The maths is pretty complicated, but it turns out that if you drive less than 9,481 miles per year, it’s cheaper to take UberX everywhere you go than it is to own a mid-sized car.
There are two catches:
- You have to use UberX instead of regular Uber. No town cars for you.
- You have to use half your time in the back of the car doing work.
Kyle Hill, the founder of a startup called HomeHero, did the complicated maths.
Citing, AAA, he says the average cost of driving a mid-sized car 13,476 miles per year is $US8,876.
(13,476 miles is how many miles the average American drives per year.)
The costs break down like this:
- Payments / depreciation ($4,260)
- Fuel costs ($2,130)
- Interest ($976)
- Insurance ($887)
- Maintenance and repairs ($355)
- Registration and taxes ($355)
Throw in traffic tickets, parking, and — this one is a bit of a stretch — the productivity you lose driving in the front seat instead of emailing or making phone calls in the back, and Hill estimates the cost rises to $US12,744 per year.
Meanwhile, Hill estimates riding an Uber 15,000 miles per year would rack up $US427 in base fare fees, $US14,823 in mileage fees, and $US2,863 in time fees. All told the cost would be $US18,115 per year.
That’s more than $US12,744, obviously.
So, if you’re driving 15,000 miles per year, it’s still cheaper to own a car than to take Uber everywhere.
But what if you don’t drive that much?
It turns out that as your yearly mileage shrinks, the cost of using Uber goes down quicker than the cost of car-ownership. Car ownership entails more fixed costs like parking, car payments, registration, and taxes.
Assuming a daily commute of 25 miles that lasts 25 minutes, the cross-over point is 9,481 miles.
At that point, says Hill, the cost of ownership and the cost of riding UberX everywhere is the same: roughly $US12,000.
Drive one fewer mile per year, and suddenly Uber is cheaper than owning.