or bought a used car that is not luxury, he could spend less than he does on ubers.
Sure, but now he has someone drive him around (another type of luxury). It's comparing two luxury experiences. Of course driving a beater or riding a bike would be even cheaper.
UberPool is hardly a luxury experience
As a point of reference, I drive a 2009 Kia Optima and average $1800 per year all-in expenses. This is with no car payment (it's paid off), only liability insurance, normal maintenance (including occasional large expenses), and ~10,000 miles a year driven. To add a car payment might be another $2000-$5000 a year.
Exactly. I don't know the use of comparing a European GT car with a badge tax versus riding in the back of someone's accord. A more useful comparison would be to use the model of the average Uber driver
I went carless about a year and a half ago in Los Angeles (wife still has a car) and it’s been awesome.
I had a ratty 2006 liberty. Going through my bank history and tabbing up costs for the previous years I figured if I spent $25 bucks a day on Uber I’d be saving money. (Actually I spend about $18 / day)
Things I took into account were:
- insurance
- gas
- parking tickets, garages and meters
- maintenance (something expensive broke every few months)
- Amex platinum gives a $200 credit / year for Uber
Qualitative-ish things:
- time saved not parking (some days I’d spend 45 minutes trying to find a spot in Venice)
- time saved not forgetting where my car was parked or walking a mile to it
- I do all of my emailing during my rides
- credit card points
I’ll hopefully never own a car again.
Edit: also, zero road rage
Hi there, Neal here. I authored this analysis. I like your analysis too. I suspect the Amex benefit will be a rounding error at most spend levels, but is a nice benefit. I suspect the "I do all of my emailing during my rides" is meaningful as it increases your productivity a lot or gives you time back to your friends a family a lot. You could add to your list the cost a burden of keeping a car clean. Uber forces you to not carry unnecessary things which makes your life, overall, simpler, which often leads to happiness.
Yes! The amex benefit equals a free days ride (ish) once a month.
Yeah the real benefit is not worry about all the worry, not dealing with all the details. Washing a car sucks. Pumping gas sucks. Changing a flat sucks.
I don't mean to be a downer here but you're essentially saying that paying for someone else's asset depreciation costs is cheaper than paying for your own asset depreciation costs plus the remaining value on a car.
The reason it's more expensive to own a car is because you also own the asset. And sure, cars depreciate ridiculously fast and are horrible stores of value, but your solution is mostly saving money by offloading some risk to another party.
Yes, offloading risk. I hope Uber pays drivers enough to justify the added risk.
Hey downer, I was saving money on my shitmobile.
Could I buy another car and it cost me less a month to own, sure.
In reality, I spent about 5k on that crap bucket the last year I had it. What did I sell it for? 5k. Asset it was not.
>The reason it's more expensive to own a car is because you also own the asset. And sure, cars depreciate ridiculously fast and are horrible stores of value, but your solution is mostly saving money by offloading some risk to another party.
This is not why there are savings. You are not offloading the risk of owning a car by using uber, you are allowing cars to be used more efficiently. Cars are expensive because they sit unused 95% of the time. The marginal cost of each ride is extremely high. By having one car and one driver do 100x the rides the marginal cost of each ride decreases substantially.
This analysis looks amazing. We’re currently a two car household with one of the vehicles being a little older and slowly starting to lose some reliability. Before rideshares it would be pretty important to go out and find a newer, more reliable vehicle so I could ensure I make it to work. This winter after the car sat for a few weeks it wouldn’t start. Rather than spend 30 min messing with it and being late for work I simply hopped in an Uber. When this vehicle does meet its eventual demise I will likely advocate for becoming a single car household.
The biggest hurdle ridesharing has in replacing vehicle ownership though is the one off scenarios where having a vehicle is just so valuable in terms of time and cost. We’re in the middle of remodeling our bathroom. We did plenty of planning and sorted out all of the materials and tools we would need and made a giant list. I went to Home Depot and bought just about everything in one trip and loaded it in a truck and drove it home.
