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A Financial Model Comparing Car Ownership with UberX in Los Angeles

95 points by kaleazy 12y ago

mstdokumaci 12y ago
25.2 miles in 25 minutes in average? it means 60.48 mph or 97.33 km/h. doesn't sound right to me. you can't have that overall average even you always travel intercity.
sixQuarks 12y ago
His calculations are simply wrong. In his examples, the cost of annual car ownership remains $12,744 despite the different mileage estimates. If you drive only 5,000 miles per year, your ownership costs are going to be much less than if you drive 13,000 miles. Why did he not adjust the cost of ownership?
- VLM 12y ago
  "In his examples, the cost of annual car ownership remains $12,744 despite the different mileage estimates." Its actually even worse. The ownership cost lists "Total cost per year (assuming 15,000 miles driven a year)" and that 15K miles is compared to Uber at 5K, 9K, and 13K miles. I am not surprised to discover that it costs more to drive a car 15K miles than 5K miles. There are other assumption problems. For example like almost all people I can't will myself to generate $2500 of extra marginal after tax revenue while driving (and all the math in the article assumes a zero percent income tax rate, which seems optimistic). Frankly in a taxi I'd probably be about as productive as I am in my car, listening to audiobooks. Parking costs tend to be very binary, if you live and work urban its incredibly expensive and the $1K/yr might only be a fond dream. For me, I'm lucky enough not to live urban so its free. I'm mystified how he's both making car payments on an almost new car and paying hundreds per year for maintenance at the same time. My '14 toyota came with a sales incentive or whatever its called such that I won't be paying for anything but gas until the payments are done after which a couple oil changes a year for the next 15 years aren't going to cost $400/yr. I just paid my registration at $75 which is up from $25 two decades ago ago while he's paying over $350. I do not pay property tax on my car, I don't put it past the more uncivilized areas to try that, but its not an issue for me. Maybe he's breaking down the fraction of gasoline fuel pump cost which is taxes, I could believe the numbers in that case. The arithmetic in the article doesn't make much sense.
earino 12y ago
I live in Los Angeles, I have sold my car and now take UberX everywhere. I have a number of reasons for this: 1) I am not a great driver. I learned to drive in a rural area where the dynamics of sharing the road were simply different. It's not fun for me to drive in LA. 2) Parking in this town is a challenge. 3) I telecommute. 4) When I go on a long-drive vacation, I simply rent a car. For me and my family, in our calculations, for a family with a telecommuter in Los Angeles, UberX is well worth it. We don't have to worry about parking when we get somewhere, we don't have to worry about maintenance, and when we do want to go on a long road trip, we simply rent a nice big car that makes sense for that particular trip.
- majormajor 12y ago
  LA is also a very bipolar town, car-wise. If you have a 5+ mile commute, it's going to be way worse than the same distance in most US cities, because of the traffic. But the flip side is that there is far more density to the LA suburbs than most anywhere else in the country—it's hard to even use the same word to describe suburban LA (7K/sqmile average for the whole urbanized area per Wikipedia, with parts significantly higher) as, say, suburban DFW, where the population density is half that for Dallas proper alone, let alone all the suburbs. So if you live near where you work, you can bike or walk or bus and there's a decent chance you'll be in walking or biking distance of some shops and restaurants as well. And then the occasional Uber or cab for longer trips (or just bumming off of friends who have cars) is extremely practical. But if you don't telecommute, being able to live near where you work is something that's a lot easier for those without a family. And then those Ubers would add up fast! (The other thing I've anecdotally noticed since moving to LA, is that the willingness to sit in traffic for an hour each way to commute seems way higher in LA natives than in transplants—and the reverse is true of the willingness to pay the premium to live close to work and avoid that.)
pkaye 12y ago
He makes average assumptions about car ownership but then makes optimistic assumptions about UberX. Like no surge pricing, productivity and wait times. The biggest thing is of course Uber is available in a few cities. Places like SF and Manhattan it might be convenient since everything is nearby but in LA and Silicon Valley everything is spread out.
- WalterSear 12y ago
  The other biggest thing: uber is a one company, and a startup. They may be forced to radically change their business models, their service may turn to shit, and they might even go up in smoke overnight.
  - foobarqux 12y ago
    Unless Uber dramatically alters the price or supply of cars you will still be able to revert to car ownership.
  - krschultz 12y ago
    And if that happens, there are plenty of car dealers ready to take your money. It only takes 2-3 days to buy a car, people do it all the time.
Aloha 12y ago
"About two years ago I sold my Lexus GS 300 and replaced it with a sleek single-speed Pure Fix commuter bike" This brought a vision of someone trying to descend from capitol hill here in seattle on a fixie (something I saw the last week) - a fixie, while still stupid is at least workable in LA (though I'd still never own one, I prefer gears), it still seems wholly impractical for seattle.
- bbrian 12y ago
  I see single-speed bikers as the luddites of cycling. I live in a relatively flat city, Dublin, but I am still constantly shifting gears. I think a lot of people don't understand how good gears really are. In a similar way, there are a lot of people cycling mountain bikes around the city, and I didn't appreciate how much better actual road bikes are while I still had my hybrid. And for non-cyclists: 15 mph (25 kmph) is a fairly reasonable commuting speed.
  - Aloha 12y ago
    neo-luddites perhaps, when I was an active cyclist a bit more than a decade ago the fixie was an unknown thing. There were single speed bikes then - the well known beach cruiser - it was a single speed, yes, but it also could idle along without peddling and had a rear drum brake - I can see a place for that kind of thing - no one has been able to explain to me how a direct drive fixed gear bicycle is better than even that option.
    - joeguilmette 12y ago
      It's like a manual vs an automatic vehicle. You aren't forced to constantly pedal, so much as your legs must move at the same speed as the pedals. At low speeds you are much more connected to the bicycle. Taking a low speed, sharp turn is more akin to walking and feels much more natural. Also, it enforces good form, like pedaling thru turns. Small speed adjustments are natural and easy. Also, when accelerating, the pedals are moving regardless of input, so you can simply tap them down on the downstroke, hovering your foot above the pedal on the up stroke. There is a reason a fixed gear is a popular configuration and it has little to do with being cool or hip.
cpolis 12y ago
The numbers are skewed because the car ownership costs are based on national averages(lower than LA averages, presumably). I think any Angeleno would kill to pay the national average for fuel costs and commute 25.2 miles in 25 minutes.
- fawnzworth 12y ago
  I live in LA, we're LUCKY to go 10 miles in in 25 minutes.
  - Aloha 12y ago
    a decade ago when I still lived in the basin - I found 30 miles an hour bumper to bumper was a pretty normal commute - its better than seattle still :-P
vkjv 12y ago
Wow, I was floored by the average cost of ownership. Mine is nowhere near that low: 1. $0. I don't have payments is 15 years old, so it's not depreciating significantly. 2. $1250. I fill up about once every two weeks. Old cars have less safety features, which me ans better fuel efficiency. 25 mpg. 3. $0. I've never had an auto loan. 4. $300. Old car and perfect driving record. Still have good coverage (uninsured motorist, etc.). 5. $500. Here's where an old car starts to bite. 6. $355. I have no clue so I'll go with what they said. Total ownership: $2405. That's not significantly more than riding the bus would cost.
- MichaelApproved 12y ago
  Fewer safety features /= better fuel efficiency. New cars, loaded with safety feature can get better fuel efficiency than 25mpg. Regarding the 25mpg, is that a recent calculation or are you going off the info sheet your car had when you purchased it. Unless you took excellent care of your car, I'd bet you're not getting 25mpg.
  - mgkimsal 12y ago
    Not the OP, but... My car is 10 years old - 170k miles on it - I still get > 25mpg, and I calculate every fill-up. Long trips I get ~30mpg. Around town it's 26-28, depending on how much I use the AC and at what times I'm driving. Could I be off in my fill-up estimations? Possibly some now and then, but it's been pretty consistent for the last several years.
    - VLM 12y ago
