7 ms·

$0.50 of vehicle costs per mile does not compute. If you're spending $30 a day on gas and driving 250 miles, you can just rent a car for the week at a daily rat

$0.50 of vehicle costs per mile does not compute. If you're spending $30 a day on gas and driving 250 miles, you can just rent a car for the week at a daily rate of $30 or less, and come out with $60/day in costs rather than his stated $125, which makes the whole thing quite a bit more profitable. Probably profitable enough that my poor as shit unskilled and unemployed college self would have been better off doing that than tutoring during the summers. Am I missing something?

tspike 9y ago
Commercial use is almost certainly prohibited in your rental car contract. Also, Uber requires a vehicle inspection before driving.
baddox 9y ago
It’s probably against the terms of the rental agreement to do any commercial driving.
astura 9y ago
~$.50 a mile isn't a made up number, it's what the federal government has calculated as the cost of driving for business purposes. Actual value is 53.5 cents a mile. https://www.irs.gov/newsroom/2017-standard-mileage-rates-for-business-and-medical-and-moving-announced https://www.irs.gov/newsroom/2017-standard-mileage-rates-for... Students are usually under 25 thus largely are unallowed to rent cars. I doubt using a rental car for this type of business is allowed under the terms of a rental contract or under Uber's rules. Insurance isn't free.
- ewjordan 9y ago
  Ah, fair enough - I was just wondering because I've known Uber drivers that do exactly this, and have given me advice on where to find cheaper rental cars.
  - dsp1234 9y ago
    All consumer rental car contracts in the US include a provision that disallows the usage of the vehicle for commercial purposes. Additionally, most personal vehicle insurance prohibits the use of the insurance for commercial ride sharing activities without a special waiver. So as soon as that first fare is picked up (if not sooner), then the renter is in breach of contract. Any insurance from the rental agency is now void, and without special personal insurance waivers, the driver is now driving uninsured. That is both illegal, and all liability will now be 100% on the driver. So if someone is going to do that, then they need to calculate in the risk of an accident/arrest and all of the full liability that goes with that.
    - astura 9y ago
      Uber insures drivers in the US while they are giving a ride. However, it probably wouldn't cover you if you're breaking your rental contract at the time of loss or wasn't the car Uber approved. https://www.uber.com/drive/insurance/ https://www.uber.com/drive/insurance/
    - closeparen 9y ago
      There are specific programs to do this above-board: https://www.hertz.com/rentacar/misc/index.jsp?targetPage=uber_landing_page.jsp&LinkType=HZLK https://www.hertz.com/rentacar/misc/index.jsp?targetPage=ube...
- baddox 9y ago
  I don’t think it’s necessarily appropriate to use that figure to calculate your actual costs as an Uber driver, especially if you’re not driving full-time. It seems like the 53 cent figure is amortizing the entire cost of the vehicle, fuel, and maintenance over its entire lifetime. If you’re in college and just drive for Uber on occasional weekends, it doesn’t make sense to include all of the fixed costs of the vehicle in your profit calculations. Note that the IRS figure for variable costs per mile is 17 cents.
  - astura 9y ago
    I don't necessarily disagree with you but I certainly couldn't afford an "Uber eligible" car when I was in college. Are college students overspending on cars just to drive for Uber?
    - ams6110 9y ago
      Is it feasible to pass their inspection in a borrowed car and actually drive something else?
      - URSpider94 9y ago
        No. Your license plate and vehicle description are shown to each passenger. If they don’t match, you’re going to get reported pretty quickly. Also, if your car is dumpy, people will report you.
