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Your typical rideshare car isn't nearly that old, though, and isn't going to make it to nearly a million miles either. You've cherrypicked every single variabl

Your typical rideshare car isn't nearly that old, though, and isn't going to make it to nearly a million miles either. You've cherrypicked every single variable to favor your case, and you did the calculation wrong besides (you need to use the starting value of the car, not the ending value). Do it again for a newer more valuable car, and a lot fewer miles put on it. You can easily see depreciation amounts in the thousands of dollars per year.

AnthonyMouse 7y ago
> Your typical rideshare car isn't nearly that old, though Now, or when they stop using it? The average car in the US is 11.8 years old. > and isn't going to make it to nearly a million miles either This is a completely plausible number of miles for a vehicle driven full time over the course of several years. > and you did the calculation wrong besides (you need to use the starting value of the car, not the ending value). No, you use the difference in value between the car with fewer miles vs. more miles at the point where it is replaced, i.e. the amount you lost at resale by having more miles on it. The difference in value between the starting value and the ending value independent of miles is the loss due to age/time, which is a sunk cost since the car ages whether you drive it or not. > Do it again for a newer more valuable car, and a lot fewer miles put on it. You can easily see depreciation amounts in the thousands of dollars per year. Because then you're measuring the depreciation due to time (the sunk cost portion) rather than the depreciation due to additional miles, and the depreciation due to time is much higher during the first years of the vehicle's life. It is also naturally much less efficient to do that in general. How many taxi companies are you familiar with that buy new vehicles, drive them for 10,000 miles/year for two years and then sell them? You can make anything cost a lot if you're willing to waste money.
- CydeWeys 7y ago
  You're not understanding that many people are buying nice NEW cars for the purpose of driving them for rideshare, because of the requirements of the platforms, and that these new cars are then depreciating heavily (up to tens of thousands of dollars' worth in a few years) because of the absurd number of miles being put on them that absolutely trashes their resale value. The typical rideshare car here in NYC is purpose-specific (needs different plates), has an average new cost of at least $30k, and is pretty new. It's absolutely correct to count the full cost of the depreciation of this vehicle as a rideshare expense. And the average stats for cars in general in the US are irrelevant; what matters is what's being used for rideshare. You can't use old clunkers for that.
  - AnthonyMouse 7y ago
    > You're not understanding that many people are buying nice NEW cars for the purpose of driving them for rideshare You don't buy a new car unless you have money to burn. Even if you need a "new" car, you buy a three or four year old car, which is still plenty new but lets the other guy take the lion's share of the depreciation. Half the difference is from having less time on the factory warranty which you would exceed on miles before that anyway. Even with "newer" cars it's still not huge. A 2016 Camry with 60,000 miles is worth about $5000 more than a 2016 Camry with 500,000 miles, which is ~$.01/mile. But you don't sell a four year old car, you buy a four year old car. > The typical rideshare car here in NYC is purpose-specific (needs different plates) Who is to blame when cities pass rules that increase costs on drivers? > It's absolutely correct to count the full cost of the depreciation of this vehicle as a rideshare expense. It is absolutely incorrect when the owner is also using the vehicle as a personal vehicle, which they would need anyway, which makes the age-related component of the depreciation a sunk cost. > And the average stats for cars in general in the US are irrelevant; what matters is what's being used for rideshare. You can't use old clunkers for that. Which is why you stop using them for that when they're ten years old and not twenty or thirty. Notice also that this doesn't mean you're driving a ten year old car most of the time, it means you're driving a five or six year old car most of the time because when it's ten years old is when you stop driving it.
    - CydeWeys 7y ago
      This is a ought/are problem. You're saying what rideshare drivers ought to be doing, and then in that most optimistic case doing your calculations based on that, but you instead need to taking a descriptivist look at the situation and doing the analysis on what people are actually doing, not what you think they should be doing. And, yes, lots of rideshare drivers are buying/leasing new vehicles to use for the platform, and they are suffering a lot from depreciation on it.
      - bhupy 7y ago
        If drivers are doing something that they shouldn't be, and there's a fairly straightforward way for them to avoid negative consequences, then this is a matter that is out of scope of public policy. Removing the negative consequences from making unwise financial decisions 1) is a moral hazard, and 2) punishes those that are using their resources more wisely.