      I've been driving for awhile, and as I think back on all the mileage related mechanical problems my 87 horizon had that would cause an insta ODB-II fail on my 14 toyota, I'm thinking OP is older-ish like me. My '87 was one of the last models with a carb (or am I thinking of the '81 ?) and it had a mechanical choke that would get stuck on a regular basis in the winter and the thermostat also broke / got confused. I think most of the time I was driving around with what on a modern car would be at least 2 or 3 engine code violations. It was reliable as in it always got me to work, but it was not economic or efficient and was usually broken at one level or another. Modern cars are just more reliable and self diagnose very effectively.
foobarqux 12y ago
He completely omits the effect of surge pricing but expects you to use Uber to commute to work.
cj 12y ago
The biggest flaw is the assumption that people who live in cities where Uber is available drive an average of 13,476 miles per year (with avg commute distance of 25 miles). Those numbers are the national average, but I'd guess the average miles per year is significantly lower for people living in major cities. When I lived in rural New York I easily drove 10-20k miles in a year. But now that I live and work in San Francisco, I drive about 3-4k miles per year, with a daily commute of 7 miles round trip. It'd be interesting to see a similar analysis that limits the data set to people who live and work in major cities where Uber is available.
- IvyMike 12y ago
  > I'd guess the average miles per year is significantly lower for people living in major cities. I'll agree, with the exception of Los Angeles, which is atypical in how spread out it is. 13.5k is perfectly believable. http://laist.com/2012/06/30/map_how_many_major_us_cities_can_fi.php http://laist.com/2012/06/30/map_how_many_major_us_cities_can...
medius 12y ago
"In fact, he believes one day all the Uber cars on the road may be driving themselves." What piece of "cars driving themselves" does Uber have? Uber has an app. Google has self driving cars and they can also build an app. So he is basically describing Google's future, not Uber's.
- zevyoura 12y ago
  Google has a $250M investment in Uber.
- polarix 12y ago
  Google is not the only company investing in self-driving cars, so there will almost certainly be a market for purchasing them as well as merely renting. Uber has a proven customer base and elegant transition strategy. It should be an interesting competition, assuming Google doesn't buy Uber outright.
- baddox 12y ago
  Once self-driving cars are available, Uber would be a major company deploying them (assuming Uber is still around and similarly positioned). They could either buy their own cars, or somehow allow private "drivers" to deploy their cars on the Uber network.
  - krschultz 12y ago
    That is certainly the thesis behind the wild valuation of Uber - but so far Uber hasn't really shown the ability to lock customers into its taxi network. Whoever develops the self driving cars can build the Uber app/network part of the system much more easily than Uber will be able to build the self driving car part of the system.
    - pjc50 12y ago
      It's not clear how you could lock someone into a taxi network - by definition, each taxi journey is a separate purchase, unaffected by previous decisions (once you've installed the app in the first place). Prepay discount mentioned above is about the only legitimate possibility. There are plenty of not-so-legitimate possibilities (see the Uber vs Lyft poaching discussion)
policenracism 12y ago
I found his point of being a young black male and not having to be pulled over again to be striking. I am sure that black people are pulled over more times by the police then whites are. What could be the reasoning and the solution(s). Is it because... - The cops are really racist? - The cops are looking for a suspect that matches those unfairly targeted? In which and unfortunately points to a statistic that black males (those from low income areas & raised without a parental unit(s)) are more prone to crime. In the area I live there are really bad parts of town you do not want to enter due to high crime, gangs, murders, etc and that part of town the majority is black. Is there a solution because I know I would be pissed just because I am getting pulled over because I resemble a suspect the cops are looking for. Though maybe the cops are just racist? I don't know just pondering here as this is a current affair topic one that is being talked about more and more these days.
- Aloha 12y ago
  Yes. The cops really are that racist - I'm not black - I'm about as white as you can get even (somewhere in my history there is a Norwegian bachelor-farmer :-P) but I've asked my friends of color, how often they felt they had been pulled over because they were a person of color in a place where a person of color perhaps ought not be - and all of them, uniformly answered "Yes, at least once a year, often more"
- gonzo 12y ago
  LAPD has a long history of racism. They named their HQ after one of the most notorious racists to ever be a cop, never,ind the longest-running chief of police in LAPD history.
- Cowboy_X 12y ago
  "I know I would be pissed just because I am getting pulled over because I resemble a suspect the cops are looking for" The thing is, when white people are looking for a white suspect of a crime, they identify (for example) a heavyset 30-ish white male with short cropped brown hair, wearing a red tshirt and blue jeans. When they are looking for a black suspect, it's "a black male". This attitude is reflected by your own (probably well-intentioned) statement that people who live in a majority-black neighborhood all resemble each other. Take it from a (white) guy who has lived in some -- they don't. P.s. Video of LeVar Burton explaining how he talks to his son about what to do when you get pulled over: http://thinkprogress.org/justice/2013/07/02/2245561/levar-burton-explains-how-he-prevents-violence-when-hes-racially-profiled/ http://thinkprogress.org/justice/2013/07/02/2245561/levar-bu.... This is what a bona fide, well-known and family-friendly celebrity has to deal with in ordinary life.
bane 12y ago
Geez, $12,744 per year? I've had my current car since 2002, which I bought new for about $14,000 (including interest, which was low because I paid the car off as quickly as I possibly could, short circuiting most of the interest payments). I go through the exercise of the total lifetime cost of my car, gas, insurance, maintenace, all told every year or two. And it's somewhere around $.30-.40 per mile or about $1 cheaper than Uber. I recently took it in for its 130,000 mile comprehensive check over and it ended with my mechanic offering me $5,000 for the car (I didn't sell it). It's expected that I should be able to get another 100,000 miles out of this car easily. And at my current rate of driving, that'll be an easy 10 years. I'm pretty sure I'm going to keep this car unless it needs major mechanical repairs, and so far it hasn't. All this means is that my cost per mile keeps going down. I'm at well under <$4k per year, all lifetime costs included, amortized over the time I've owned this car and and that number is going down every year. Right now I probably drive under 5,000 miles per year (telecommuting is amazing) and even these astonishingly hopeful UberX costs (60 mph commute times everywhere in cities bah!) are almost twice what it costs for me to have my own car I do whatever I want with. More realistically, these commute times could easily be tripled in most cities, making UberX even less of an option. The only thing this answers is "will taking Uber on the occasional 25 minute or less trip cost less than owning a $50,000 MSRP luxury mid-sized sedan?" then the answer is obviously yes. Honestly, if your starting point is a Lexus, you're not really all that concerned with your transport costs to start with. edit I don't even think the math is right. Let's assume his 24.2 mile commute in 25 minutes (haha!). Uber charges $1.10 + $.21 per minute or $1.31 per mile at 60mph. So let's just make the numbers easier, 25 mile commute in 25 minutes, so the commute ~ $1.31 * 25 = $32.75. But I have to go home again in the evening. * 2 = $65.50 per day. * 250 work days in the year = $16,375. He's off by about $10,000 even assuming these ridiculous commute times.
- notastartup 12y ago
  what car are you driving and how much mileage was on it when you bought it? I honestly think to get from point A to B, a used car will do the job just fine, sounds pretty good from what you've described.
  - 12y ago
eks 12y ago
Uber is great, but the biggest cost is that you need to pay for the services of someone driving for you. I live in Montreal and regularly use http://communauto.com/ http://communauto.com/ They have two services, 1) for ~$2,50/hour + $0,10/km, where you need to make a reservation, you get the car from one specific parking lot and have to return it there. It's useful only if you plan in advance, if you haven't reserved a car for the weekend by Wednesday forget about it. The 2) service though you just swipe your metro card on the panel for an auto-mobile car parked somewhere, drive for $0,30/minute and leave the car anywhere (in some very big zones in the cities). It's exactly like https://www.car2go.com/ https://www.car2go.com/ except their auto-mobile vehicles (hybrids and electrics) have backseat, so we can go around with kids (whereas you can't with a Smart). I commute by bicycle to work, so we use this only on the weekends. It takes around $7 to go from our place to the center, while public transport would be $5, so it's really great for the convenience and speed. By far it really beats owning a car in Montreal in cost and convenience. Parking space is limited and very expensive ($8 for 2 hours in city center). If you have a car you have also to keep changing parking even if you don't use it because there are very few buildings with garage and they clean the streets at least once or twice a week for the entire year. I've been car-free for over 20 years, it's a huge relief to not have to worry about taxes, maintenance, robbery, etc etc that comes with the responsibility of owning a car. Come self-driving cars, we might have only some very few people that will keep owning their own vehicles due to some nostalgia feeling.
