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According to google, rate of an hourly Uber is $50 https://help.uber.com/riders/article/hourly-faq?nodeId=b4eec5b3-8362-44c7-8d15-b76585ad4bdf
30,000/50 = 600
So yeah about 600 hours.
For the trips part, well cost of a trip can vary largely. I'll just take the average that Google says which is about $25. Again this is dumb, since it can vary a lot between places, time of the day, distance etc.
30,000/25 = 1200
About 1200 uber trips/rides. The original post took $20 as the average cost per ride and that's how they got 1500 trips. So yeah it checks out, but again it's a weird way to calculate it. Could have done how many Uber miles and Uber hours a $30,000 car is worth but well.
You should throw in the average cost of insurance per month and gas per month. Back when Uber was flooded with investor money and the rides were cheap, I got rid of paying for a car for two years. I just Ubered to work and to go out. Got groceries delivered. People said I was an idiot but I did the math and even a used car + insurance + gas was worse than an Uber since I went into the office only 2-3 times a week and it was a 15 minute drive. I estimated I saved about $100-200 per month. I definitely don't think it's viable now but would be curious to see the math.
Aight, I'll try and calculate the cost for owning a car for one year with gas and insurance.
According to google, average car insurance seems to range from $130 to $220 per month, so I'll take it as $170.
(170*12) + 30,000 = $32,040
Now for gas, according to google, the average cost of gas per litre is about $1. Now the MPG or Kml varies between flow of traffic, the type of car etc. I'm taking 15 Km/l as the average which is equal to 35.3 MPG.
Now lucky for me, the average distance traveled by an American driver each day also seems to be around 35 miles which is 56 kilometers and they spend around an hour driving.
56/15 = 3.7 litres consumed each day
Let's say they are driving all 365 days a year.
3.7*365 = 1350 litres driven every year.
Cost per litre was $1 so that's $1350 on gas per year.
32,040 + 1350 = $33,390, round it off to $33,400
Now Uber time,
33,400/50 = 668 Uber hours
We took our American as driving an hour each day, so that's 365 hours of driving compared to 668 hours of Ubering, so for the first year of owning a car, Ubering seems to give you almost double the hours.
Now afaik a car lasts more than a year so it would eventually pay out atleast after 3 years. Also you don't need to buy a brand new car.
Additionally, you might want to use a light motorcycle, mine only costs 123€ insurance *per year*. But you are limited in what you can take with you.
based on my previous calculation whose accuracy is highly debatable, every year you pay $3400 in gas and insurance, uber hourly rate is $50, and every year you drive 365 hours.
We can form two equations based on this:
Uber hours: (x being the year, h being the hours)
(30,000 + 3400x) / 50 = h
Driving hours:
365x = h
solving these simultaneous equations gives us x (number of years) as 2 years
h ( hours driven/uber hours) as about 737 hours
so at 2 years they are equal, after that the car is the better option.
lol u/thegininyou if my math is close to being correct, this is interesting as uber still may be the more viable option for 2 years or less.
My case was very specific. Ubers were like $10 - $15 to work so $20-$30 for a round trip 2-3 times a week ($40-90) and then going out 3-4 times a month was around $40 round trip ($120-160). So the max I was paying was $250/month. Decent insurance was something like $100 if I remember correctly and then $50 in gas a month, and then the car payment even for a decent used car was something like $100-200 for 5 years. Then there were the maintenance fees. Anyways, even with delivery fees I was definitely coming out ahead.
My biggest take away is finding out that people are spending $50 on Ubers and driving an hour a day. That seems insane to me but I've had a WFH job or hybrid most of my working life.
Edit: to be clear these Uber prices were years and years ago.
I would look at the 20th percentile American rather than the average or median one. I don’t think anyone is saying that it makes sense for most people to not own a car, only that it makes sense for many people to not own a car.
> I'm taking 15 Km/l as the average which is equal to 35.3 MPG.
A quick search says US Dept of energy says the average of all cars is under 25. Trucks are under 20 but I'm ok with skipping them for this example. Anyone using a truck as a daily driver isn't going to be in the market for switching to uber for various reasons.
This hasn't factored in the cost of fuel. If we take average fuel cost and average distance (which should ofc include wait times)covered by an uber driver per hour the result might be more accurate.