      - astura 9y ago
        That would be a terrible idea. It obviously violates Uber's driver's agreement so you risk getting kicked off the platform or at the very least confusing your passengers who are looking for a red ford focus and you're driving a white Chevy Cavalier. Not only that but if you get into an accident with a rider you're going to be in a world of hurt. Uber's insurance company would certainly deny the claim and so would yours, assuming your insurance policy covered ride sharing in the first place.
        9y ago
- tekromancr 9y ago
  There are companies that explicitly rent cars to rideshare drivers. The rates are around 300-500 per week. I did some contract work for one of them.
- holtbp 9y ago
  I doubt using a rental car for this type of business is allowed under the terms of a rental contract or under Uber's rules. Looks like GM is definitely in on this with Lyft: https://blog.lyft.com/posts/expressdrive https://blog.lyft.com/posts/expressdrive Also, apparently Hertz: https://thehub.lyft.com/express-drive-hertz-update/ https://thehub.lyft.com/express-drive-hertz-update/ Program: https://www.lyft.com/expressdrive https://www.lyft.com/expressdrive This is all I could find on cost for Lyft: https://help.lyft.com/hc/en-us/articles/218196557-Express-Drive-Rental-Car-Program-#pricing%20and%20costs https://help.lyft.com/hc/en-us/articles/218196557-Express-Dr... For Uber, they also partner with Hertz: https://www.hertz.com/rentacar/misc/index.jsp?targetPage=UberFAQs.jsp https://www.hertz.com/rentacar/misc/index.jsp?targetPage=Ube...
- patio11 9y ago
  Keep in mind that the IRS has a number of incentives in calculating that number, and "accurately reflect the cost of driving" is not the dominant one. Like every other safe harbor in the tax code, the primary purpose is "reduce the cost and uncertainty of tax administration." The IRS has to review 1~2% of all firms in the economy every year; if they pick a number too small, many of those firms will have hundreds of extra line-item entries in their books to satisfy the Actual Cost method. The IRS truly does not want to overly burden taxpayers. They also don't want to burden their examiners over what, for the overwhelming majority of small businesses, is a trivial amount of money -- the net difference in taxes between Maximally Accurate Car Costs and the 53.5 cents/mi approximation is likely on the order of a few hundred dollars, and that is below the care floor for business returns.
  - revelation 9y ago
    So how did they arrive at 53.5 from 54 if it is one way or another for them? You are talking about $/mile. Moving that figure up or down a penny quickly approaches a billion on the macro scale and their overarching incentive is keeping it down. I mean, I will take this figure any day over someone higher up the thread essentially arguing it's much less because all Uber drivers have cars anyway that they finance through (?) so accounting it towards the Uber income doesn't make sense (??).
    - patio11 9y ago
      This is a subtle and difficult thing, but I promise you it is true: the IRS is not primarily scored on revenue generation. Their incentives are (approximately) hire more IRSians, minimize complaints to Congress regarding the tax code, minimize complaints to Congress regarding the IRS specifically, efficiently administer taxes, and generate revenue, in order. There are a lot of changes that are within the IRS' authority to make which would be net-positive from a tax collection perspective and which it would not do and, if it did, would be undone from above. One is "radically increase the number of audits administered."
austenallred 9y ago
The $.50 per mile is egregiously high, and he doesn’t mention where it comes from. If you make it $.25 or $.30/mile the numbers work out much better. Still not super high pay, but livable. Not to mention the fact that he’s measuring the most efficient part of a job that an Uber driver could calculate - a suburb in the middle of the day.
