7 ms·

Tangent: $6/hr sounds a bit low; actual costs are probably higher. The IRS standard mileage rate (the amount you can deduct from your taxes for each mile driv

Tangent: $6/hr sounds a bit low; actual costs are probably higher. The IRS standard mileage rate (the amount you can deduct from your taxes for each mile driven) is $0.58/mi (https://www.irs.gov/tax-professionals/standard-mileage-rates https://www.irs.gov/tax-professionals/standard-mileage-rates) $6/hr operating costs means the driver is driving a max of ~10mi/hour, if costs to operate are in line with IRS guidelines.

Hamuko 6y ago
I wouldn't be surprised if drivers are underestimating their costs. The true cost of vehicle ownership is rather murky and I doubt many of these drivers are self-taught accountants.
- jeffbee 6y ago
  That's why the driver attrition rate is so high and Lyft/Uber have to constantly run driver recruitment efforts in mature service areas. After the driver ruins their original car in less than a year, they quickly realize the true operating costs. Say what you will about the taxi business but at least taxi drivers knew that the gate fee on a leased vehicle was $100/day.
bpodgursky 6y ago
The IRS deprecation is very far above the costs in actual practice. It's a very conservative number.
- jluxenberg 6y ago
  I think the IRS number might be spot on. Quick math: ($25,000 cost to buy car new - $4,000 residual value at end-of-life ) / 100,000 miles usable lifetime = $0.21/mi depreciation of value $3.22 / gallon * (1 / (17 mi / gal fuel efficiency)) = $0.19/mi for fuel Maintenance: $40 per oil change / 8,000 miles = $0.01 / mi $600 tire change / 60,000 miles = $0.01 / mi $1,186 average yearly repair / 16,000 average miles driven = $0.07 mile That all adds up to $0.49 / mi and does NOT include insurance and DMV registration fees.
  - xur17 6y ago
    But in most cases, you aren't buying a car just to drive for Uber (more than half drive between 1 and 15 hours a week [0]), you're doing it on the side. Your per mile costs for driving for Uber are the marginal costs (costs of additional insurance, fuel, marginal wear and tear, etc). Also, if you're driving for Uber in a new car that gets 17 mi / gal fuel efficiency, you're not making wise moves. There's a reason a lot of Uber drivers are using 5 year old Prius's - this cuts the fuel cost in half, and the depreciation down quite a bit. [0] https://www.vox.com/2018/10/2/17924628/uber-drivers-make-hourly-expenses https://www.vox.com/2018/10/2/17924628/uber-drivers-make-hou...
    - sudosysgen 6y ago
      Well, no, because if you are an Uber driver the vast majority of the depreciation in the value of your car comes from driving Uber. Cars depreciate in large part due to mileage. Finally, "marginal wear and tear" is a completely absurd concept. The cost of wear and tear on maintenance of a car has a positive derivative and thus has no margin, the more wear and tear the more expensive wear and tear gets. In other words, the limit of the cost of wear and tear as wear goes to infinity is divergent towards positive infinity. Thus, there is no marginal cost.
      - Nydhal 6y ago
        In the real world, you can't spend an infinite amount of money on a car. There is a limit. The margin will come up at some point unless the driver is completely irrational.
        sudosysgen 6y ago
        Sure, but in the real world that cost is having to buy a new car, which easily increases the cost per mile by 50% and invalidates the point that "you were already driving a car".
  - closeparen 6y ago
    It's an exceptionally poor strategy to drop $25k on a new car that only gets 17mpg when your intention is to be a rideshare driver. A purely internal-combustion Civic or Corolla gets twice that. A Prius more than 3x. So do the ones that are 3-4 years old already. And the Prius will probably last closer to 200k miles. I would guess that the ridesharing companies will buy fleets before they'll pay Chevy Tahoe rates for compact sedans.
beached_whale 6y ago
I was talking to a taxi dispatcher at some function here in Canada, and it came up that each vehicle on the road would drive about 500km/day. That's about $200-$250/day in what the per distance rate many employers give out(40¢-50¢/km) for fuel and wear on vehicle. But assuming an 22hrs of driving a day(on a taxi with multiple drivers), that's about 22km each hour or $11/hr for fuel and wear on the vehicle according to what many employers would pay in addition to time driving. This is in Canadian dollars, so $11/hr is about $8/hr in USD and works out to an average of $16USD/hr of driving(assuming (22km|13miles)/hr average)
Skunkleton 6y ago
TCO for a Prius is about 6k a year for non-rideshare applications. The link has this cost around ~13k per year, which isn't outlandish. I think you are right in general though. Uber will let you drive an F-350, but there is no way you will make money with it.
sudosysgen 6y ago
I am almost certain 6$/hr doesn't count depreciation and only part of maintenance. Just fuel costs mean that if you were to drive an average of 20mph, you would pay on average 3$ in gas (in California).

