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Oh give me a break. He's basing his entire analysis on the assumption that it costs $22.80/hr to operate a vehicle. They way he comes up with that is by includi
by abalone 13y ago
Oh give me a break. He's basing his entire analysis on the assumption that it costs $22.80/hr to operate a vehicle. They way he comes up with that is by including the up-front cost of the vehicle.
That's not quite the right logic. Most people do not go out and purchase a vehicle just to become a Lyft drivers. Certainly that's not what you should do.
A better economic analysis is to look at Lyft as a way to make your existing personal car a more productive asset. The car is a sunk cost. What you should analyze is the incremental costs of fuel and wear-and-tear for the additional miles driven vs. the Lyft proceeds.
Econ geek footnote: This is assuming there is little-to-no opportunity cost for being a Lyft driver. But for the unemployed that holds true. Lyft may be a more compelling option for unemployed/underemployed car owners.
- pbreit 13y ago> Most people do not go out and purchase a vehicle just to become a Lyft drivers. But that's a likely direction. And if you're trying to make much money from Lyft, you're probably driving it much more for Lyft than for yourself already.
- abalone 13y agoStill counts. As long as you would have bought the vehicle for your own use anyway, it's a sunk cost. Whether or not it's profitable to rent it out via Lyft depends solely on the incremental costs of the extra driving -- not how much extra driving you do. And if it is profitable, then driving more is more profitable, not less.