As the project has progressed though, there are constantly times where I find I need a tool, or need a different fitting for the plumbing, etc. I just hop in the car and head over to Home Depot quick and grab it. Uber would cost me about $15 round trip for each one of those visits. I haven’t gathered the receipts yet to track how many visits I’ve made but I imagine it would add up pretty considerably. This is just one example. As an expecting father I can only imagine how much of a nightmare loading a car seat in an Uber would be.
I love having the option of a ride share, and I think its fantastic for the opportunity it provides those who many not have access to a car for various reasons. However, I’m not sure ridesharing will ever reach the point of being able to completely replace car ownership for the average American household. I’m confident we’ll hang on to at least one vehicle for the forseable future.
Why wait? :) I did this a while ago (2car -> 1car, with a child), and have zero regrets. We now have two kids, and are still 1-car'ing it, with the occasional rideshare. It's fantastic not having to deal with the crap a less-used car comes with.
I wrote up my analysis, with a spreadsheet you can plug your own numbers into: https://da-data.blogspot.com/2015/06/why-my-car-cost-more-th...
We chose not to go zero car for many of the reasons you mention (and, in fact, ended up replacing our 2007 ford focus this year). But going from two to one is very freeing.
Loading a car seat into a rideshare isn't bad, btw - the LATCH anchors make it almost routine once you're used to it. Our travel carseat is a little more twitchy, but none of it is very bad.
This is exactly the question and situation I am in as our 2004 Jeep probably won't pass inspection come this December and we are thinking about which car to buy and if we should buy another car.
Speaking as an automotive mechanic, Uber/Lyft/taxi are functionally indistinguishable from a fleet vehicle after the first year of service with the notable exception that fleet vehicles enjoy cheaper parts and service.
Expect to see your brake/oil/air filter life cut in half. most of this is due to idling in a fleet-like manner a vehicle with no accomodation for greater-than-average idle times. Example: the crown victoria and F150 fleets sold to government agencies can easily sustain a 3-6 hour idle as theyre equipped with an enlarged intercooler so you dont cook the oil.
Suspension suffers but not appreciably as power steering fluid, which turns to laffy taffy pretty reliably in these types of vehicles. Tire life in some cases is notably shorter due to the prevalence of sidewall damage from mediocre drivers dragging or hopping curbs. Fleet vehicles are equipped with idler/pitman assemblies which, again, are cheaper to repair and service than the more complex and expensive rack-and-pinion...which also isnt as durable for fleetlike operations.
service times are also longer...so theres lost revenue. example: an AC service on a Lexus takes damned near 4 hours (I'd want the car for the day.) Service on a lincoln towncar? I might not even have to put the keys in the ignition. Theres actually a factory tool you can order from Mexico that will do it in about 11 minutes.
TL;DR: if you're driving for one of these taxi services, buy a fleet vehicle used or new.
I was not aware there were a subset of consumer vehicles that were considered 'fleet vehicles.' A quick google search doesn't show me: beyond crown vics and f150 (all of them?) how do I find the full list of fleet vehicles?
> Using uberPOOL, instead of uberX, I’ve saved on 301 rides * ($14.45 average UberX ride – $10.66 average pool ride) = $1140 savings. In exchange, I’ve sat longer in rides. That’s 301 rides * 8 minutes extra minutes per ride on average = 40 more hours in pool rides. $1140 savings over 40 hours is equivalent to Uber paying me $28.50 / hour to ride uberPOOL.
Since he’s paying Uber with after-tax non-deductible dollars, it’s actually more like earning ($28.50 / .6) = $47.50 per hour.
True. Same holds for buying car, with post-tax dollars.
Interested to see how he'd fare under carsharing as opposed to ridesharing. It seems UberPool is about $30 an hour per hour, UberX $54. But car2go for example is around $20-25 depending on the car and city. (not available in SF) And that doesn't require you to share a car with other people (which is fine as a taxi service, but perhaps too intimate for many as a daily routine).
That having been said, in terms of 'car hacking' he should be able to do much better if he just bought a cheaper but reliable car. He never owned the car for status purposes, his previous choice of car seems like a bad benchmark to compare Uber to. 8k depreciation is just crazy, might as well just lease at that point or buy a small, cheap japanese car, like a Honda Civic or something. Maintenance is a few hundred bucks, you can buy em for two years worth of his BMW depreciation, pretty fuel efficient. I think ridesharing is great, but you shouldn't compare it to a newly bought $80k BMW benchmark imo.