- astura 9y ago
  https://www.irs.gov/newsroom/2017-standard-mileage-rates-for-business-and-medical-and-moving-announced https://www.irs.gov/newsroom/2017-standard-mileage-rates-for...
- ghaff 9y ago
  There are both fixed and variable costs (in addition to fuel costs) in operating a car. I expect the IRS number surprises a lot of people but I doubt the IRS is in the business of passing out free money to people who drive a lot for business at tax time. People can reduce their own average cost with inexpensive, low MPG, older vehicles although this is somewhat limited by Uber rules/preferences. Cars cost more to operate per mile than a lot of people think they do. I expect if there were a meter in personal cars, people would drive a lot less.
ghaff 9y ago
To start with, you're going to be violating your rental car contract. Also, irrelevant at that point, but you're probably not going to be able to get a rental car for $30--after all taxes etc.--if you don't carry your own insurance and there are going to be various costs if you do get into an accident.
deleted 9y ago
[deleted]
VLM 9y ago
Enterprise only gives you 100 miles per day, which is very generous in an urban area but if you're visiting out west where the "local" airport is 40 miles away from town... To make the numbers easy to do in your head, a thirty K car sounds average-ish and lasts 150 K miles, thats a fifth of a buck per mile depreciation for that miracle car that never needs oil changes or any other form of maintenance. When I was younger I had a sportier car that used ultra high performance tires that cost me a kilobuck per set and only lasted something like 20K miles, which is a nickel per mile just for tires. Of course most cars tires last longer but prices only increase with inflation such that some SUV and truck drivers are likely paying more than five cents per mile just for tires. dollars per gallon divided by miles per gallon gives you dollars per mile, so 2.5 or so divided by 25 or so (to make the math easy to do in head) implies at least 10 cents per mile just in gas costs. Of course many people spend a lot of the life of their car paying more than $2.50/gal for gas and 25 MPG is a daydream for most cars and most drivers on most roads. My car insurance is very interested in miles driven per year and if I drove my band limit (which I don't) I'd be paying about ten cents per mile for insurance. I'm thinking 20 cents for car depreciation, 5 cents for tires, 10 cents for gas, 10 cents for insurance, another 5 cents for misc maintenance costs, the IRS 50 cent estimate isn't bad.
- nkurz 9y ago
  I'm thinking 20 cents for car depreciation, 5 cents for tires, 10 cents for gas, 10 cents for insurance, another 5 cents for misc maintenance costs, the IRS 50 cent estimate isn't bad. These numbers are very difficult to align with the prices advertised by the rental companies for Uber and Lyft drivers, which are usually claimed to be about $200 per week: https://www.nerdwallet.com/blog/loans/5-ways-car-uber-lyft/ https://www.nerdwallet.com/blog/loans/5-ways-car-uber-lyft/ For example, Hertz's site says they charge a base of $214 a week for Uber drivers, including unlimited mileage and insurance, but not including taxes, fees or fuel: https://www.hertz.com/rentacar/misc/index.jsp?targetPage=UberFAQs.jsp https://www.hertz.com/rentacar/misc/index.jsp?targetPage=Ube... While it's possible that the rental companies are losing money on these rentals or that the undisclosed fees are much more than the rental cost, I think the more likely explanation is that your estimate is inaccurate. Do you have another explanation for the discrepancy?
wils1245 9y ago
I had a driver once who was using a rental car under an agreement tailored to ride sharing. I can’t recall the company he used, though.

