3 ms·

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

by 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?

ams6110 9y ago
Hertz buys cars for less than you can because they buy thousands per year. Hertz also maintains cars for less because they employ their mechanics and probably pay wholesale for common parts, while you pay $40/hr or more for labor and double retail for parts when you take you car to a shop for service.
deleted 9y ago
[deleted]
SilasX 9y ago
>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: That $200/week turned out to be severely undercharging. According to this article [1], it allowed the driver to put a lot of miles on the car without paying its full depreciation: >>"The Xchange Leasing division had been estimating modest losses of around $500 per auto on average, these people said. But managers recently informed Uber executives that the losses were actually about $9,000 per car — about half the sticker price of a typical leased vehicle." >>The "unlimited miles" allowed drivers to work long days and return vehicles with way too many miles, which kills the resale value. So, Uber is shutting it down. Side note: a lot of people were getting this wrong and screaming bloody murder about how exploitative the leases were. The problem was, they were comparing it to the really-long-term lease you might get as a substitute for buying a car, in which you're still responsible for maintenance, not the kind of lease that covers high usage and major maintenance over unlimited miles. [1] https://wolfstreet.com/2017/08/09/uber-gets-run-over-by-its-own-subprime-auto-leases/ https://wolfstreet.com/2017/08/09/uber-gets-run-over-by-its-...
- deleted 9y ago
  [deleted]
- ec109685 9y ago
  The $200 Uber was charging would have been fine over the lifetime of the lease. The problem was that people were turning their car in way early and cars depreciate a lot faster early in their life than later.
  - SilasX 9y ago
    Still, that would mean Uber wasn’t pricing that turn-in option highly enough.
    - ec109685 9y ago
      Yeah, exactly. Hertz doesn’t have that problem given they can give you a week of a car that isn’t brand new.

by nkurz 9y ago

ams6110 9y ago

Hertz buys cars for less than you can because they buy thousands per year. Hertz also maintains cars for less because they employ their mechanics and probably pay wholesale for common parts, while you pay $40/hr or more for labor and double retail for parts when you take you car to a shop for service.

deleted 9y ago

[deleted]

SilasX 9y ago

>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: That $200/week turned out to be severely undercharging. According to this article [1], it allowed the driver to put a lot of miles on the car without paying its full depreciation: >>"The Xchange Leasing division had been estimating modest losses of around $500 per auto on average, these people said. But managers recently informed Uber executives that the losses were actually about $9,000 per car — about half the sticker price of a typical leased vehicle." >>The "unlimited miles" allowed drivers to work long days and return vehicles with way too many miles, which kills the resale value. So, Uber is shutting it down. Side note: a lot of people were getting this wrong and screaming bloody murder about how exploitative the leases were. The problem was, they were comparing it to the really-long-term lease you might get as a substitute for buying a car, in which you're still responsible for maintenance, not the kind of lease that covers high usage and major maintenance over unlimited miles. [1] https://wolfstreet.com/2017/08/09/uber-gets-run-over-by-its-own-subprime-auto-leases/ https://wolfstreet.com/2017/08/09/uber-gets-run-over-by-its-...

deleted 9y ago
[deleted]
ec109685 9y ago
The $200 Uber was charging would have been fine over the lifetime of the lease. The problem was that people were turning their car in way early and cars depreciate a lot faster early in their life than later.
- SilasX 9y ago
  Still, that would mean Uber wasn’t pricing that turn-in option highly enough.
  - ec109685 9y ago
    Yeah, exactly. Hertz doesn’t have that problem given they can give you a week of a car that isn’t brand new.