In 2010 I bought a Nissan Versa for around $10k (lightly used). It still runs like a champ, the door handle has been replaced, a few belts, tires, oil, etc. However, all the repairs in 8 years is less than $5k.
That's around $700 a year, and the damn thing has 165,000 miles. Still starts, drives, no rust. Should easily be able to pull 200,000 miles off of it (or another 2 years). I think the car today is still worth a ~$1k - $2k.
But to compare it to car and ride sharing you need to add insurance, fuel and parking cost.
Also, 165 k miles and you never had to change the timing belt, break pads etc? Does the 5 k$ include all those costs?
Yes, $5k covers this costs. A timing belt or break pads are $100 - $200 for the whole thing. Insurance isn't included sure, nor is gas.
According to my mint, on average I spend $500 / year on insurance (two cars) and gas is $1000 / year. I also get things like freedom to drive cross country (which I've done) or go to national parks. Which adds value.
Take all that and its still what:
$8k + $4k + $10k + $5k = $27k
For 8 years... And I gurantee I travel more than 686 rides, as I drive pretty much 365 days a year. Plus it has some value.
In many cases, as with most things, convenience comes at a premium. That's what ride sharing is. I use it too when traveling, but the car is way cheaper long term.
Is Uber's plan more like keep making loss and keep pushing the world to a state of rent a car for each ride and then get to a state of not own any car and then ones we get to a state of no one owns a car and every one takes a Uber then just keep jacking up the price at will and make more money out of us, and at that point we wont have a car and instead of buying one we will better say pay 5$ extra and take Uber and eventually reach a state where we spend twice the amount or owning a car per month on Uber and some smart guy figures out this and then we all go back to owning a car using Uber rarely at times of need.
Y go the long route we can simply stay in the current or previous state and use it like a taxi rarely wen needed.
I think the endgame is self driving vehicles which would hopefully bring the price down.
I wonder how much his rides would have cost if Uber didn't classify him as a 'frequent rider':
https://therideshareguy.com/uber-is-ripping-off-frequent-rid...
> car ownership cost $11,783 per year, most of it depreciation
Does depreciation even matter. Most people don’t sell their cars.
Here, let me rephrase: the expensive part about car ownership is purchasing cars, not gas, insurance, or maintenance.
But $11,783 per year? My new little Hyundai hatchback cost me $12,000 in 2010 and is now around 7.5 years old. So even if it was completely worthless by now (which it isn't) the depreciation couldn't have been more than $1600 per year.
Maybe people should buy cheaper cars.
I was thinking about this the other day, and it's really all about status. You don't buy a BMW because you think "this is a great deal and a great piece of engineering, what a great and practical use of my money!". You do it because you want people to know you have a BMW. Which I guess is great if you associate with the kinds of people that care about wasting money on perceived social status, but absolutely doesn't make sense if you care about making a smart financial decision.
It's not all just status. There are people that appreciate the handling and the performance they get driving a BMW. I bought a second hand BMW because I wanted a car that I'd enjoy driving, didn't care about the social status at all.
> There are people that appreciate the handling and the performance they get driving a BMW.
My brother was a panel beater and most of his friends mechanics, when growing up I was always told the worst car you could buy was a BMW, they were for people who like to think they have money, but more often than not those people are paying off the car, but it costs more to maintain the car than it does to buy it.
Personally if I had the money for a BMW, there's plenty of other cars that are nicer, better performing, and better handling, than a BMW. But I would rather just buy a Toyota and drive it till i died. Those things are cheap and last forever.
Agreed, but now that the problem has been identified, why do so many people continue to finance or lease new cars?
Car maintenance isn't that scary if you have a steady income and buy something rational (90s japanese instead of 2000s range rover)
I’ve noticed that many of my friends simply accept that leasing for $200-400/mo in perpetuity is simply easier than dealing with a car that begins to become unreliable. Humans are weird in that spending $1,500 on car repairs one time in 24 months just seems way more jarring than spending $300/mo but spending $0 on repairs.
