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.
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.
"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.)
> 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.
You can't guarantee that, since car problems to arise.
This is the same issue with bike share schemes. I don't have to worry about anyone stealing my bike, or if the bike gets a puncture or has issues, I pick another bike.
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.
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.
> 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.
Traditional car rental is for this usage case. Availability isn't quite instant but easy a day or so ahead. Uber doesn't need to cover this usage pattern since there's already an extensive market of supply. Sure, if you go every weekend you'd want to own your own car, but for infrequent such trips, regular car rental supplements an Uber-cetric lifestyle just fine.
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.
I looked into the AAA's "depreciation" and "interest" numbers, and it turns out the calculations are based on buying a car brand new with borrowed money, paying it off over the course of five years (at what must be a rather large interest rate given the average $900+ cost), and then selling it off the moment you're done paying it off.
So let's just say that we're comparing to a really dumb and expensive mode of car ownership.
Not to mention the fact that a few times (at least) per year, people are likely to use their cars for much more than just a local public transport replacement, but will want to drive across the country with the car loaded to the hilt with holiday gear of some description.
> More realistically, these commute times could easily be tripled in most cities
Parking is a significant cost for him, which is LA-specific, but still could be a significant burden.
> I'm pretty sure I'm going to keep this car unless it needs major mechanical repairs, and so far it hasn't.
Your repair cost is not zero, it's the cost of a major repair multiplied by the probability of it being required. Otherwise your model is not very predictive.
> Honestly, if your starting point is a Lexus, you're not really all that concerned with your transport costs to start with.
My Consumer Reports subscription expired, but from my recollection of going through the shopping process last year both Lexus an Mercedes rank very high on reliability and total cost of ownership ratings among sedans. So once again, whatever car you model against, TCO needs to be multiplied by reliability data from some third-party provider.
Yeah, I can see that. And hassle. If I lived in a sufficiently dense city with good public transit, I'd get rid of my car tomorrow. In my area, you can get reserved spots for ~$250/mo. L.A. seems to run ~$100/mo to $300/mo depending on area.
> Otherwise your model is not very predictive.
No, it's perfectly predictive. I have a threshold that I will not exceed in a single repair on my car or in more than n repairs over some period of time. Once that threshold is achieved, I get rid of the car and make it the dealer's problem. I know from lots of prior experience that I can always get rid of a car for cheaper than what it would cost to fix it.
For example, I know that I will never ever pay more than $500 to repair my car. Ever. For any reason whatsoever.
I also know that once my car costs that much in repairs over 12 months, I will get rid of the car. Period. $400 over three repairs over a year? I'll keep it. $500? New car and hopefully 12 more years of almost trouble free driving.
> Lexus an Mercedes rank
Last time I checked, Mercedes had terrible reliability w/r to CR ratings. Like most German cars they have all kinds of issues with the electrical system. It's just something the Germans don't seem to have ever licked. It might have changed, but decades of not caring about the problem has made me put them in the "do not ever buy" category. Some UK sites regularly list Mercs in "least reliable" lists next to long lists of Renaults and Peugeots.
Anecdotal, all my friends who buy Mercedes cars, never buy another one because of all the time it spends getting fixed. Somehow Mercedes earned a weird reputation for reliability that I've never seen play out.
Of course, the only cars I've seen people actively work to get rid of after buying them were Land Rovers and Jaguars.
Strangely, high end Hondas (Acura in the U.S.) have much lower reliability scores than low and medium level Hondas.
Fords are getting better, but American cars are basically garbage. Lists of cars to avoid are dominated by American cars (mostly Chevys), followed closely by German cars. Mini is usually on those lists.
I've never figured out why people who buy American cars are confused by all the repair time and money they have to put into their vehicles. It's not like this isn't known and reported in virtually every car reliability survey.
"Wow my used 2006 VW Jetta diesel spends all the time in the shop? I never would have guessed something something German engineering blah blah diesels are more reliable"
You could have guessed this by actually looking up car reliability ratings.
"I can't believe that the trim and fittings started to fall off my 2005 Chevy Tahoe right before the engine required $3000 in repairs!"
You could believe it if you'd managed to crack open a used car reliability guide, any used car reliability guide, before buying it.
It could be worse, at least the American market doesn't have to contend with French cars shudder.
Here's actually decent free site built on the glassdoor principle. You share your info to get access to all the cars they have sufficient data on.