tspike 9y ago

Commercial use is almost certainly prohibited in your rental car contract. Also, Uber requires a vehicle inspection before driving.

baddox 9y ago

It’s probably against the terms of the rental agreement to do any commercial driving.

astura 9y ago

~$.50 a mile isn't a made up number, it's what the federal government has calculated as the cost of driving for business purposes. Actual value is 53.5 cents a mile. https://www.irs.gov/newsroom/2017-standard-mileage-rates-for-business-and-medical-and-moving-announced https://www.irs.gov/newsroom/2017-standard-mileage-rates-for... Students are usually under 25 thus largely are unallowed to rent cars. I doubt using a rental car for this type of business is allowed under the terms of a rental contract or under Uber's rules. Insurance isn't free.

ewjordan 9y ago
Ah, fair enough - I was just wondering because I've known Uber drivers that do exactly this, and have given me advice on where to find cheaper rental cars.
- dsp1234 9y ago
  All consumer rental car contracts in the US include a provision that disallows the usage of the vehicle for commercial purposes. Additionally, most personal vehicle insurance prohibits the use of the insurance for commercial ride sharing activities without a special waiver. So as soon as that first fare is picked up (if not sooner), then the renter is in breach of contract. Any insurance from the rental agency is now void, and without special personal insurance waivers, the driver is now driving uninsured. That is both illegal, and all liability will now be 100% on the driver. So if someone is going to do that, then they need to calculate in the risk of an accident/arrest and all of the full liability that goes with that.
  - astura 9y ago
    Uber insures drivers in the US while they are giving a ride. However, it probably wouldn't cover you if you're breaking your rental contract at the time of loss or wasn't the car Uber approved. https://www.uber.com/drive/insurance/ https://www.uber.com/drive/insurance/
  - closeparen 9y ago
    There are specific programs to do this above-board: https://www.hertz.com/rentacar/misc/index.jsp?targetPage=uber_landing_page.jsp&LinkType=HZLK https://www.hertz.com/rentacar/misc/index.jsp?targetPage=ube...
baddox 9y ago
I don’t think it’s necessarily appropriate to use that figure to calculate your actual costs as an Uber driver, especially if you’re not driving full-time. It seems like the 53 cent figure is amortizing the entire cost of the vehicle, fuel, and maintenance over its entire lifetime. If you’re in college and just drive for Uber on occasional weekends, it doesn’t make sense to include all of the fixed costs of the vehicle in your profit calculations. Note that the IRS figure for variable costs per mile is 17 cents.
- astura 9y ago
  I don't necessarily disagree with you but I certainly couldn't afford an "Uber eligible" car when I was in college. Are college students overspending on cars just to drive for Uber?
  - ams6110 9y ago
    Is it feasible to pass their inspection in a borrowed car and actually drive something else?
    - URSpider94 9y ago
      No. Your license plate and vehicle description are shown to each passenger. If they don’t match, you’re going to get reported pretty quickly. Also, if your car is dumpy, people will report you.
    - astura 9y ago
      That would be a terrible idea. It obviously violates Uber's driver's agreement so you risk getting kicked off the platform or at the very least confusing your passengers who are looking for a red ford focus and you're driving a white Chevy Cavalier. Not only that but if you get into an accident with a rider you're going to be in a world of hurt. Uber's insurance company would certainly deny the claim and so would yours, assuming your insurance policy covered ride sharing in the first place.
      - 9y ago
tekromancr 9y ago
There are companies that explicitly rent cars to rideshare drivers. The rates are around 300-500 per week. I did some contract work for one of them.
holtbp 9y ago
I doubt using a rental car for this type of business is allowed under the terms of a rental contract or under Uber's rules. Looks like GM is definitely in on this with Lyft: https://blog.lyft.com/posts/expressdrive https://blog.lyft.com/posts/expressdrive Also, apparently Hertz: https://thehub.lyft.com/express-drive-hertz-update/ https://thehub.lyft.com/express-drive-hertz-update/ Program: https://www.lyft.com/expressdrive https://www.lyft.com/expressdrive This is all I could find on cost for Lyft: https://help.lyft.com/hc/en-us/articles/218196557-Express-Drive-Rental-Car-Program-#pricing%20and%20costs https://help.lyft.com/hc/en-us/articles/218196557-Express-Dr... For Uber, they also partner with Hertz: https://www.hertz.com/rentacar/misc/index.jsp?targetPage=UberFAQs.jsp https://www.hertz.com/rentacar/misc/index.jsp?targetPage=Ube...
patio11 9y ago
Keep in mind that the IRS has a number of incentives in calculating that number, and "accurately reflect the cost of driving" is not the dominant one. Like every other safe harbor in the tax code, the primary purpose is "reduce the cost and uncertainty of tax administration." The IRS has to review 1~2% of all firms in the economy every year; if they pick a number too small, many of those firms will have hundreds of extra line-item entries in their books to satisfy the Actual Cost method. The IRS truly does not want to overly burden taxpayers. They also don't want to burden their examiners over what, for the overwhelming majority of small businesses, is a trivial amount of money -- the net difference in taxes between Maximally Accurate Car Costs and the 53.5 cents/mi approximation is likely on the order of a few hundred dollars, and that is below the care floor for business returns.
- revelation 9y ago
  So how did they arrive at 53.5 from 54 if it is one way or another for them? You are talking about $/mile. Moving that figure up or down a penny quickly approaches a billion on the macro scale and their overarching incentive is keeping it down. I mean, I will take this figure any day over someone higher up the thread essentially arguing it's much less because all Uber drivers have cars anyway that they finance through (?) so accounting it towards the Uber income doesn't make sense (??).
  - patio11 9y ago
    This is a subtle and difficult thing, but I promise you it is true: the IRS is not primarily scored on revenue generation. Their incentives are (approximately) hire more IRSians, minimize complaints to Congress regarding the tax code, minimize complaints to Congress regarding the IRS specifically, efficiently administer taxes, and generate revenue, in order. There are a lot of changes that are within the IRS' authority to make which would be net-positive from a tax collection perspective and which it would not do and, if it did, would be undone from above. One is "radically increase the number of audits administered."