They’re paying extra to not have their routine interrupted; depending on what else is going on in their life, it may be the right decision. Money is a tool to do things you want, not a scorecard.
People are risk averse; predictable expenses are easier to plan around than unpredictable ones. What if you're unlucky and it breaks twice in a year? Or the first repair is bungled and you have to go to a different shop, and argue the first one into giving you your money back?
For many, the larger sum is very painful.
Because eventually, you could just lease a new car and not worry about maintenance or warranty or your own safety anymore. My mum has a 2005 car which she continues running due to the reasoning of "why change the car if this one works" - and that's correct, but I added up all the repairs we did to it in 2017 and the parts + labour totaled about ~$6000 in that one year, and it looks like 2018 will at least match that. ~$6000/year gives you $500/month that could go towards a lease on a brand new car and then you don't have to worry about anything, instead of pumping money into a car that will eventually break down in such a way that fixing it will cost more than it's worth.
$12k over 2 years for maintenance seems extremely excessive. That can replace the whole engine in a small car. It could also mean the car never had any proper maintenance done (like oil changes), and now serious engine parts are having to be repaired.
I have a '05 Tundra and just had to replace the entire ABS system, so while it was being worked on also did all of the belts, water pump, etc... and came in ~4k. There shouldn't be any maintenance except oil and maybe tires for the next 2-4 years.
It's a Land Rover Discovery 3 - we had to have the whole undercarriage redone because it was getting some serious rust, so it had to be sand blasted and re-done from scratch, that alone was about $4000. Then we spent $1000 on a set of new summer tyres(winters will come next this year I suspect), and the A/C compressor seized up completely - that was about $1000 for the part + labour. This year we had to do the suspension maintenance, replace the brushings etc, that came to about $1500. Then the rear locking differential broke, it was about $2000 for a new one + labour. And just last week the car went into limp mode, the suspension lowered, the transmission wouldn't really shift - had to get the car towed to a LR garage. Turned out to be some tiny sensor, but diagnostics, plus part plus labour plus towing came to about $500. Then you have the annual maintenance, but that's not a lot compared to the rest. The car has about 200k miles on it and actually the engine runs absolutely fine, no issues there.
Yes, I guess it's a very complicated car with loads of electronics that can go wrong, and when they do go wrong it's expensive. But it's not a far fetched idea that my mum would be better off with getting a brand new car which doesn't suffer from random issues where you have to get the car towed to the garage.
Ouch. Those old Land Rovers are known to have issues, but people love them. $12k over 2 years is still cheaper than buying a new one for $50k+. Obviously it's a different conversation if your mom is willing to step down to a small Japanese hatchback or something cost efficient. Otherwise, it is like a guy I know complaining about paying $600 to replace the headlight assembly in his Porsche. Well yeah, it's a Porche.
Those old land rovers rust like crazy for people who go to the beach and never wash their car after, the salt water (even when you drive near the beach and not on) causes major rust.
Car maintenance requires the most expensive thing of all, time. Plus tools, plus experience. Once you take apart something on your car, if you can't get it back together, you're out of luck.
You also have to be physically strong and able to get to lug nuts and other rusted connections loose. I highly doubt most women can take tires off and lift them and put them back on, especially for SUV.
I think oil and air filter changes can be done by most though, especially if they get a fumoto valve. I would hesitate to recommend brake jobs for most people though.
" I highly doubt most women can take tires off and lift them and put them back on, especially for SUV."
This is either sexist, ignorant, or both. I put myself through school working as a mechanic, and very few jobs require more strength than the average 10 year old girl has. That is the entire point of tools, they provide adequate leverage.
Additionally, it seems sexist to single out women, what about older men? I've certainly met plenty of women physically stronger than me, and most healthy adults should be able to lift even a heavy 60lb tire the few inches necessary to mount it. Unless you are installing a transmission, if you are putting in significant physical effort then you are using the wrong tool or technique. For instance, for the other commenters that mentioned difficult lug nuts- Go to harbor freight and purchase a 1/2" breaker bar, at least 18" long but preferably 24", along with a socket to fit your lug nuts. To crack the lug nuts, use your body weight and bounce on one foot. Even if the shop that installed them didn't over-torque the nuts, road grit and salt can make them very tight. Carry that tool instead of the provided wrench, it is far easier and safer, and shouldn't cost more than 25$.
