4 ms·

in that brochure, average total cost per mile is $0.5646 @15k miles per year. I think you're looking at the operating cost per mile, that doesn't include stuff

• rm999 9y ago
  My point is the fixed costs (the ones you list) don't significantly change if you already have a car and decide to become an Uber driver. Mr Mustache didn't pay 18 dollars to drive those 36 miles, he was already going to pay for his insurance and registration.
  • alexasmyths 9y ago
    Most of the costs are not fixed, i.e. wear and tear, gas etc..
    • x0x0 9y ago
      A car is literally one giant consumable, good for approx 200k miles. Of which perhaps 100-120k are pretty reliable, and after which reliability steadily degrades.
  • slavik81 9y ago
    It's odd that insurance is a fixed cost. The probability of an accident seems like it would increase with more time spent on the road. I assume that either Uber is covering the difference in insurance, or there's a bit of moral hazard at play.
    • ghaff 9y ago
      It depends on the policy. Mine is pretty much a fixed rate. But many policies do have mileage bands.
    • rm999 9y ago
      Both Uber and Lyft cover additional liability insurance as long as the app is open. They also cover comprehensive if a passenger is in the car. https://www.nerdwallet.com/blog/insurance/best-ridesharing-insurance/#2 https://www.nerdwallet.com/blog/insurance/best-ridesharing-i...
    • astura 9y ago
      My insurance company asks me approx how many miles I drive per year and also how far away I live from work (because I list commuting as the purpose of my car). I assume those variables are included in my premium and my (very low) premium would be higher if I drove more or lived far away from from work - my commute is only 4 miles. I also assume the Uber driver would have to tick off "business" as their car's purpose and your insurance may go up just because of that check mark, no matter if the mileage was higher or not.
      • SilasX 9y ago
        Right, insurance does care how much you drive, but there are costs to being fine-grained about how you measure it, so they usually lump in everyone below ~30k miles/year and don't bother to count the differences there. I remember entering 10k vs 15k miles per year and the quote was the same for Geico. Of course, you're absolutely right, and insurers have been slow to account for this parameter; the startup MetroMile exists solely because regular insurers overestimated what a difference the mileage makes. (MetroMile charges by how much you actually drive.)
    • dnautics 9y ago
      To a point. If you are conscientious, then more time on the road makes you a better driver, by knowing your car better and being better able to predict what others will do.
    • IncRnd 9y ago
      Exactly. Insurance rates change with greater mileage and also with using a car for business instead of personal use. If there is an accident, an Uber driver will need to pay out of pocket, unless they lie and tell the insurance company the ride wasn't for Uber.
  • jfoutz 9y ago
    I mean, it's your source. You're free to disagree with it. the cost per mile clearly goes down as milage goes up. as witnessed by the 10/15/20 brackets of driving. but 20 cents a mile isn't even close.
  • cma 9y ago
    Insurance isn't a fixed cost, they want a yearly mileage estimate.
• ghaff 9y ago
  The argument is that those costs don't matter so much if you're going to be owning the car anyway. But cost accounting is complicated. The reality is that, for a car used a minority of the time for taxi service, the number is somewhere in between the IRS cost/mile and the bare minimum fuel + standard maintenance. For one thing, the car will get into higher maintenance costs and will need to be replaced sooner than if you just used it for yourself.
• slavik81 9y ago
  I would expect that an Uber driver would be doing far more than 15k miles per year. That's just normal usage. You're also mixing up your accounting. The parent was discussing marginal costs, and you're discussing average costs. The marginal cost is what's used for making economic decisions, like deciding to drive for Uber or not.
  • grogenaut 9y ago
    My wife does 3-4 days a week for prime now. On track to hitting 12k miles this year. Just as a data point
    • astura 9y ago
      The average driver between 20-50 drives around 15,000 a year. https://www.fhwa.dot.gov/ohim/onh00/bar8.htm https://www.fhwa.dot.gov/ohim/onh00/bar8.htm
      • grogenaut 9y ago
        The average driver implicitly isn't using ride sharing so there's really no relationship between that stat and this discussion other than it'll be closer to your number than to the average daily miles of a glactic starship captain. A better number would be a taxi driver.
  • jfoutz 9y ago
    From op's data, 10,000 - $0.7354 15,000 - $0.5646 20,000 - $0.4944 I just don't see how you get that marginal cost down to $0.20, yes mile n+1 is a little bit cheaper than mile n. and sure, let's pretend that high milage cars used cars sell for the same as low milage cars. so financing is fixed. I just don't see how you can get regular maintenance and gas and insurance down to 20c/mile.
    • rm999 9y ago
      You're looking at average cost, which includes half-ton pickups and large SUVs. Look at page 6, which contains small and medium sedans.