Mercedes owner here. I bought a (well-)used E-class diesel when our first was born. In five years, it's needed oil changes, brakes, two glow plugs, and one window regulator. That's well under $700 in parts and all of the jobs were easily done by me at home. MB cars are designed to be serviceable over the long-run (all panels that need removing are held with reusable fasteners; none of those shitty plastic Christmas tree fasteners, etc) and parts and service information is made available to all US owners (through MB North America) and I assume MB Europe does the same there.
For a car we bought for $6500 with 179K miles and now has 214K miles (and is worth $2000+), that's pretty damned good, I'd say.
My next car is overwhelmingly likely to be another E-class diesel. This one will probably die from rust from salt usage in New England winters, not becoming mechsnically untenable.
Wife's well-used Honda CR-V has needed more work in the 3 years we've had it, but still beats the stuffing out of the AAA model of car ownership expense!
Wow, car costs per mile are extremely cheap in the United State, if $.30-.40/mile is typical. The government estimate in Finland is about $.90/mile, and almost nobody has it that cheap. If I recall correctly, I calculated my own costs at around $1/mile, and I drive a 14-year-old car which requires very little maintenance.
As of 2014, the allowable tax deduction for business reimbursements for personal vehicle usage is $.56 per mile, which is supposed to cover gas and wear and tear on your personal vehicle.
Finland: according to Numbeo [1] fuel runs around 1.66 Euro per liter. In the U.S. it's $.96 per liter (or .73 Euro).
I'm guessing there's probably some kind of auto tax in Finland which appears to be fairly expensive. I've heard it's ~20% of the current cost of the car per year, but I can't figure out the tax code from looking on-line. In the U.S. it's complicated, but in places that have a personal property tax, it's usually pretty low. I think the tax on my car is something like $250/year.
Wear and tear can cost a lot as well. I live in a pretty weather prone part of the U.S., but I'm guessing it's nothing like the typical Finnish winter.
There's "usage tax" which is something like $200 - $400 per year. If the car is a diesel, it's significantly higher (but diesel is taxed at a lower rate). Diesel cars are cheaper only if you drive a certain amount of kilometers per year.
There's also the 'car tax' you pay when you buy a new car, which is rather high. A $31k car in the United States is about $48k in Finland.
Winter does increase car ownership. Cars rust more, and you also need two sets of tires (and winter tires tend to wear out faster than summer tires).
That still makes car surprisingly expensive when compared to motorcycles. When I recently sold my 14 year old motorcycle (also in Finland), I calculated the TCO at 30 Euro cents per kilometer.
Of course, the fact that a lot of the driving had been in east Europe, Russia, etc. is a factor in fuel costs.
Then again, the motorcycles are generally usable only for 5-6 months of a year in Finland.
2002 Honda Civic Sedan, 0 miles when I bought it, still had the factory shipping plastic on it.
It's not a sweet ride, it's more like an automotive appliance. It's reasonably comfortable, I change the oil regularly and take it for all the scheduled maintenance and services. But I don't take particularly good care of it.
Everything is cheap with it, tires, gas, etc.
It's only broken down on me once, and my insurance covered the tow costs, the part was a $100 Oxygen sensor.
edit
I recommend taking a look at consumer reports, look at make models for cars you are interested in, look at the used car reliability history and pick the cheapest possible car with perfect or near perfect reliability over the last 5 years. Then buy a brand new version of that car unless it's the first year of an all new model year. If that's the case, you can usually buy the outgoing model at a discount and benefit from a few years of manufacturing know how.
I came from a family thought bought exclusively used cars (and still does) and in the time I've owned my 1 car I bought new, my parents have been through maybe 7 cars? A friend of mine who also buys used exclusively, but doesn't consult Consumer Reports has been through 11 cars.
I also went through a string of used cars until finally deciding to just buy new. You might get lucky with a used car, but you never know what's happened to those cars and most people end up getting rid of cars because the repair costs are getting too high.
Some folks seem to almost have a religion about buying used cars. The one relatively low mileage used car I bought as an adult ended up with a lot of maintenance bills for whatever reason. I also had really bad luck with a new Dodge but my other new car purchases have all provided a pretty good lifetime of service. One of my current cars is a 1997 Honda Del Sol and it's still going strong at 160,000 miles.
Yeah. I'm always surprised at how much hassle people are willing to put up with for their cars. I very much look at them as transportation appliances. I'm an ideal consumer for self-driving cars. There's really very little about driving that I actually enjoy, so I'm simply not very tempted to go out and buy a great driver's car or an expensive weekend track car or something.