By writing women, I am alluding to the fact that many of almost 50% of the population might not have the muscle mass and/or biological build to swap out tires. It's not sexist, it's just shorthand for writing all those words. It doesn't make sense to specify older men (or women) as I would think they are generally precluded from conversations about activities requiring physical strength, so it would be superfluous.
Some women are stronger than others, some aren't. But in my experience, women will probably have problems getting a lug nut off that has been tightened too tight with an air tool and/or is rusted. I personally have had problems getting them off, even with a breaker bar, and I wouldn't expect everyone with a car to go out and buy a breaker bar either.
The meat of my comment was that it might be reasonable to expect a large portion of the population to not be able to do what many think are simple routine car repairs, such as brake jobs, and I attempted to prove it by illustrating an example.
Taking my car in for maintenance requires time as well. For most things I'm time ahead doing my own work. I get parts while doing a different errand, so it is comparing time of driving to the mechanic, waiting for the shuttle, the drive to work, and then the reverse on the way home.
Of course I already have nearly all the tools (except every car needs some special tool, so add $15 one time).
I highly doubt most men can take tires off and lift them and put them back on, too.
I thought that was Bloke 101. Actually, the hardest part is getting the lugnuts off. When your tyres were fitted, they likely used air tools to put the nuts back on. I’ve found you always need to ensure you can remove them with the spare hand tool later - otherwise you may end up with a flat somewhere and be unable to remove the wheel.
Air tools should only be used for removal. Using an impact wrench for putting on nuts causes cross threaded and broken studs.
Some shops do it, but you shouldn't go to them.
Yep, I've sheared some tools trying to get them off. Being able to rent a car with air tools would be nice for DIY stuff. It would probably be too expensive insurance wise though.
This is where you put a length of pipe in the car. Much easier, even for women and girls.
All it takes is a couple feet to move the torque required into the lower end of human capability.
If a normal human cannot loosen the lug nuts with the provided wrench, they are on too tight and doing damage.
Agreed, in that the fasteners get stretched, fatigued, difficult to manipulate.
But it still happens. Having a means of greater torque gets past that failure condition and reduces the work burden.
And that's a net good. Older people, young, small, women with nails, guys who may not be very strong, someone hurt or sick all see a much improved task, well in bounds for them.
This is precisely why I brought all my kids up knowing these things. Same for anyone I've helped. I'll leave it with them and just go get another lever. cheap.
Better to be equipped to get this done than be stuck, merely understanding one should not be, but is anyway.
A small extension of this thinking means equipping the vehicle with common sense, useful tools. BMW does this from the factory. Most go unused, but its ultra cheap insurance. May actually end up applying to another vehicle. All good.
It really doesn't take much to equip a vehicle for trouble cases. Anyone who does is likely to get a nice return on that modest investment in skill and gear at some point in their lives. This is true even when their skills are somehow lacking, or they become physically unable somehow.
Getting help means people, and it often means tools. Having both is again, cheap insurance.
Talking about a damaged fastener on your way from the trouble incident is a great problem to have when compared to the side of a road.
No, it is bad because your brake calipers/drums get warped from too much torque.
The fastener problem is real too, but not nearly the potential safety hazard as the damage to the brakes.
Sure, it's bad. But the driver does not know that, may never know that, unless they actually do work on their fasteners. They are not likely to do that work, until they must, and that's on the side of the road.
And, given they must do that work, having the means to complete it makes all the sense in the world.
Nobody has to tighten anything that way. I've never shown, nor recommended people do. It's all about having the means to change a tire, should that need arise. And that means removing the fasteners.
So, I'll tell you what. I'll continue carrying a lever, and will continue to not be stuck somewhere ugly, and you do whatever you want.
Everyone can and should express concern when the job is done poorly.
Nobody should be stuck because it was done poorly, unless they want to be, and I for sure don't. Nor does anyone I know.
I agree that you should have the lever just in case. However if you ever need to use it you should fire the last shop that worked on your tires.
Damn right, unless one lacks strength.
I'm getting older. Can do it. Just don't want to. May not be able one day. There is that too.