AnthonyMouse 7y ago

> Your typical rideshare car isn't nearly that old, though Now, or when they stop using it? The average car in the US is 11.8 years old. > and isn't going to make it to nearly a million miles either This is a completely plausible number of miles for a vehicle driven full time over the course of several years. > and you did the calculation wrong besides (you need to use the starting value of the car, not the ending value). No, you use the difference in value between the car with fewer miles vs. more miles at the point where it is replaced, i.e. the amount you lost at resale by having more miles on it. The difference in value between the starting value and the ending value independent of miles is the loss due to age/time, which is a sunk cost since the car ages whether you drive it or not. > Do it again for a newer more valuable car, and a lot fewer miles put on it. You can easily see depreciation amounts in the thousands of dollars per year. Because then you're measuring the depreciation due to time (the sunk cost portion) rather than the depreciation due to additional miles, and the depreciation due to time is much higher during the first years of the vehicle's life. It is also naturally much less efficient to do that in general. How many taxi companies are you familiar with that buy new vehicles, drive them for 10,000 miles/year for two years and then sell them? You can make anything cost a lot if you're willing to waste money.

CydeWeys 7y ago
You're not understanding that many people are buying nice NEW cars for the purpose of driving them for rideshare, because of the requirements of the platforms, and that these new cars are then depreciating heavily (up to tens of thousands of dollars' worth in a few years) because of the absurd number of miles being put on them that absolutely trashes their resale value. The typical rideshare car here in NYC is purpose-specific (needs different plates), has an average new cost of at least $30k, and is pretty new. It's absolutely correct to count the full cost of the depreciation of this vehicle as a rideshare expense. And the average stats for cars in general in the US are irrelevant; what matters is what's being used for rideshare. You can't use old clunkers for that.
- AnthonyMouse 7y ago
  > You're not understanding that many people are buying nice NEW cars for the purpose of driving them for rideshare You don't buy a new car unless you have money to burn. Even if you need a "new" car, you buy a three or four year old car, which is still plenty new but lets the other guy take the lion's share of the depreciation. Half the difference is from having less time on the factory warranty which you would exceed on miles before that anyway. Even with "newer" cars it's still not huge. A 2016 Camry with 60,000 miles is worth about $5000 more than a 2016 Camry with 500,000 miles, which is ~$.01/mile. But you don't sell a four year old car, you buy a four year old car. > The typical rideshare car here in NYC is purpose-specific (needs different plates) Who is to blame when cities pass rules that increase costs on drivers? > It's absolutely correct to count the full cost of the depreciation of this vehicle as a rideshare expense. It is absolutely incorrect when the owner is also using the vehicle as a personal vehicle, which they would need anyway, which makes the age-related component of the depreciation a sunk cost. > And the average stats for cars in general in the US are irrelevant; what matters is what's being used for rideshare. You can't use old clunkers for that. Which is why you stop using them for that when they're ten years old and not twenty or thirty. Notice also that this doesn't mean you're driving a ten year old car most of the time, it means you're driving a five or six year old car most of the time because when it's ten years old is when you stop driving it.
  - CydeWeys 7y ago
    This is a ought/are problem. You're saying what rideshare drivers ought to be doing, and then in that most optimistic case doing your calculations based on that, but you instead need to taking a descriptivist look at the situation and doing the analysis on what people are actually doing, not what you think they should be doing. And, yes, lots of rideshare drivers are buying/leasing new vehicles to use for the platform, and they are suffering a lot from depreciation on it.
    - bhupy 7y ago
      If drivers are doing something that they shouldn't be, and there's a fairly straightforward way for them to avoid negative consequences, then this is a matter that is out of scope of public policy. Removing the negative consequences from making unwise financial decisions 1) is a moral hazard, and 2) punishes those that are using their resources more wisely.