webwright 12y ago
Should've run the numbers with Car2Go. Uber in LA costs 67 cents per minute (avg. speed in LA is 26MPH). Car2Go in LA costs 25-41 cents per minute (41 per minute with a max of $15/hr). Unsurprisingly, one of the more expensive parts about Uber is having a human being driving the car for you. Car2Go (if you don't mind driving janky little SmartCars) trims that cost now.
- TTPrograms 12y ago
  You can't work during the commute in that case, however - the author referred to this as an opportunity cost of driving. Working in tech one would imagine in many cases work would be much more productive than driving.
Aloha 12y ago
I grew up in LA - Uber is a practical car replacement option if you stay largely within your neighborhood or city. This isn't how most people in the basin live however - many (if not most) live at least 10, but usually closer to 20-25 miles from work, and rely on the freeway to get them to work - 50+ miles a day even in an UberX is not practical from a cost basis - not when you consider the large number of people who don't go out and buy a large luxury car, but instead pick up a beater economy car from craigslist, or something that they bought new a decade or more prior. The comparison however does work when you consider someone who commutes under 10 miles each way a day, and buys a new car every 3-5 years.
gameshot911 12y ago
The model assumes 50% of full working productivity while taking an UberX ride. I doubt many people are going to meet that over the course of all their rides, not to mention that if you're salaried you aren't losing wages by not working in the car.
- willhinsa 12y ago
  You may not be losing wages, but you are losing time. I think that the 50% assumption in the model is wrong, too, but in the opposite direction. There are activities that many people can do while riding in a vehicle with no loss of quality, like reading. Randy Pausch - Time Management https://www.youtube.com/watch?v=oTugjssqOT0 https://www.youtube.com/watch?v=oTugjssqOT0
  - gameshot911 12y ago
    Good point, I didn't think about the value of being able to do other activities. Hard to quantify with a monetary value though!
    - willhinsa 12y ago
      Actually it's not difficult. Calculate your hourly wage (salary + benefits)/hours_worked, and value all of your time as such. It will help you a lot to avoid wasting time doing stuff you don't like that you can pay people to do for you at a lower cost to you.
      - ghaff 12y ago
        That makes the assumption that you can earn that wage in the incremental time you gain by having someone do a task for you. Maybe if you're an independent consultant or otherwise have a business where you bill by the hour and are turning down work you simply don't have time to do but would otherwise be happy to take it. But that doesn't describe most people. I do pay to have a number of things done for me on a regular basis that I either don't like to do or don't consistently have the time to do (like getting my lawn cut), but it's more about how much I'm willing to pay for the service as opposed to how the $/hour compares to what I earn.
diego 12y ago
The article disregards the fact that a car has features that Uber doesn't. One is mobile storage: you can store things in your car that you often need wherever you go. This is particularly important for parents of young children. Another one is instant availability for open-ended road trips. It's not feasible to go visit a friend two hours away with the possibility of staying overnight with an Uber. If you're going to include the cost of car ownership disadvantages such as tickets, you should also include the cost of Uber-dependency disadvantages such as the occasional need to rent a car, always loading and unloading everything you need to take with you, etc.
- harpastum 12y ago
  This is a good point, but there are also several Uber benefits over car ownership. For example, being able to travel when tired/inebriated. Also, not being late if you have an engine issue or get a flat tire. This article tries to enumerate the financial differences, the subjective ones are also very important.
  - MisterBastahrd 12y ago
    The fun thing about that is that you can use Uber in those circumstances, and still have the freedom to jump in your car and drive off whenever you want to instead of living by someone else's schedule. His argument is just plain bad.
    - prostoalex 12y ago
      It's not an argument for or against, it's the argument of cost - "freedom to jump in your car and drive off whenever you want to" is worth more to you than others. There are people that take a road trip on any given weekend, and there are those who only travel out of their county when work necessitates it.
  - VLM 12y ago
    "Also, not being late if you have an engine issue or get a flat tire." How does uber prevent that? I suppose with a fleet of cars, another could pick you up, but you're still going to be late (just not as late) (edited to add, and on the frontend, I can guarantee that about 45 seconds after leaving the door at work, I'll be starting my car and moving out of the lot, how does uber guarantee that a car will be ready to leave for work within say 15 minutes, so I'd have to burn much more total commute time to make sure theres a realistic chance I won't be late. TLDR is the std deviation of a rental is going to be very large compared to an owned car.)
notastartup 12y ago
This brings total costs to $18,115 per year ($1509 per month) if you used UberX to drive everywhere. Unfortunately, even without car payments and depreciation, fuel costs, interest, insurance, maintenance and repairs, registration and taxes, parking fees, speeding tickets and opportunity costs, Uber is still slightly more expensive for the average American who drives 13,476 miles per year. In this case, it would be cheaper to own and drive the medium-sized sedan.
usaar333 12y ago
Having done these calculations a while back, I was seriously thrown off by this claim: > However, Americans who drive less than 9,481 miles in a year should seriously consider ditching their car, because UberX will be cheaper. Well, maybe. I drive 5k miles a year and determined that it would be more expensive to shift to either UberX or Zipcar. Let's see what is up with the math: > Costs of ownership The largest error is here, where the author uses a constant number regardless of miles driven -- and then compares it to variable w/ miles UberX costs!. But maintenance, insurance, depreciation, and fuel costs are all costs that increase with miles driven. Secondly, all these costs are taken from AAA numbers that are looking at 5 year depreciation of a new car. If you drive an older vehicle, your costs are nowhere near this high. (if they are to be believed, my cars' annual depreciation would be 80% of the value of my car!) > Parking costs at $1300/year First off, the claim on ABC is "average American family", not "average American" (http://abcnews.go.com/WNT/video/average-american-spends-1300-year-parking-21216093 http://abcnews.go.com/WNT/video/average-american-spends-1300...), so this is likely off by a factor of nearly 2. Secondly, this is massively skewed by location. In dense locations (say SF), this can shoot into $2000+ a year, but in lower density places (say San Jose area), this may be well under $200. Finally, workplace parking can be paid by pre-tax dollars which lowers this cost by another 30% or so. > Opportunity costs Where is the assumption that car driving is at 0% productivity and UberX riding is at 50% productivity coming from? (I definitely don't believe this empirically) Also note this is ignoring any opportunity cost of having to wait for an UberX to arrive. The real opportunity cost difference may be insignificant. My own conclusion: A single article won't allow anyone to make a determiniation. UberX may win in some cases over owning a car, but it is highly dependent on individual behavior.
- refurb 12y ago
  The only way i can see the average American paying $1300 per year or $100/month is if they are including the added cost of have a parking space at home. Remember, $1300 is the average. Most Americans pay nothing for parking except for a few $10-20 parking fees when going to a big city. I'm guessing the assumption is that if you rent a place for $1500 per month and it has a parking space, $100 of that is the cost of the parking space. Technically correct, but an odd way to look at it.
RealGeek 12y ago
The cost of car ownership in this article is inflated by almost 200%. It accounts payments / depreciation + interest + registration as $5,561 yearly for a mid sized sedan. I've leased two mid-size sedans for $200/mo and $300/mo including interest, all taxes, dmv / title / registration fees. So, I am paying $2,400 / year for one car, and $3,600 /year for another, compared to $5,561 represented in the article.
pacaro 12y ago
None of this is relevant if you have a child or dog. I know that Uber are starting to make provisions for children but there's a long way to go. But try getting a 140lb dog to the vet without your own car...
- thrownaway2424 12y ago