Well, maybe not in a timely fashion, and maybe not at all if the shop who put them on really turned the bolts. But in general, I think it's more about leverage than raw strength. Also, a tire isn't that heavy unless we are talking about a non-standard vehicle. And, as a bonus, you actually don't need to lift them all that much... they roll.
Are you kidding?
Serious question. When I raised my kids, boys and girls, all of them changed tires, among other basic car things. And yes, doing an SUV was part of that.
There is skill needed to avoid the most painful lift, but it's not hard to obtain.
I'm 50. Would not think twice about a tire change on any vehicle I drive.
Are we just not teaching people these things anymore?
I've experienced it. A tire on an SUV is like 50lbs. If they've been tightened by a shop with air tools, it can be hard to get the lug nuts off, especially with the tools that come with the car. I've sheared off a bit at the end of a breaker bar because the lugs were so tight.
A car's tire, I can agree that if the lugs are not improperly tightened too much, anyone should be able to do it. But for a full SUV, a 17"+ tire is a bit much to ask a petite woman to handle in my opinion.
That's way too tight! Fortunately, I've not sheared anything.
And it's not an ask on my part. I have shown how it can be done, and whether she does it isn't material. Worst case, she can instruct someone who has strength.
I think that's a bit uncharitable. There's a far more rational reason which is that many people don't have all the money to pay upfront and finance makes it manageable and predictable.
In terms of lease options, if all the maintenance / repairs are covered then, again, it kinda makes sense, right? You're effectively paying a bit more each month, but you know what you're in for and there's no chance of a massive unknown catastrophic failure breaking the bank.
It's all well and good saying that car maintenance isn't scary, but as the owner of car that's started smoking — it's not much fun taking it to 5 mechanics, all of whom haven't managed to diagnose the issue.
It's the same reason people have insurance.
Leasing is a very specific financial instrument, like balloon financing (which I think Mercedes is the only manufacturer that still offers), which is pretty overused. The "I don't want to worry about maintenance!" type of person would typically save money buying the same car on a 4 year loan and trading up every 4 or 5 years compared to leasing for whatever the optimal term is (typically 30-39 months, usually 36).
You're not necessarily overpaying on leasing. It's just a math problem where a few of the variables (base MF, residual) are static, a few are easily negotiated (cap cost), and a few are less easily negotiated (dealer MF mark up).
Is it really considered rational in 2018 to buy a car that's already 18 to 28 years old?
Not even remotely, but there is an /r/personalfinance type of mindset floating around that if you're doing anything other than paying $2,000 for a 2+ decade old Corolla or Civic, you're an idiot.
Depending on how much you can live without it, I suppose, but old quality cars actually hold up really well.
I bought a 1996 Mercedes-Benz E-class last year, it was 21 years old then. It cost me about 2300€ (with a set of winter tires), I did about 15k kilometers in it so far. Pretty much the only servicing I do on it is the non-critical stuff: sunroof, parking sensors etc, but aside of the „vanity stuff” it pretty much runs flawlessly for me. May just be survivor bias of course, but in any case if you don't need 100% reliability 24/7 (in which case you can always take an uber :)) I think it's a really viable choice. Plus buying a used car is afaik more environment friendly than buying a brand new Tesla or Prius or whatever.
They can hold up really well. However you’ll find that generally the economy of a newer car is staggeringly better.
Oh, absolutely; I can definitely feel the impact of the 12-15 l/100km ;) But since it's Poland, like seemingly half of the cars here this one too was converted into an LPG+Gas hybrid, halving the fuel costs.
> why do so many people continue to finance or lease new cars?
Because I can finance it at an interest rate of something like 2.6%. That's stupid cheap.
> why do so many people continue to finance
When the money is nearly free (one of my cars still has a loan at 1.9%), cash is more valuable to me.
Because they don't consider the total costs and $300 a month is "affordable" or whatever.
I know people that lease just because they want a new car every three years and can afford the $3600/yr for that.
That depends. 14 years ago I bought a brand new car. Even though I get 45mpg (real, EPA says I should get 41 highway), I've still spent more on fuel over the last 250,000 miles than everything else combined.
Buy used, problem solved.