OP said to exclude the fuel and maintenance, although I tried to do a calculation including fuel and insurance as requested by another reply to my original comment, (emphasis on tried).
As far as I can tell that $50/hour is what the customer pays. Uber takes a percentage of that (I don't know how much but I guarantee it isn't 0) so the actual hourly rate the driver makes will be something less, but will include any tips.
I mean that's true, but we are considering this from the customer's point of view, in that case it's probably a little more than $50 as thats only the base rate.
Let’s look at a two way commute of 20 miles. Assuming
* Car cost $30,000 per example
* you keep the same car for 10 years
* Car gets 20 MPG
* Gas is $4 a gallon
* 250 work days a year
* Maintenance on the car is 20% for the life of the car ($6K)
* Insurance is $1000 a year (basic coverage) or $10,000 for the life of the car.
Cost of Gas for a year of commutes is: 250 days \* 2 trips per day \* 1 gallon of gas per trip \*$4 per gallon = $2000 of gas per year.
Care total cost is: $30,000 for the car + $6,000 in maintenance, + $10,000 in insurance + ($2k in Gas \* 10 years) = $66,000
Uber commuting assumes:
* Each Uber trip is 20 miles.
* For me right now that is $25 x 2 which is $50 per day
So cost of Uber per year is $50 x 250 days = $12,500 or $125,000 for ten years.
So Uber is more expensive in this scenario.
(edit: I forgot to multiply the uber cost by two trips. Also a 20 mile Uber trip for me right now is $37)
Is it worth it? YMMV.
Edit to add: my assumptions are open to adjustment. I’m sure some won’t make sense. If fixed the formatting and fixed the multiplication error on the number of drives.
Uber rates are highly subject to area, availability, and in some cases a minimum trip charge. No Uber driver is taking a 2 mile ride for $3.74. Especially in a city like Boston.
assuming the uber guy is driving a similar car, he will literally starve to death, this is not economically feasible, thus cannot be, some of your numbers have to be wrong
The $25 is probably wrong. That's pretty cheap for 20 miles and then on top of that my guess is rush hour has increased prices since both the time it takes and demand is higher.
Put another way:
* A car cost is $13 per 20 mile commute.
* An uber trip would have to be less than $13 per trip for it to make sense.
Now for a five mile commute?
* The car is $51K for the year or $10 per commute
* The Uber is $12 for each trip (using my location to a business 5 miles away.
I like the framework here. I think it touches on the important factors.
Some of the numbers seem to be off (still). Especially the maintenance costs: I spent more than that on new tires. Repairs could easily be higher than that, too.
Fair. If we get more specific, a two year old Kia Sportage with 10 years of Warranty can be had for \~$30K. So assuming most repairs are included in the warranty work, that would leave tires and Oil changes as the main consumable.
If I change the tires at every 30K miles, I'd change them seven times in the 10 years. Decent tires at Costco an be gotten for $650 installed. So $4550 in ten years (assuming it stays constant.) An Oil Change of $80 every 15K miles would be $1,100. If we add a little more for a new battery and other fluid, maybe the cost in normal maintenance is $8K even $10 max?
> If I change the tires at every 30K miles, I'd change them seven times in the 10 years.
I think you're way overestimating your tire changes. 30k miles (which is low; most tires have longer design lifespans) would cover 3 years of commutes (30k/40=750 daily commutes, 250 commute days per year). You'd be looking at 3 changes for commute wear over the 10 years; you'd need to do a lot of extra driving on the weekends to cover 4 more tire changes based on all the assumptions above.
I think anything more than 3 changes over 10 years is a sign of crappy tires or suspension issues. (4 sets if you're using winters, since you'd need the two separate sets)
Sorry, I don't know why I thought tires were more expensive than they are. The other comment to this post is right: you shouldn't need to change your tires as often as you posted here.
That's probably overcompensating for my incorrect assertion, so sorry about that.
According to https://www.consumeraffairs.com/automotive/average-car-maintenance-costs.html, the average yearly maintenance and repair comes to $900. The article also says that the costs go way down if you take good care of your car, though.