  Why do people insist on bringing up things like this that are totally irrelevant to the common case? Only half of American households own dogs and 140lbs is a 99.9th-percentile dog body weight so this little issue of yours is relevant to at most one of every 2000 households. You also can't haul an alpaca in uber, since we're enumerating corner cases.
  - pacaro 12y ago
    Hahahaha, true I have a ridiculous dog, but the classic family pet (I'm thinking lab, retriever, pit, etc.) is easily in the 40-90 lb range. I have no idea what taxi or Uber policies are for this situation, I know that they turn a blind eye to dogs small enough to be held on your lap. To literally replace the family car all these cases need to be covered, not just the convenient single urbanite cases
    - thrownaway2424 12y ago
      To make a huge positive benefit in our transportation system and built environment we need only take 10% of cars off the road, so I think they won't come to take away your family car just yet. Certainly there are many excellent reasons to own one. But on the other hand the impossibility of car-free and car-light lifestyles are overstated.
- eurleif 12y ago
  Uber leaves whether to allow pets up to the individual driver[0], and suggests calling the driver after ordering the ride. I imagine if you ordered an SUV (uberXL), it would very likely be fine. [0]https://support.uber.com/hc/en-us/articles/201955127-Can-I-ride-with-pets- https://support.uber.com/hc/en-us/articles/201955127-Can-I-r...
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cpprototypes 12y ago
For Los Angeles, UberX, Lyft, and others have the potential to solve the "last mile" issue of public transit. Especially with newer carpool features like UberPool and Lyft Line. LA is currently investing a lot into building more light rail infrastructure. However, regardless of how much LA invests in rail, for most commuters the rail will only get them most of the way to their workplace. Before UberX and Lyft, the only options for the last leg of the trip were bicycle (which has a lot of limits), bus (too unreliable), and taxi (too expensive). UberX and Lyft provide an option that didn't exist before. And it's cheap and reliable enough to a be a very good option. As LA continues to build more rail, I think it has the potential to greatly change commuting in the future. Maybe it will become common for young single people to not own a car and rely on Uber/Lyft combined with rail. And then when they get married and have kids, then buying one car makes sense. The result would also greatly reduce traffic and air pollution.
- jusben1369 12y ago
  Great points! I actually fear that investment in light rail is going to look misplaced in just 10 years when automated electric cars operated by private companies like Uber and Lyft and whomever are going to scoot multiple people between two common points.
  - wj 12y ago
    Potentially. But LA has millions of daily commuters. Automated electric cars will still clog up the freeways (thought hopefully less so due to less accidents, etc.) but the light rail should hopefully move more people quickly for 80% of their trips with Uber and Lyft providing the last mile. I personally think they should stop construction on the subway to the sea and roll our light rail across the city.
    - jusben1369 12y ago
      I hear what you're saying. But what is light rail but several electric cars daisy chained? If you can put 4 people in one (a la car pooling) and give them a dedicated HOV lane between places.......
jusben1369 12y ago
This is great work! Most comments here are always going to go negative on the data he collects. "This is not true! I own a 1981 VW diesel with 220,000 miles on it and the only thing I've had to fix...." Avoiding those ratholes for a moment I want to look at the other side. The Uber economics. Uber's pricing is based on the assumption that you're not using Uber as your full time car replacement. Put another way, I'm waiting for the Uber monthly subscription that gives me up to X miles per month for Y cost. If I commit to that many miles I'm pretty sure that can drive down the cost per mile in a meaningful way....say 20 - 30% vs the current "pay as you go on demand model" Lastly I think the first logical place to look is the 2 car family. You can shelve one and still have your own car for long family vacation trips or other immediate requirements while using Uber for that person that's got a pretty predictable 5 day a week commute etc.
- afafsd 12y ago
  >This is great work! Most comments here are always going to go negative on the data he collects That's because the "data" is crap. He's picked numbers to get an unreasonably high idea of the cost of owning a car, then used rosy assumptions to show that Uber is cheaper. Change the input and you change the conclusions, so I'm not going to give the guy a pat on the head just for effort.
wj 12y ago
Every article about Uber, Lyft, and electric vehicles ends up with the majority of the comments saying something along the lines of, "This is stupid because it doesn't fit my situation." For what is usually such an open-minded group of individuals it seems as if personal transportation is the topic where that open-mindedness doesn't extend. (Though that might be true for the population as a whole--gas prices is a legitimate political issue.)
- sokoloff 12y ago
  Opining about the negative convenience aspects of relying on a car service is hardly being closed-minded, IMO. There are very legitimate hurdles to Über et al displacing private cars. Talking about those hurdles (aside from the joking alpaca one) is normal, not evidence of closed-mindedness.
ilaksh 12y ago
Lyft is actually a little cheaper isn't it? So how does that affect the calculation?
contingencies 12y ago
I lived in LA for a year and don't even have a license. I bought a road bike and cycled to and from work, though if drinking was (frequently) involved I'd throw my bike in the back of a cab. Assuming the average fare was around $60, and I used a cab five times per week, that was $300/week. I was considering buying a motorbike to evade this rising fee when our company was bought by HTC, the company reshuffled, by job disappeared, and I was suddenly placed in to a US visa expiry grace period where I had 10 days to get out of the country or face being an illegal immigrant (despite many people wanting to employ me, I had to leave and return to comply with their visa rules). I opted out (once bitten, twice shy re: visas), and was very glad that I only had to sell my road bike at a loss... rather than a car.
rdl 12y ago
I will probably remain a holdout for personal vehicle ownership even if the economics don't work out, but I think in my case they don't, anyway. 2006 Audi A4, paid off (worth about $12k as it sits), with 126k miles. $300/yr reg, $600/yr comprehensive/collision/liability insurance. I spent about $600 every 2 years on tires (so, $300/yr), $500-1000/yr on maintenance otherwise, and drive about 20k miles/yr. Free parking at home; $260/mo parking in SF, and $4-6 bridge tolls about 20 times a month. I get about 22mpg with premium gas, so $4.20/gal or so in California. I think my costs are around $0.40/mi. In any case, less than $0.57/mi, so it's "free" when reimbursed. Plus I actually like driving. Being able to go from home to office in 17 minutes off-peak, or ~30 minutes 98th percentile traffic, vs. 50+ miles via transit, and not having to be around SF people for 2h/day: worth every penny. (Also, having earthquake, colo-emergency, etc. stuff stashed in the trunk all the time, and a huge battery and generator for laptop, cell, etc.)
mathgladiator 12y ago
This is a great start. I would love to see a calculator similar to NY times mortgage calculator.
chrismcb 12y ago
The math in this article is awful. Constant cost despite varying the miles driven. Making money out of thin air. Yes you can talk about intangibles, such as the ability to do work while not driving. You can even give that a monetary value to do comparisons. But I'm not going to make more money by working while not driving, so don't add this opportunity cost to the cost of the car. Or maybe you should add up the opportunity cost of waiting for the uber car. You also can't just ignore surge pricing. Not everyone needs to own a car. But there are a lot of advantages, some that are hard to put a dollar figure on.
chrismcb 12y ago
The math in this article is awful. Constant cost despite varying the miles driven. Making money out of thin air. Yes you can talk about intangibles, such as the ability to do work while not driving. You can even give that a monetary value to do comparisons. But I'm not going to make more money by working while not driving, so don't add this opportunity cost to the cost of the car. Or maybe you should add up the opportunity cost of waiting for the uber car. You also can't just ignore surge pricing. Not everyone needs to own a car. But there are a lot of advantages, some that are hard to put a dollar figure on.
taksintik 12y ago
Self driving car = best of both worlds
stevenhubertron 12y ago
The calculations also aren't factoring in resell. Sure I might buy a car for $25,000, but when I sell it I am going to get at least $10,000 back out of it so the car itself only costs $15,00. If you combine that with buying used, better gas milages in cars and piece of mind the calculation becomes harder. Especially if your in an urban city with multiple transportation options.
lucberlin 12y ago
Who drives less than 5k miles/year? And if you do, public transportation is probably excellent?