Bought a £8k 6 year old car, sold it for £2.5k after it broke and wanted £2k for repairs 6 years later. So £1k/year. Current car costs £0 in tax, £0.02 p/mile, £360 insurance per year
My mum bought a car in 1992 for ~$16,000 NZD. Still driving it today. It’s a Toyota so maintainence is tiny. My dad still drives my 1998 Mitsubishi.
So when I see the price including depreciation it seems odd that people change cars so often they worry about resale value.
I would either buy new and drive it into the ground or buy second hand.
This. Recently bought a car that was about 1 year old, low mileage, and half the cost of new. Why bother buying a new car?
Both cars I owned were used, but if I had excess money I would probably go for a new car because of how shit the 2nd hand market can be. You never really know what you buy unless you pay a 3rdparty expert to verify that the thing you're buying isn't critically flawed in a non-obvious way.
Both mine were bought from dealers used, so less risk, they both had 1 year warranty I think
In the US the average length of car ownership for new cars is 6.5 years [1], so it does matter what your car is worth after this time. Not sure if it amounts to ca. 6,000 USD per year, tho. That's a lot of depreciation.
[1]: https://www.statista.com/statistics/581017/average-length-of...
Oh wow. Ok. I would drive a car till it died. Wouldn’t buy a new one every few years.
The type of person who buys a brand new car probably likes a brand new car (new features, status, reliability, etc) and that doesn't change after a handful of years. Or the other way around, the type of person who wants to maintain an older vehicle is probably not the type of person who will buy a brand new car.
Obviously there are exceptions, but the used car market is much larger than the new car market so most are selling.
Not taking deprecation in account when buying a car makes the calculation way off. It even applies when you own it the whole way from the factory to the junkyard.
A rule of thumb that I use is that the value of the car halves every fourth year. So if I buy a car for $20 000 I can count on a monthly cost of $208 for the deprecation the first four years, that exceeds all other costs of ownership in my case.
Regardless of age and mileage there's a floor value for a vehicle based on vehicle type, options and condition. In states with annual safety inspection anything in passable condition gets an artificial price bump of about a grand compared to the same vehicle with a cracked tail light, 1/32 less tread or a missing sun visor.
I think he may be talking 'accounting' depreciation, which is what accountants would use when calculating the balance sheet asset entries on company cars etc.
NB: Can't read the site or full article - not sure if it is the 'HN Hug of Death' but it is timing out for me.
> Most people don’t sell their cars.
Trading your car in is indeed selling your car.Well sure, cars break after all, and many people will find they need to replace their car instead of living without one.
If I buy a washing machine for $600, and it breaks after 5 years, I can consider that machine to have cost me $120 a year, even if I never sell it.
One thing I think that is overlooked here is drinking alcohol.
Even if you drive and pay for the car payment and insurance at a very cheap rate of 200/month for both, there's gas and maintenance which should be at least another 50-100 per month.
But if you're a drinker even casually or you go out just on weekends you will have to uber and leave the car and incur uber costs regardless. After work Happy hour? drink or two at the end of office day? Can't drive.
Point is if you are a drinker for whatever reason there's huge perks to uber and not having a car. Also tax wise uber being used as transportation versus a vehicle where commuting is not deductible(starts from place of work not to as contractor). Overall the tax write offs and being able to drink is a huge perk should your lifestyle be similar of course.
This seems to assume that there is not a daily commute. 267 rides for the whole year is low if one were to need to drive to work. The author never seems to mentions what they do on their day to day commute, but I guess if they are a Googler there is probably a free bus?
Yeah, google has a bus system. If he was going to/from work every day w/ uber that would be and additional ~470 rides per year, and for him they would be extremely expensive (SF <-> Mountain View).
Sure, you save a lot of money if you're pitting uber vs $50,000 of currently depreciating BMW that was bought new for $80k. If the author had bought a reasonably priced car (TM) the calculations and conclusions would likely be very different. Hell, his second car is reasonably priced (or reasonably old), but the egregiousness of the first car still invalidates all his conclusions. Had he had a reasonably priced car, there's no way uber would be cheaper.