People just have different tolerances for things I guess. I just have very little tolerance for times when my car goes bad and for wasting time at the dealership. There's other stuff I'd much rather be doing than going through the hassle of buying a car or getting one repaired. So I seek out the cheapest, most reliable car that offers a reasonable level of comfort I can find.
My parents apparently have made the equation work for them to go to a car dealership once a year or so and spend time having one of their cars in the shop every few months for this or that minor thing. All so they can save a few thousand dollars on the sticker price. Once I got out on my own and had to deal with that on my own, I couldn't make it work, so I don't mess around with it.
New doesn't necessarily mean "more reliable", but a make/model (of any sort) with a multi-year track history of ultra high reliability puts you statistically in the game to have a trouble free car.
I have a 1998 Honda Civic Sedan which other than an oil change and tuneup, has been running fine. More than once people have asked me if I was interested in selling it most likely due to how reliable these cars are.
You could buy a car for $2000 to $3000, drive it for 6 months and sell them for more. Or buy one for $4000 to $5000, drive it for 2 years then sell it for $3000 without a sweat.
These Uber-models are great, and I would love to Uber/Lyft/.... everywhere, but they are costly and I do not know what people mean when they say "average" driver in X city.
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.
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.)
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...), 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.
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.
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.
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"
"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-bu.... This is what a bona fide, well-known and family-friendly celebrity has to deal with in ordinary life.
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.
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?
"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.
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.
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/ 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/ 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.
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.
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.
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.
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.
That's your TOC at the end of 15 years of owning the car. What was it in 1999 at the start?
Personally, I wouldn't be excited about the fact that my car had fewer safety features. My friend used to extoll the virtues of owning a 94' Camry cost wise. All well and good until you get into a car accident. What do you value your own personal safety at? I put it way, way, higher than the cost difference between an old beater and a new highly rated car.
How about parking? In Dublin (Ireland) where I live, you're paying 50/month (600 a year) euro for parking at home, AND then paying your daily rate of 45-50 a week for city centre parking.
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.
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.
"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.
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.
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.
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)
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.
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.
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.
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.
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.......
Jesus, I guess, but compare the space efficiency of a rush hour train in an urban area to 4 people in an electric car. Not that I would want to sit in a car with 3 strangers, or my spouse and baby with 2...
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.
>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.
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.
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.
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.
That only work if can bill your employer for all the hours you work.
For example, it does not matter if I work more than 8 hours a day, I will be paid the same. So if I hire somebody to wash the dishes in the evening, it is costing me money. The value I get out of it is quality of life and is difficult to quantify.
Even for people running their own business on the side. Times and times again we see article on HN how IT guys can't really be more productive than a few hours a day. Also, to get back to my dish washing example - I ( and other on HN too ) noticed that that sort of repetitive work is a lot better for reflection. Replacing it with a 1 hour session playing games, working or other activities may actually be overall detrimental to your side business.
What is actually useful though is to use your hourly salary to evaluate the cost of the services you buy. Like why would I expect a professional with more than 10 years experience in his field, coming to my place in the evening to work for less than 10$ a hour ?
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.
This is a particularly bad example, because not only would I have to pay someone to mow my lawn for me, to get my light exercise I'd also have to pay to use someone else's treadmill to get my exercise. This is starting to get expensive and rapidly looking cheaper to just mow my own lawn.
"turning down work" - If I have 8 hrs of work per day and waste 2 hrs of time per day on the internet, I'd rather waste internet time on the couch at home, than try to sneak it in at work because I did some of my work elsewhere. If I work extra hard for free, my great-great-great-grand-boss might get a bigger bonus, but all I'll get is less free time in my life, absolutely nothing more.
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.
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.)
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.
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.)
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.
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.
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.
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.
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.
"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.
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.
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.
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.
I live in a bike-friendly city, and am an avid cyclist myself. I've learned that debates over the relative merits of different bike configurations are irreconcilable.
I don't get the single speed thing either. A gearing at which I can achieve 15-20mph on the flat with a comfortable cadence is such a trial to get up even moderate hills that if I couldn't change down I'd get off and walk.
Perhaps there's some macho fitness thing involved. Perhaps people find lots of gears intimidating or derailleurs unreliable, in which case there is the good old Sturmey Archer 3-speed hub gear.
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.
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
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...
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.
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.
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
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.
Children are the third rail for any simplistic concept of urban transportation. I suspect that in all but a few cities in the US, the dilemma for a family with kids is not Car versus Uber, but 2 cars versus 1.
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.
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.
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.