95 points by kaleazy 12y ago

25.2 miles in 25 minutes in average? it means 60.48 mph or 97.33 km/h. doesn't sound right to me. you can't have that overall average even you always travel intercity.

sixQuarks 12y ago

His calculations are simply wrong. In his examples, the cost of annual car ownership remains $12,744 despite the different mileage estimates. If you drive only 5,000 miles per year, your ownership costs are going to be much less than if you drive 13,000 miles. Why did he not adjust the cost of ownership?

VLM 12y ago
"In his examples, the cost of annual car ownership remains $12,744 despite the different mileage estimates." Its actually even worse. The ownership cost lists "Total cost per year (assuming 15,000 miles driven a year)" and that 15K miles is compared to Uber at 5K, 9K, and 13K miles. I am not surprised to discover that it costs more to drive a car 15K miles than 5K miles. There are other assumption problems. For example like almost all people I can't will myself to generate $2500 of extra marginal after tax revenue while driving (and all the math in the article assumes a zero percent income tax rate, which seems optimistic). Frankly in a taxi I'd probably be about as productive as I am in my car, listening to audiobooks. Parking costs tend to be very binary, if you live and work urban its incredibly expensive and the $1K/yr might only be a fond dream. For me, I'm lucky enough not to live urban so its free. I'm mystified how he's both making car payments on an almost new car and paying hundreds per year for maintenance at the same time. My '14 toyota came with a sales incentive or whatever its called such that I won't be paying for anything but gas until the payments are done after which a couple oil changes a year for the next 15 years aren't going to cost $400/yr. I just paid my registration at $75 which is up from $25 two decades ago ago while he's paying over $350. I do not pay property tax on my car, I don't put it past the more uncivilized areas to try that, but its not an issue for me. Maybe he's breaking down the fraction of gasoline fuel pump cost which is taxes, I could believe the numbers in that case. The arithmetic in the article doesn't make much sense.

earino 12y ago

I live in Los Angeles, I have sold my car and now take UberX everywhere. I have a number of reasons for this: 1) I am not a great driver. I learned to drive in a rural area where the dynamics of sharing the road were simply different. It's not fun for me to drive in LA. 2) Parking in this town is a challenge. 3) I telecommute. 4) When I go on a long-drive vacation, I simply rent a car. For me and my family, in our calculations, for a family with a telecommuter in Los Angeles, UberX is well worth it. We don't have to worry about parking when we get somewhere, we don't have to worry about maintenance, and when we do want to go on a long road trip, we simply rent a nice big car that makes sense for that particular trip.

majormajor 12y ago
LA is also a very bipolar town, car-wise. If you have a 5+ mile commute, it's going to be way worse than the same distance in most US cities, because of the traffic. But the flip side is that there is far more density to the LA suburbs than most anywhere else in the country—it's hard to even use the same word to describe suburban LA (7K/sqmile average for the whole urbanized area per Wikipedia, with parts significantly higher) as, say, suburban DFW, where the population density is half that for Dallas proper alone, let alone all the suburbs. So if you live near where you work, you can bike or walk or bus and there's a decent chance you'll be in walking or biking distance of some shops and restaurants as well. And then the occasional Uber or cab for longer trips (or just bumming off of friends who have cars) is extremely practical. But if you don't telecommute, being able to live near where you work is something that's a lot easier for those without a family. And then those Ubers would add up fast! (The other thing I've anecdotally noticed since moving to LA, is that the willingness to sit in traffic for an hour each way to commute seems way higher in LA natives than in transplants—and the reverse is true of the willingness to pay the premium to live close to work and avoid that.)

pkaye 12y ago

He makes average assumptions about car ownership but then makes optimistic assumptions about UberX. Like no surge pricing, productivity and wait times. The biggest thing is of course Uber is available in a few cities. Places like SF and Manhattan it might be convenient since everything is nearby but in LA and Silicon Valley everything is spread out.

WalterSear 12y ago
The other biggest thing: uber is a one company, and a startup. They may be forced to radically change their business models, their service may turn to shit, and they might even go up in smoke overnight.
- foobarqux 12y ago
  Unless Uber dramatically alters the price or supply of cars you will still be able to revert to car ownership.
- krschultz 12y ago
  And if that happens, there are plenty of car dealers ready to take your money. It only takes 2-3 days to buy a car, people do it all the time.

Aloha 12y ago

"About two years ago I sold my Lexus GS 300 and replaced it with a sleek single-speed Pure Fix commuter bike" This brought a vision of someone trying to descend from capitol hill here in seattle on a fixie (something I saw the last week) - a fixie, while still stupid is at least workable in LA (though I'd still never own one, I prefer gears), it still seems wholly impractical for seattle.

bbrian 12y ago
I see single-speed bikers as the luddites of cycling. I live in a relatively flat city, Dublin, but I am still constantly shifting gears. I think a lot of people don't understand how good gears really are. In a similar way, there are a lot of people cycling mountain bikes around the city, and I didn't appreciate how much better actual road bikes are while I still had my hybrid. And for non-cyclists: 15 mph (25 kmph) is a fairly reasonable commuting speed.
- Aloha 12y ago
  neo-luddites perhaps, when I was an active cyclist a bit more than a decade ago the fixie was an unknown thing. There were single speed bikes then - the well known beach cruiser - it was a single speed, yes, but it also could idle along without peddling and had a rear drum brake - I can see a place for that kind of thing - no one has been able to explain to me how a direct drive fixed gear bicycle is better than even that option.
  - joeguilmette 12y ago
    It's like a manual vs an automatic vehicle. You aren't forced to constantly pedal, so much as your legs must move at the same speed as the pedals. At low speeds you are much more connected to the bicycle. Taking a low speed, sharp turn is more akin to walking and feels much more natural. Also, it enforces good form, like pedaling thru turns. Small speed adjustments are natural and easy. Also, when accelerating, the pedals are moving regardless of input, so you can simply tap them down on the downstroke, hovering your foot above the pedal on the up stroke. There is a reason a fixed gear is a popular configuration and it has little to do with being cool or hip.

cpolis 12y ago

The numbers are skewed because the car ownership costs are based on national averages(lower than LA averages, presumably). I think any Angeleno would kill to pay the national average for fuel costs and commute 25.2 miles in 25 minutes.

fawnzworth 12y ago
I live in LA, we're LUCKY to go 10 miles in in 25 minutes.
- Aloha 12y ago
  a decade ago when I still lived in the basin - I found 30 miles an hour bumper to bumper was a pretty normal commute - its better than seattle still :-P

vkjv 12y ago

Wow, I was floored by the average cost of ownership. Mine is nowhere near that low: 1. $0. I don't have payments is 15 years old, so it's not depreciating significantly. 2. $1250. I fill up about once every two weeks. Old cars have less safety features, which me ans better fuel efficiency. 25 mpg. 3. $0. I've never had an auto loan. 4. $300. Old car and perfect driving record. Still have good coverage (uninsured motorist, etc.). 5. $500. Here's where an old car starts to bite. 6. $355. I have no clue so I'll go with what they said. Total ownership: $2405. That's not significantly more than riding the bus would cost.