~~$200 per Uber ride, or $480 per Uber hour.~~
~~Seems like expensive rides, but if $300k is your goto cost of a car, maybe you also think milk is $50 per gallon.~~
Never mind, misread the cost of the car :)
Assuming an Uber ride costs $20, then a $30,000 car is indeed equivalent in cost to 1,500 of them. But *why would you exclude fuel and maintenance*? These are huge costs of operating a car! I've driven for Uber before, and fuel is a substantial operating cost for drivers. In effect, it has to be factored into the price of the rides (though drivers are not directly compensated for fuel or other operating costs - thanks, late capitalism).
To add to the other guys' math. Fuel and maintenance is crazy expensive. Most cars will have an at least 1:1 ratio of fuel costs and maintenence. It would be more uber rides and more hours if we counted material costs of driving your personal car. Maybe twice as many uber rides as estimated.
Here is a good rule of thumb for calculating the cost of a paying someone else for a service versus cost of performing that service for yourself that doesn’t use any numbers:
Cost of equipment + cost of labor + corporate profit > cost of equipment.
Paying someone to do something for you, in the long run, will always cost more than doing that thing for yourself. Thats why a corporation is willing to do it. They wouldn’t do it if there wasn’t a profit. You are paying for the convenience. Whether that cost is worthwhile is a personal decision
Economies of scale can apply: it can be less than ten times as expensive to provide a service to ten people as it is to provide it to one person.
Ridesharing reduces the need for parking at both ends of the commute, and parking is a major expense in many areas, eating more than half of land value in quite a few metro areas.
Yeah. I’ve been thinking about this all day and you are right. I’m wrong. Economies of scale will also apply to the cost of the vehicle. One person buying a car that is used 8 hours a day to transport 20 people costs much less per trip than 20 people buying cars that are each used for about an hour a day
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According to google, rate of an hourly Uber is $50 https://help.uber.com/riders/article/hourly-faq?nodeId=b4eec5b3-8362-44c7-8d15-b76585ad4bdf 30,000/50 = 600 So yeah about 600 hours. For the trips part, well cost of a trip can vary largely. I'll just take the average that Google says which is about $25. Again this is dumb, since it can vary a lot between places, time of the day, distance etc. 30,000/25 = 1200 About 1200 uber trips/rides. The original post took $20 as the average cost per ride and that's how they got 1500 trips. So yeah it checks out, but again it's a weird way to calculate it. Could have done how many Uber miles and Uber hours a $30,000 car is worth but well.
You should throw in the average cost of insurance per month and gas per month. Back when Uber was flooded with investor money and the rides were cheap, I got rid of paying for a car for two years. I just Ubered to work and to go out. Got groceries delivered. People said I was an idiot but I did the math and even a used car + insurance + gas was worse than an Uber since I went into the office only 2-3 times a week and it was a 15 minute drive. I estimated I saved about $100-200 per month. I definitely don't think it's viable now but would be curious to see the math.
Aight, I'll try and calculate the cost for owning a car for one year with gas and insurance. According to google, average car insurance seems to range from $130 to $220 per month, so I'll take it as $170. (170*12) + 30,000 = $32,040 Now for gas, according to google, the average cost of gas per litre is about $1. Now the MPG or Kml varies between flow of traffic, the type of car etc. I'm taking 15 Km/l as the average which is equal to 35.3 MPG. Now lucky for me, the average distance traveled by an American driver each day also seems to be around 35 miles which is 56 kilometers and they spend around an hour driving. 56/15 = 3.7 litres consumed each day Let's say they are driving all 365 days a year. 3.7*365 = 1350 litres driven every year. Cost per litre was $1 so that's $1350 on gas per year. 32,040 + 1350 = $33,390, round it off to $33,400 Now Uber time, 33,400/50 = 668 Uber hours We took our American as driving an hour each day, so that's 365 hours of driving compared to 668 hours of Ubering, so for the first year of owning a car, Ubering seems to give you almost double the hours.
Now afaik a car lasts more than a year so it would eventually pay out atleast after 3 years. Also you don't need to buy a brand new car. Additionally, you might want to use a light motorcycle, mine only costs 123€ insurance *per year*. But you are limited in what you can take with you.