austenallred 9y ago

The $.50 per mile is egregiously high, and he doesn’t mention where it comes from. If you make it $.25 or $.30/mile the numbers work out much better. Still not super high pay, but livable. Not to mention the fact that he’s measuring the most efficient part of a job that an Uber driver could calculate - a suburb in the middle of the day.

astura 9y ago
https://www.irs.gov/newsroom/2017-standard-mileage-rates-for-business-and-medical-and-moving-announced https://www.irs.gov/newsroom/2017-standard-mileage-rates-for...
ghaff 9y ago
There are both fixed and variable costs (in addition to fuel costs) in operating a car. I expect the IRS number surprises a lot of people but I doubt the IRS is in the business of passing out free money to people who drive a lot for business at tax time. People can reduce their own average cost with inexpensive, low MPG, older vehicles although this is somewhat limited by Uber rules/preferences. Cars cost more to operate per mile than a lot of people think they do. I expect if there were a meter in personal cars, people would drive a lot less.

ghaff 9y ago

To start with, you're going to be violating your rental car contract. Also, irrelevant at that point, but you're probably not going to be able to get a rental car for $30--after all taxes etc.--if you don't carry your own insurance and there are going to be various costs if you do get into an accident.

deleted 9y ago

[deleted]

VLM 9y ago

Enterprise only gives you 100 miles per day, which is very generous in an urban area but if you're visiting out west where the "local" airport is 40 miles away from town... To make the numbers easy to do in your head, a thirty K car sounds average-ish and lasts 150 K miles, thats a fifth of a buck per mile depreciation for that miracle car that never needs oil changes or any other form of maintenance. When I was younger I had a sportier car that used ultra high performance tires that cost me a kilobuck per set and only lasted something like 20K miles, which is a nickel per mile just for tires. Of course most cars tires last longer but prices only increase with inflation such that some SUV and truck drivers are likely paying more than five cents per mile just for tires. dollars per gallon divided by miles per gallon gives you dollars per mile, so 2.5 or so divided by 25 or so (to make the math easy to do in head) implies at least 10 cents per mile just in gas costs. Of course many people spend a lot of the life of their car paying more than $2.50/gal for gas and 25 MPG is a daydream for most cars and most drivers on most roads. My car insurance is very interested in miles driven per year and if I drove my band limit (which I don't) I'd be paying about ten cents per mile for insurance. I'm thinking 20 cents for car depreciation, 5 cents for tires, 10 cents for gas, 10 cents for insurance, another 5 cents for misc maintenance costs, the IRS 50 cent estimate isn't bad.

nkurz 9y ago
I'm thinking 20 cents for car depreciation, 5 cents for tires, 10 cents for gas, 10 cents for insurance, another 5 cents for misc maintenance costs, the IRS 50 cent estimate isn't bad. These numbers are very difficult to align with the prices advertised by the rental companies for Uber and Lyft drivers, which are usually claimed to be about $200 per week: https://www.nerdwallet.com/blog/loans/5-ways-car-uber-lyft/ https://www.nerdwallet.com/blog/loans/5-ways-car-uber-lyft/ For example, Hertz's site says they charge a base of $214 a week for Uber drivers, including unlimited mileage and insurance, but not including taxes, fees or fuel: https://www.hertz.com/rentacar/misc/index.jsp?targetPage=UberFAQs.jsp https://www.hertz.com/rentacar/misc/index.jsp?targetPage=Ube... While it's possible that the rental companies are losing money on these rentals or that the undisclosed fees are much more than the rental cost, I think the more likely explanation is that your estimate is inaccurate. Do you have another explanation for the discrepancy?

wils1245 9y ago

I had a driver once who was using a rental car under an agreement tailored to ride sharing. I can’t recall the company he used, though.