MichaelApproved 12y ago
Fewer safety features /= better fuel efficiency. New cars, loaded with safety feature can get better fuel efficiency than 25mpg. Regarding the 25mpg, is that a recent calculation or are you going off the info sheet your car had when you purchased it. Unless you took excellent care of your car, I'd bet you're not getting 25mpg.
- mgkimsal 12y ago
  Not the OP, but... My car is 10 years old - 170k miles on it - I still get > 25mpg, and I calculate every fill-up. Long trips I get ~30mpg. Around town it's 26-28, depending on how much I use the AC and at what times I'm driving. Could I be off in my fill-up estimations? Possibly some now and then, but it's been pretty consistent for the last several years.
  - VLM 12y ago
    I've been driving for awhile, and as I think back on all the mileage related mechanical problems my 87 horizon had that would cause an insta ODB-II fail on my 14 toyota, I'm thinking OP is older-ish like me. My '87 was one of the last models with a carb (or am I thinking of the '81 ?) and it had a mechanical choke that would get stuck on a regular basis in the winter and the thermostat also broke / got confused. I think most of the time I was driving around with what on a modern car would be at least 2 or 3 engine code violations. It was reliable as in it always got me to work, but it was not economic or efficient and was usually broken at one level or another. Modern cars are just more reliable and self diagnose very effectively.

foobarqux 12y ago

He completely omits the effect of surge pricing but expects you to use Uber to commute to work.

cj 12y ago

The biggest flaw is the assumption that people who live in cities where Uber is available drive an average of 13,476 miles per year (with avg commute distance of 25 miles). Those numbers are the national average, but I'd guess the average miles per year is significantly lower for people living in major cities. When I lived in rural New York I easily drove 10-20k miles in a year. But now that I live and work in San Francisco, I drive about 3-4k miles per year, with a daily commute of 7 miles round trip. It'd be interesting to see a similar analysis that limits the data set to people who live and work in major cities where Uber is available.

IvyMike 12y ago
> I'd guess the average miles per year is significantly lower for people living in major cities. I'll agree, with the exception of Los Angeles, which is atypical in how spread out it is. 13.5k is perfectly believable. http://laist.com/2012/06/30/map_how_many_major_us_cities_can_fi.php http://laist.com/2012/06/30/map_how_many_major_us_cities_can...

medius 12y ago

"In fact, he believes one day all the Uber cars on the road may be driving themselves." What piece of "cars driving themselves" does Uber have? Uber has an app. Google has self driving cars and they can also build an app. So he is basically describing Google's future, not Uber's.

zevyoura 12y ago
Google has a $250M investment in Uber.
polarix 12y ago
Google is not the only company investing in self-driving cars, so there will almost certainly be a market for purchasing them as well as merely renting. Uber has a proven customer base and elegant transition strategy. It should be an interesting competition, assuming Google doesn't buy Uber outright.
baddox 12y ago
Once self-driving cars are available, Uber would be a major company deploying them (assuming Uber is still around and similarly positioned). They could either buy their own cars, or somehow allow private "drivers" to deploy their cars on the Uber network.
- krschultz 12y ago
  That is certainly the thesis behind the wild valuation of Uber - but so far Uber hasn't really shown the ability to lock customers into its taxi network. Whoever develops the self driving cars can build the Uber app/network part of the system much more easily than Uber will be able to build the self driving car part of the system.
  - pjc50 12y ago
    It's not clear how you could lock someone into a taxi network - by definition, each taxi journey is a separate purchase, unaffected by previous decisions (once you've installed the app in the first place). Prepay discount mentioned above is about the only legitimate possibility. There are plenty of not-so-legitimate possibilities (see the Uber vs Lyft poaching discussion)

policenracism 12y ago

I found his point of being a young black male and not having to be pulled over again to be striking. I am sure that black people are pulled over more times by the police then whites are. What could be the reasoning and the solution(s). Is it because... - The cops are really racist? - The cops are looking for a suspect that matches those unfairly targeted? In which and unfortunately points to a statistic that black males (those from low income areas & raised without a parental unit(s)) are more prone to crime. In the area I live there are really bad parts of town you do not want to enter due to high crime, gangs, murders, etc and that part of town the majority is black. Is there a solution because I know I would be pissed just because I am getting pulled over because I resemble a suspect the cops are looking for. Though maybe the cops are just racist? I don't know just pondering here as this is a current affair topic one that is being talked about more and more these days.

Aloha 12y ago
Yes. The cops really are that racist - I'm not black - I'm about as white as you can get even (somewhere in my history there is a Norwegian bachelor-farmer :-P) but I've asked my friends of color, how often they felt they had been pulled over because they were a person of color in a place where a person of color perhaps ought not be - and all of them, uniformly answered "Yes, at least once a year, often more"
gonzo 12y ago
LAPD has a long history of racism. They named their HQ after one of the most notorious racists to ever be a cop, never,ind the longest-running chief of police in LAPD history.
Cowboy_X 12y ago
"I know I would be pissed just because I am getting pulled over because I resemble a suspect the cops are looking for" The thing is, when white people are looking for a white suspect of a crime, they identify (for example) a heavyset 30-ish white male with short cropped brown hair, wearing a red tshirt and blue jeans. When they are looking for a black suspect, it's "a black male". This attitude is reflected by your own (probably well-intentioned) statement that people who live in a majority-black neighborhood all resemble each other. Take it from a (white) guy who has lived in some -- they don't. P.s. Video of LeVar Burton explaining how he talks to his son about what to do when you get pulled over: http://thinkprogress.org/justice/2013/07/02/2245561/levar-burton-explains-how-he-prevents-violence-when-hes-racially-profiled/ http://thinkprogress.org/justice/2013/07/02/2245561/levar-bu.... This is what a bona fide, well-known and family-friendly celebrity has to deal with in ordinary life.

bane 12y ago

Geez, $12,744 per year? I've had my current car since 2002, which I bought new for about $14,000 (including interest, which was low because I paid the car off as quickly as I possibly could, short circuiting most of the interest payments). I go through the exercise of the total lifetime cost of my car, gas, insurance, maintenace, all told every year or two. And it's somewhere around $.30-.40 per mile or about $1 cheaper than Uber. I recently took it in for its 130,000 mile comprehensive check over and it ended with my mechanic offering me $5,000 for the car (I didn't sell it). It's expected that I should be able to get another 100,000 miles out of this car easily. And at my current rate of driving, that'll be an easy 10 years. I'm pretty sure I'm going to keep this car unless it needs major mechanical repairs, and so far it hasn't. All this means is that my cost per mile keeps going down. I'm at well under <$4k per year, all lifetime costs included, amortized over the time I've owned this car and and that number is going down every year. Right now I probably drive under 5,000 miles per year (telecommuting is amazing) and even these astonishingly hopeful UberX costs (60 mph commute times everywhere in cities bah!) are almost twice what it costs for me to have my own car I do whatever I want with. More realistically, these commute times could easily be tripled in most cities, making UberX even less of an option. The only thing this answers is "will taking Uber on the occasional 25 minute or less trip cost less than owning a $50,000 MSRP luxury mid-sized sedan?" then the answer is obviously yes. Honestly, if your starting point is a Lexus, you're not really all that concerned with your transport costs to start with. edit I don't even think the math is right. Let's assume his 24.2 mile commute in 25 minutes (haha!). Uber charges $1.10 + $.21 per minute or $1.31 per mile at 60mph. So let's just make the numbers easier, 25 mile commute in 25 minutes, so the commute ~ $1.31 * 25 = $32.75. But I have to go home again in the evening. * 2 = $65.50 per day. * 250 work days in the year = $16,375. He's off by about $10,000 even assuming these ridiculous commute times.