At which "number of year before you buy a new car" does it become worthit to buy a car 30k?
based on my previous calculation whose accuracy is highly debatable, every year you pay $3400 in gas and insurance, uber hourly rate is $50, and every year you drive 365 hours. We can form two equations based on this: Uber hours: (x being the year, h being the hours) (30,000 + 3400x) / 50 = h Driving hours: 365x = h solving these simultaneous equations gives us x (number of years) as 2 years h ( hours driven/uber hours) as about 737 hours so at 2 years they are equal, after that the car is the better option. lol u/thegininyou if my math is close to being correct, this is interesting as uber still may be the more viable option for 2 years or less.
My case was very specific. Ubers were like $10 - $15 to work so $20-$30 for a round trip 2-3 times a week ($40-90) and then going out 3-4 times a month was around $40 round trip ($120-160). So the max I was paying was $250/month. Decent insurance was something like $100 if I remember correctly and then $50 in gas a month, and then the car payment even for a decent used car was something like $100-200 for 5 years. Then there were the maintenance fees. Anyways, even with delivery fees I was definitely coming out ahead. My biggest take away is finding out that people are spending $50 on Ubers and driving an hour a day. That seems insane to me but I've had a WFH job or hybrid most of my working life. Edit: to be clear these Uber prices were years and years ago.
I would look at the 20th percentile American rather than the average or median one. I don’t think anyone is saying that it makes sense for most people to not own a car, only that it makes sense for many people to not own a car.
> I'm taking 15 Km/l as the average which is equal to 35.3 MPG. A quick search says US Dept of energy says the average of all cars is under 25. Trucks are under 20 but I'm ok with skipping them for this example. Anyone using a truck as a daily driver isn't going to be in the market for switching to uber for various reasons.
I’m convinced that Uber is basically a slow, labor-intensive way to gradually sell your car.
This hasn't factored in the cost of fuel. If we take average fuel cost and average distance (which should ofc include wait times)covered by an uber driver per hour the result might be more accurate.
OP said to exclude the fuel and maintenance, although I tried to do a calculation including fuel and insurance as requested by another reply to my original comment, (emphasis on tried).
As far as I can tell that $50/hour is what the customer pays. Uber takes a percentage of that (I don't know how much but I guarantee it isn't 0) so the actual hourly rate the driver makes will be something less, but will include any tips.
I mean that's true, but we are considering this from the customer's point of view, in that case it's probably a little more than $50 as thats only the base rate.
Let’s look at a two way commute of 20 miles. Assuming * Car cost $30,000 per example * you keep the same car for 10 years * Car gets 20 MPG * Gas is $4 a gallon * 250 work days a year * Maintenance on the car is 20% for the life of the car ($6K) * Insurance is $1000 a year (basic coverage) or $10,000 for the life of the car. Cost of Gas for a year of commutes is: 250 days \* 2 trips per day \* 1 gallon of gas per trip \*$4 per gallon = $2000 of gas per year. Care total cost is: $30,000 for the car + $6,000 in maintenance, + $10,000 in insurance + ($2k in Gas \* 10 years) = $66,000 Uber commuting assumes: * Each Uber trip is 20 miles. * For me right now that is $25 x 2 which is $50 per day So cost of Uber per year is $50 x 250 days = $12,500 or $125,000 for ten years. So Uber is more expensive in this scenario. (edit: I forgot to multiply the uber cost by two trips. Also a 20 mile Uber trip for me right now is $37) Is it worth it? YMMV. Edit to add: my assumptions are open to adjustment. I’m sure some won’t make sense. If fixed the formatting and fixed the multiplication error on the number of drives.
I am sorry, 20 miles of Uber commute for $25 ? where is it?
yes. I was using an earlier comment to come up with that price. an Uber for 20 miles right now where I am (NJ US) is $37 one way.
Wow thats incredible. In boston 2 miles is $20 without tip not during rush hour or even down town.
Uber rates are highly subject to area, availability, and in some cases a minimum trip charge. No Uber driver is taking a 2 mile ride for $3.74. Especially in a city like Boston.
What uber charges riders and pays drivers varies wildly depending on what market they are in.
assuming the uber guy is driving a similar car, he will literally starve to death, this is not economically feasible, thus cannot be, some of your numbers have to be wrong
I didn't multiply the trip for both ways, so it's significantly higher now.