Hamuko 6y ago

I wouldn't be surprised if drivers are underestimating their costs. The true cost of vehicle ownership is rather murky and I doubt many of these drivers are self-taught accountants.

jeffbee 6y ago
That's why the driver attrition rate is so high and Lyft/Uber have to constantly run driver recruitment efforts in mature service areas. After the driver ruins their original car in less than a year, they quickly realize the true operating costs. Say what you will about the taxi business but at least taxi drivers knew that the gate fee on a leased vehicle was $100/day.

bpodgursky 6y ago

The IRS deprecation is very far above the costs in actual practice. It's a very conservative number.

jluxenberg 6y ago
I think the IRS number might be spot on. Quick math: ($25,000 cost to buy car new - $4,000 residual value at end-of-life ) / 100,000 miles usable lifetime = $0.21/mi depreciation of value $3.22 / gallon * (1 / (17 mi / gal fuel efficiency)) = $0.19/mi for fuel Maintenance: $40 per oil change / 8,000 miles = $0.01 / mi $600 tire change / 60,000 miles = $0.01 / mi $1,186 average yearly repair / 16,000 average miles driven = $0.07 mile That all adds up to $0.49 / mi and does NOT include insurance and DMV registration fees.
- xur17 6y ago
  But in most cases, you aren't buying a car just to drive for Uber (more than half drive between 1 and 15 hours a week [0]), you're doing it on the side. Your per mile costs for driving for Uber are the marginal costs (costs of additional insurance, fuel, marginal wear and tear, etc). Also, if you're driving for Uber in a new car that gets 17 mi / gal fuel efficiency, you're not making wise moves. There's a reason a lot of Uber drivers are using 5 year old Prius's - this cuts the fuel cost in half, and the depreciation down quite a bit. [0] https://www.vox.com/2018/10/2/17924628/uber-drivers-make-hourly-expenses https://www.vox.com/2018/10/2/17924628/uber-drivers-make-hou...
  - sudosysgen 6y ago
    Well, no, because if you are an Uber driver the vast majority of the depreciation in the value of your car comes from driving Uber. Cars depreciate in large part due to mileage. Finally, "marginal wear and tear" is a completely absurd concept. The cost of wear and tear on maintenance of a car has a positive derivative and thus has no margin, the more wear and tear the more expensive wear and tear gets. In other words, the limit of the cost of wear and tear as wear goes to infinity is divergent towards positive infinity. Thus, there is no marginal cost.
    - Nydhal 6y ago
      In the real world, you can't spend an infinite amount of money on a car. There is a limit. The margin will come up at some point unless the driver is completely irrational.
      - sudosysgen 6y ago
        Sure, but in the real world that cost is having to buy a new car, which easily increases the cost per mile by 50% and invalidates the point that "you were already driving a car".
- closeparen 6y ago
  It's an exceptionally poor strategy to drop $25k on a new car that only gets 17mpg when your intention is to be a rideshare driver. A purely internal-combustion Civic or Corolla gets twice that. A Prius more than 3x. So do the ones that are 3-4 years old already. And the Prius will probably last closer to 200k miles. I would guess that the ridesharing companies will buy fleets before they'll pay Chevy Tahoe rates for compact sedans.

beached_whale 6y ago

I was talking to a taxi dispatcher at some function here in Canada, and it came up that each vehicle on the road would drive about 500km/day. That's about $200-$250/day in what the per distance rate many employers give out(40¢-50¢/km) for fuel and wear on vehicle. But assuming an 22hrs of driving a day(on a taxi with multiple drivers), that's about 22km each hour or $11/hr for fuel and wear on the vehicle according to what many employers would pay in addition to time driving. This is in Canadian dollars, so $11/hr is about $8/hr in USD and works out to an average of $16USD/hr of driving(assuming (22km|13miles)/hr average)

Skunkleton 6y ago

TCO for a Prius is about 6k a year for non-rideshare applications. The link has this cost around ~13k per year, which isn't outlandish. I think you are right in general though. Uber will let you drive an F-350, but there is no way you will make money with it.

sudosysgen 6y ago

I am almost certain 6$/hr doesn't count depreciation and only part of maintenance. Just fuel costs mean that if you were to drive an average of 20mph, you would pay on average 3$ in gas (in California).