notastartup 12y ago
what car are you driving and how much mileage was on it when you bought it? I honestly think to get from point A to B, a used car will do the job just fine, sounds pretty good from what you've described.
- 12y ago

eks 12y ago

Uber is great, but the biggest cost is that you need to pay for the services of someone driving for you. I live in Montreal and regularly use http://communauto.com/ http://communauto.com/ They have two services, 1) for ~$2,50/hour + $0,10/km, where you need to make a reservation, you get the car from one specific parking lot and have to return it there. It's useful only if you plan in advance, if you haven't reserved a car for the weekend by Wednesday forget about it. The 2) service though you just swipe your metro card on the panel for an auto-mobile car parked somewhere, drive for $0,30/minute and leave the car anywhere (in some very big zones in the cities). It's exactly like https://www.car2go.com/ https://www.car2go.com/ except their auto-mobile vehicles (hybrids and electrics) have backseat, so we can go around with kids (whereas you can't with a Smart). I commute by bicycle to work, so we use this only on the weekends. It takes around $7 to go from our place to the center, while public transport would be $5, so it's really great for the convenience and speed. By far it really beats owning a car in Montreal in cost and convenience. Parking space is limited and very expensive ($8 for 2 hours in city center). If you have a car you have also to keep changing parking even if you don't use it because there are very few buildings with garage and they clean the streets at least once or twice a week for the entire year. I've been car-free for over 20 years, it's a huge relief to not have to worry about taxes, maintenance, robbery, etc etc that comes with the responsibility of owning a car. Come self-driving cars, we might have only some very few people that will keep owning their own vehicles due to some nostalgia feeling.

webwright 12y ago

Should've run the numbers with Car2Go. Uber in LA costs 67 cents per minute (avg. speed in LA is 26MPH). Car2Go in LA costs 25-41 cents per minute (41 per minute with a max of $15/hr). Unsurprisingly, one of the more expensive parts about Uber is having a human being driving the car for you. Car2Go (if you don't mind driving janky little SmartCars) trims that cost now.

TTPrograms 12y ago
You can't work during the commute in that case, however - the author referred to this as an opportunity cost of driving. Working in tech one would imagine in many cases work would be much more productive than driving.

Aloha 12y ago

I grew up in LA - Uber is a practical car replacement option if you stay largely within your neighborhood or city. This isn't how most people in the basin live however - many (if not most) live at least 10, but usually closer to 20-25 miles from work, and rely on the freeway to get them to work - 50+ miles a day even in an UberX is not practical from a cost basis - not when you consider the large number of people who don't go out and buy a large luxury car, but instead pick up a beater economy car from craigslist, or something that they bought new a decade or more prior. The comparison however does work when you consider someone who commutes under 10 miles each way a day, and buys a new car every 3-5 years.

gameshot911 12y ago

The model assumes 50% of full working productivity while taking an UberX ride. I doubt many people are going to meet that over the course of all their rides, not to mention that if you're salaried you aren't losing wages by not working in the car.

willhinsa 12y ago
You may not be losing wages, but you are losing time. I think that the 50% assumption in the model is wrong, too, but in the opposite direction. There are activities that many people can do while riding in a vehicle with no loss of quality, like reading. Randy Pausch - Time Management https://www.youtube.com/watch?v=oTugjssqOT0 https://www.youtube.com/watch?v=oTugjssqOT0
- gameshot911 12y ago
  Good point, I didn't think about the value of being able to do other activities. Hard to quantify with a monetary value though!
  - willhinsa 12y ago
    Actually it's not difficult. Calculate your hourly wage (salary + benefits)/hours_worked, and value all of your time as such. It will help you a lot to avoid wasting time doing stuff you don't like that you can pay people to do for you at a lower cost to you.
    - ghaff 12y ago
      That makes the assumption that you can earn that wage in the incremental time you gain by having someone do a task for you. Maybe if you're an independent consultant or otherwise have a business where you bill by the hour and are turning down work you simply don't have time to do but would otherwise be happy to take it. But that doesn't describe most people. I do pay to have a number of things done for me on a regular basis that I either don't like to do or don't consistently have the time to do (like getting my lawn cut), but it's more about how much I'm willing to pay for the service as opposed to how the $/hour compares to what I earn.

diego 12y ago

The article disregards the fact that a car has features that Uber doesn't. One is mobile storage: you can store things in your car that you often need wherever you go. This is particularly important for parents of young children. Another one is instant availability for open-ended road trips. It's not feasible to go visit a friend two hours away with the possibility of staying overnight with an Uber. If you're going to include the cost of car ownership disadvantages such as tickets, you should also include the cost of Uber-dependency disadvantages such as the occasional need to rent a car, always loading and unloading everything you need to take with you, etc.

harpastum 12y ago
This is a good point, but there are also several Uber benefits over car ownership. For example, being able to travel when tired/inebriated. Also, not being late if you have an engine issue or get a flat tire. This article tries to enumerate the financial differences, the subjective ones are also very important.
- MisterBastahrd 12y ago
  The fun thing about that is that you can use Uber in those circumstances, and still have the freedom to jump in your car and drive off whenever you want to instead of living by someone else's schedule. His argument is just plain bad.
  - prostoalex 12y ago
    It's not an argument for or against, it's the argument of cost - "freedom to jump in your car and drive off whenever you want to" is worth more to you than others. There are people that take a road trip on any given weekend, and there are those who only travel out of their county when work necessitates it.
- VLM 12y ago
  "Also, not being late if you have an engine issue or get a flat tire." How does uber prevent that? I suppose with a fleet of cars, another could pick you up, but you're still going to be late (just not as late) (edited to add, and on the frontend, I can guarantee that about 45 seconds after leaving the door at work, I'll be starting my car and moving out of the lot, how does uber guarantee that a car will be ready to leave for work within say 15 minutes, so I'd have to burn much more total commute time to make sure theres a realistic chance I won't be late. TLDR is the std deviation of a rental is going to be very large compared to an owned car.)

notastartup 12y ago

This brings total costs to $18,115 per year ($1509 per month) if you used UberX to drive everywhere. Unfortunately, even without car payments and depreciation, fuel costs, interest, insurance, maintenance and repairs, registration and taxes, parking fees, speeding tickets and opportunity costs, Uber is still slightly more expensive for the average American who drives 13,476 miles per year. In this case, it would be cheaper to own and drive the medium-sized sedan.

usaar333 12y ago

Having done these calculations a while back, I was seriously thrown off by this claim: > However, Americans who drive less than 9,481 miles in a year should seriously consider ditching their car, because UberX will be cheaper. Well, maybe. I drive 5k miles a year and determined that it would be more expensive to shift to either UberX or Zipcar. Let's see what is up with the math: > Costs of ownership The largest error is here, where the author uses a constant number regardless of miles driven -- and then compares it to variable w/ miles UberX costs!. But maintenance, insurance, depreciation, and fuel costs are all costs that increase with miles driven. Secondly, all these costs are taken from AAA numbers that are looking at 5 year depreciation of a new car. If you drive an older vehicle, your costs are nowhere near this high. (if they are to be believed, my cars' annual depreciation would be 80% of the value of my car!) > Parking costs at $1300/year First off, the claim on ABC is "average American family", not "average American" (http://abcnews.go.com/WNT/video/average-american-spends-1300-year-parking-21216093 http://abcnews.go.com/WNT/video/average-american-spends-1300...), so this is likely off by a factor of nearly 2. Secondly, this is massively skewed by location. In dense locations (say SF), this can shoot into $2000+ a year, but in lower density places (say San Jose area), this may be well under $200. Finally, workplace parking can be paid by pre-tax dollars which lowers this cost by another 30% or so. > Opportunity costs Where is the assumption that car driving is at 0% productivity and UberX riding is at 50% productivity coming from? (I definitely don't believe this empirically) Also note this is ignoring any opportunity cost of having to wait for an UberX to arrive. The real opportunity cost difference may be insignificant. My own conclusion: A single article won't allow anyone to make a determiniation. UberX may win in some cases over owning a car, but it is highly dependent on individual behavior.

refurb 12y ago
The only way i can see the average American paying $1300 per year or $100/month is if they are including the added cost of have a parking space at home. Remember, $1300 is the average. Most Americans pay nothing for parking except for a few $10-20 parking fees when going to a big city. I'm guessing the assumption is that if you rent a place for $1500 per month and it has a parking space, $100 of that is the cost of the parking space. Technically correct, but an odd way to look at it.