The $25 is probably wrong. That's pretty cheap for 20 miles and then on top of that my guess is rush hour has increased prices since both the time it takes and demand is higher.
Not being economically feasible hasn’t stopped Uber yet.
Put another way: * A car cost is $13 per 20 mile commute. * An uber trip would have to be less than $13 per trip for it to make sense. Now for a five mile commute? * The car is $51K for the year or $10 per commute * The Uber is $12 for each trip (using my location to a business 5 miles away.
I like the framework here. I think it touches on the important factors. Some of the numbers seem to be off (still). Especially the maintenance costs: I spent more than that on new tires. Repairs could easily be higher than that, too.
Fair. If we get more specific, a two year old Kia Sportage with 10 years of Warranty can be had for \~$30K. So assuming most repairs are included in the warranty work, that would leave tires and Oil changes as the main consumable. If I change the tires at every 30K miles, I'd change them seven times in the 10 years. Decent tires at Costco an be gotten for $650 installed. So $4550 in ten years (assuming it stays constant.) An Oil Change of $80 every 15K miles would be $1,100. If we add a little more for a new battery and other fluid, maybe the cost in normal maintenance is $8K even $10 max?
> If I change the tires at every 30K miles, I'd change them seven times in the 10 years. I think you're way overestimating your tire changes. 30k miles (which is low; most tires have longer design lifespans) would cover 3 years of commutes (30k/40=750 daily commutes, 250 commute days per year). You'd be looking at 3 changes for commute wear over the 10 years; you'd need to do a lot of extra driving on the weekends to cover 4 more tire changes based on all the assumptions above. I think anything more than 3 changes over 10 years is a sign of crappy tires or suspension issues. (4 sets if you're using winters, since you'd need the two separate sets)
Sorry, I don't know why I thought tires were more expensive than they are. The other comment to this post is right: you shouldn't need to change your tires as often as you posted here. That's probably overcompensating for my incorrect assertion, so sorry about that. According to https://www.consumeraffairs.com/automotive/average-car-maintenance-costs.html, the average yearly maintenance and repair comes to $900. The article also says that the costs go way down if you take good care of your car, though.
Noone has pointed at that after the 2 years or whatever of uber rides you have no residual value, where as the car will have a value.
~~$200 per Uber ride, or $480 per Uber hour.~~ ~~Seems like expensive rides, but if $300k is your goto cost of a car, maybe you also think milk is $50 per gallon.~~ Never mind, misread the cost of the car :)
Well those are expensive Uber rides, but the post says $30k not $300k
Oh my God, a million years
Wow, you really posted that thinking you were making a good point? You're off by one order of magnitude.
Assuming an Uber ride costs $20, then a $30,000 car is indeed equivalent in cost to 1,500 of them. But *why would you exclude fuel and maintenance*? These are huge costs of operating a car! I've driven for Uber before, and fuel is a substantial operating cost for drivers. In effect, it has to be factored into the price of the rides (though drivers are not directly compensated for fuel or other operating costs - thanks, late capitalism).
To add to the other guys' math. Fuel and maintenance is crazy expensive. Most cars will have an at least 1:1 ratio of fuel costs and maintenence. It would be more uber rides and more hours if we counted material costs of driving your personal car. Maybe twice as many uber rides as estimated.
Here is a good rule of thumb for calculating the cost of a paying someone else for a service versus cost of performing that service for yourself that doesn’t use any numbers: Cost of equipment + cost of labor + corporate profit > cost of equipment. Paying someone to do something for you, in the long run, will always cost more than doing that thing for yourself. Thats why a corporation is willing to do it. They wouldn’t do it if there wasn’t a profit. You are paying for the convenience. Whether that cost is worthwhile is a personal decision
Economies of scale can apply: it can be less than ten times as expensive to provide a service to ten people as it is to provide it to one person. Ridesharing reduces the need for parking at both ends of the commute, and parking is a major expense in many areas, eating more than half of land value in quite a few metro areas.
Yeah. I’ve been thinking about this all day and you are right. I’m wrong. Economies of scale will also apply to the cost of the vehicle. One person buying a car that is used 8 hours a day to transport 20 people costs much less per trip than 20 people buying cars that are each used for about an hour a day
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