I can't read the website, hug of death maybe? I would like to point out that in some other countries Uber fare prices are much higher. I live in The Netherlands and I remember 1 km to equal about 2 euro's, whereas in the US it would equal to about $1.25, meaning that Uber is twice as expensive in The Netherlands. I don't know how it is now, but my point is that it is quite country dependent.
But people in the US need to travel further since it's infrastructure is all built around cars. Netherlands isn't as focused on cars, more bikes.
I live in London, UK. I can’t drive. Last time I was behind a wheel it was 1999 and I failed my driving test.
I get the train places and taxis the other end (Uber if the city allows).
I’ll admit a few times a year I think it would be nice to drive and I intend to take my test again one day but It’s down list of stuff do with learn the banjo and work on my Haskell
Cached link (site was down for me) http://webcache.googleusercontent.com/search?q=cache:j_-ohhP...
You can't really compare owning a M3 to riding Uber though. If you are a type of person who cares about how fun your car is, Uber is not an alternative for a M3. If you're the type of person who only cares about going from point A to B, you shouldn't have bought a M3 in the first place.
Am i the only one that finds Uber a lot more expensive then local, traditional taxi rivals?
In the UK just outside London Uber's quotes last Friday and Saturday night were 50%-100% hire then other competitors.
It depends on region, daytime and traffic a lot.
E.g. in my area sometimes it's much cheaper than its competitors (up to 20% difference) and MUCH cheaper than a standard call taxi (up to 50% difference), sometimes it's a double from competitors prices. You just have to catch the right moment. I even have an application for my local region which estimates prices in different services right now and suggests the cheapest option.
Abroad (in countries like India) Uber (or similar services, e.g. Ola) is the easiest way to get an honest price without heavy bargain (which is also time consuming) and complicated explanations where you wanna get.
When I come back to London, Uber seems ridiculously expensive compared to Chicago. Plus the lack of Pool options (even to/from Heathrow, etc) doesn't help.
Had the same thing in Brighton. Uber was quoting £90, taxi stand was £48.
I'm curious as to what this will look like with using e-scooter rentals to replace some of the shorter rides.
Data is as of 2016. Would be curious to see a follow up post on this, especially the comparison with Lyft.
Why would the measure be against owning two cars? What single person with no kids needs two cars?
But you can get hotter girls with M3 :)
the site is down so I don't know how many miles his commute is.
but what if he factored in riding a bicycle when it isn't raining (into work) and using Uber on days when it's raining in the mornings?
He doesn't address mileage at all (shocker). Based on a $1/mile estimate, he traveled about 12k miles over 6 years (500 miles/year).
I made this schedule including cycling and public transport
https://imgur.com/a/aiAdbZE
even a weak rider can save money by getting a week pass when their legs are sore.
I'm assuming there's a week based pass in your area.
How come noone is pointing out that paying 12041 to Uber is paaying 12041 to undermine society by ignoring the rule of law and to roll back protections organizer labor achieved over a hundred years? Shame on you.
Some laws should be ignored; it's how the law system improves. A law that is obeyed by everyone will never be changed, because the opportunity cost is not made visible.
Society would collapse if every company could pick which regulation they want to ignore. That is not how the law evolves. Protests, campaigns etc swings public opinion yes but not this.
Taxi medallions weren't a huge win for organized labor, they were a huge win for organized crime. Taxi drivers have been getting the short of the stick for a long time, it's not like it was a lucrative position before Uber came along.
No, the organized labors wins are undone by creating this "sharing economy" where instead of employment you can be an "independent contractor".
If what Uber is doing is illegal, why are they allowed to continue operating?
Truly an awful line of reasoning. To add a little substance to that comment per HN guidelines: they could be being investigated now, the gov may not have caught up with their illegality yet, etc. etc. etc.
right, and the comment that I was replying to was just assuming that it was illegal even if they haven't been convicted... I know nobody likes Uber here, including me, but it's a bit of a witch hunt
> If what Uber is doing is illegal, why are they allowed to continue operating?
Because the set of things that are wrong is a subset of the things that are illegal.
Uber also has a documented history of doing actual illegal things. It even went so far as to build technology specifically to avoid law enforcement authorities:
https://www.nytimes.com/2017/03/03/technology/uber-greyball-...