RealGeek 12y ago

The cost of car ownership in this article is inflated by almost 200%. It accounts payments / depreciation + interest + registration as $5,561 yearly for a mid sized sedan. I've leased two mid-size sedans for $200/mo and $300/mo including interest, all taxes, dmv / title / registration fees. So, I am paying $2,400 / year for one car, and $3,600 /year for another, compared to $5,561 represented in the article.

pacaro 12y ago

None of this is relevant if you have a child or dog. I know that Uber are starting to make provisions for children but there's a long way to go. But try getting a 140lb dog to the vet without your own car...

thrownaway2424 12y ago
Why do people insist on bringing up things like this that are totally irrelevant to the common case? Only half of American households own dogs and 140lbs is a 99.9th-percentile dog body weight so this little issue of yours is relevant to at most one of every 2000 households. You also can't haul an alpaca in uber, since we're enumerating corner cases.
- pacaro 12y ago
  Hahahaha, true I have a ridiculous dog, but the classic family pet (I'm thinking lab, retriever, pit, etc.) is easily in the 40-90 lb range. I have no idea what taxi or Uber policies are for this situation, I know that they turn a blind eye to dogs small enough to be held on your lap. To literally replace the family car all these cases need to be covered, not just the convenient single urbanite cases
  - thrownaway2424 12y ago
    To make a huge positive benefit in our transportation system and built environment we need only take 10% of cars off the road, so I think they won't come to take away your family car just yet. Certainly there are many excellent reasons to own one. But on the other hand the impossibility of car-free and car-light lifestyles are overstated.
eurleif 12y ago
Uber leaves whether to allow pets up to the individual driver[0], and suggests calling the driver after ordering the ride. I imagine if you ordered an SUV (uberXL), it would very likely be fine. [0]https://support.uber.com/hc/en-us/articles/201955127-Can-I-ride-with-pets- https://support.uber.com/hc/en-us/articles/201955127-Can-I-r...

deleted 12y ago

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cpprototypes 12y ago

For Los Angeles, UberX, Lyft, and others have the potential to solve the "last mile" issue of public transit. Especially with newer carpool features like UberPool and Lyft Line. LA is currently investing a lot into building more light rail infrastructure. However, regardless of how much LA invests in rail, for most commuters the rail will only get them most of the way to their workplace. Before UberX and Lyft, the only options for the last leg of the trip were bicycle (which has a lot of limits), bus (too unreliable), and taxi (too expensive). UberX and Lyft provide an option that didn't exist before. And it's cheap and reliable enough to a be a very good option. As LA continues to build more rail, I think it has the potential to greatly change commuting in the future. Maybe it will become common for young single people to not own a car and rely on Uber/Lyft combined with rail. And then when they get married and have kids, then buying one car makes sense. The result would also greatly reduce traffic and air pollution.

jusben1369 12y ago
Great points! I actually fear that investment in light rail is going to look misplaced in just 10 years when automated electric cars operated by private companies like Uber and Lyft and whomever are going to scoot multiple people between two common points.
- wj 12y ago
  Potentially. But LA has millions of daily commuters. Automated electric cars will still clog up the freeways (thought hopefully less so due to less accidents, etc.) but the light rail should hopefully move more people quickly for 80% of their trips with Uber and Lyft providing the last mile. I personally think they should stop construction on the subway to the sea and roll our light rail across the city.
  - jusben1369 12y ago
    I hear what you're saying. But what is light rail but several electric cars daisy chained? If you can put 4 people in one (a la car pooling) and give them a dedicated HOV lane between places.......

jusben1369 12y ago

This is great work! Most comments here are always going to go negative on the data he collects. "This is not true! I own a 1981 VW diesel with 220,000 miles on it and the only thing I've had to fix...." Avoiding those ratholes for a moment I want to look at the other side. The Uber economics. Uber's pricing is based on the assumption that you're not using Uber as your full time car replacement. Put another way, I'm waiting for the Uber monthly subscription that gives me up to X miles per month for Y cost. If I commit to that many miles I'm pretty sure that can drive down the cost per mile in a meaningful way....say 20 - 30% vs the current "pay as you go on demand model" Lastly I think the first logical place to look is the 2 car family. You can shelve one and still have your own car for long family vacation trips or other immediate requirements while using Uber for that person that's got a pretty predictable 5 day a week commute etc.

afafsd 12y ago
>This is great work! Most comments here are always going to go negative on the data he collects That's because the "data" is crap. He's picked numbers to get an unreasonably high idea of the cost of owning a car, then used rosy assumptions to show that Uber is cheaper. Change the input and you change the conclusions, so I'm not going to give the guy a pat on the head just for effort.

wj 12y ago

Every article about Uber, Lyft, and electric vehicles ends up with the majority of the comments saying something along the lines of, "This is stupid because it doesn't fit my situation." For what is usually such an open-minded group of individuals it seems as if personal transportation is the topic where that open-mindedness doesn't extend. (Though that might be true for the population as a whole--gas prices is a legitimate political issue.)

sokoloff 12y ago
Opining about the negative convenience aspects of relying on a car service is hardly being closed-minded, IMO. There are very legitimate hurdles to Über et al displacing private cars. Talking about those hurdles (aside from the joking alpaca one) is normal, not evidence of closed-mindedness.

ilaksh 12y ago

Lyft is actually a little cheaper isn't it? So how does that affect the calculation?

contingencies 12y ago

I lived in LA for a year and don't even have a license. I bought a road bike and cycled to and from work, though if drinking was (frequently) involved I'd throw my bike in the back of a cab. Assuming the average fare was around $60, and I used a cab five times per week, that was $300/week. I was considering buying a motorbike to evade this rising fee when our company was bought by HTC, the company reshuffled, by job disappeared, and I was suddenly placed in to a US visa expiry grace period where I had 10 days to get out of the country or face being an illegal immigrant (despite many people wanting to employ me, I had to leave and return to comply with their visa rules). I opted out (once bitten, twice shy re: visas), and was very glad that I only had to sell my road bike at a loss... rather than a car.

rdl 12y ago

I will probably remain a holdout for personal vehicle ownership even if the economics don't work out, but I think in my case they don't, anyway. 2006 Audi A4, paid off (worth about $12k as it sits), with 126k miles. $300/yr reg, $600/yr comprehensive/collision/liability insurance. I spent about $600 every 2 years on tires (so, $300/yr), $500-1000/yr on maintenance otherwise, and drive about 20k miles/yr. Free parking at home; $260/mo parking in SF, and $4-6 bridge tolls about 20 times a month. I get about 22mpg with premium gas, so $4.20/gal or so in California. I think my costs are around $0.40/mi. In any case, less than $0.57/mi, so it's "free" when reimbursed. Plus I actually like driving. Being able to go from home to office in 17 minutes off-peak, or ~30 minutes 98th percentile traffic, vs. 50+ miles via transit, and not having to be around SF people for 2h/day: worth every penny. (Also, having earthquake, colo-emergency, etc. stuff stashed in the trunk all the time, and a huge battery and generator for laptop, cell, etc.)

mathgladiator 12y ago

This is a great start. I would love to see a calculator similar to NY times mortgage calculator.

chrismcb 12y ago

The math in this article is awful. Constant cost despite varying the miles driven. Making money out of thin air. Yes you can talk about intangibles, such as the ability to do work while not driving. You can even give that a monetary value to do comparisons. But I'm not going to make more money by working while not driving, so don't add this opportunity cost to the cost of the car. Or maybe you should add up the opportunity cost of waiting for the uber car. You also can't just ignore surge pricing. Not everyone needs to own a car. But there are a lot of advantages, some that are hard to put a dollar figure on.

chrismcb 12y ago

taksintik 12y ago

Self driving car = best of both worlds

stevenhubertron 12y ago

The calculations also aren't factoring in resell. Sure I might buy a car for $25,000, but when I sell it I am going to get at least $10,000 back out of it so the car itself only costs $15,00. If you combine that with buying used, better gas milages in cars and piece of mind the calculation becomes harder. Especially if your in an urban city with multiple transportation options.

lucberlin 12y ago

Who drives less than 5k miles/year? And if you do, public transportation is probably excellent?