In the past two years, Uber has been cutting the fat on their UberX service to focus on their price point alone. Factoring in
AAA's 2014 Driving Cost Study, we compare the cost to own, upkeep, insure and fuel a sedan car, along with its inevitable depreciation, to the cost of using Uber for all transportation needs as an average American. Keep in mind that more than three quarters (76%,
WSJ.com) of American workers commute alone to work in their car, and car loan payments were at an all-time high in 2014. Now, let's see if it's cheaper being a backseat driver than owning your own car on a yearly basis.
OWNING
![buying a car, young man buying car]()
CAR PAYMENT: Average Sedan Payment: $355/month + $976 Interest =
$5,236/year
According to
Business Insider, the average car payment includes $355 per month, along with $976 annually in interest, totaling average payments of $5,236 per year.
MILEAGE: Average Miles Driven Each Year: 16,550 miles for men, 10,142 miles for women, average =
13,476 (Source:
US Dept of Transportation)
Since the gap between men and women's driving is so large, we decided to take the average - 13,476 miles - for most of our calculations.
GAS: Average Cost of Gas/Gas Mileage: 13 cents/mile
Men (16,550 x .13 = 2,151.50), Women (10,142 x .13 = 1,318.46), Average (13,476 x .13 =
$1,751.88)
Using the cost of 13 cents per gallon in 2014, we conclude gas will annually cost an average of $1,752.
MAINTENANCE: Average Maintenance: 5 cents/mile
This includes oil changes, small repairs, tire rotation, replacing parts, fluids (washer, radiator, anti-freeze).
M (16,550 x .05 = 827.50) W (10,142 x .05 = 507.10) Average (13,476 x .05 =
$673.80)
The average cost of routine maintenance and labor is 5 cents per mile times the average mileage, which comes out to $674 per year.
TIRES: Average Cost of Tires: .97 cents/mile
M (16,550 x .0097 = 160.54) W (10,142 x .0097 = 98.38) Average (13,476 x .0097 =
$130.72)
Tires are bought every four to five years on average, based on an average 45k per set of tires. At the average rate of 13,476 miles, four years is right on schedule, and at .097 cents per mile, that breaks down to $131 per year for tires.
INSURANCE: Average Insurance Plan:
$1,023/yr
Plans vary based on how much you drive, driving record, where you live and the car you own, but the average insurance, according to AAA, is $1,023 per year.
TOTAL COST: $8,816 + Annual Depreciation (AAA estimated $8,876 in 11/2014)
Obviously our math is better so we'll be going with
$8,816 per year to own and operate a new sedan in an average city, driving as much as the average person. However, this does not include the price of other small operating costs, such as parking and registration fees, which we'll address below.
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UBERING (UberX)
![uber, calling an uber]()
Average Miles Each Year: Men = 16,550 miles, W = 10,142 miles, Average = 13,476 miles
UBER'S FARE: $1.70 base fare + .20/min +/or .90/mile (
Uber)
Average trips per week: 15
TOTAL AVERAGE COST TO RIDE: $17,095
Nerd Wallet estimated (based on 15 trips per week) in a average city (Chicago) = $17,095
It's
much more expensive to ride with Uber for a full year than owning if you drive as much as the average person. But, consider the following pros and cons of full-time Ubering.
Pros for Uber:
*Average Depreciation of Cars: $3,510/yr (cars depreciate 25% once driven off the lot)
*Liability in an Accident (for your car as well as another car if you're at fault)
*Cars have the potential for large repairs and complete breakdowns
*No tips necessary with Uber
*No operating costs (small ones, which add up to a lot): Parking spaces, parking tickets, traffic violations, traffic school, towing fees, smog checks, renewal fees, license plates, taxes and title.
Cons for Uber:
*Spontaneous travel and long road trips are less convenient and costly
*Anyone under the age of 18 must be accompanied by an adult (sorry soccer moms)
*Loss of freedom to go anywhere at anytime
Final Comparison of Owning vs. Ubering
Owning:
$8,816 (plus annual depreciation plus minor operating costs)
Ubering:
$17,095
VERDICT
NO, it is not cheaper to Uber than to own if you are the average driver in an average city.
With Uber, yes, all you have to pay is the fare, not a fee to insure, gas up or even clean up after yourself. You're not liable for accidents, repairs and the usual headaches of owning a car, and you may even get a free bottle of water. Also, certain cities have lower Uber rates (along with lower or no base fare) than others.
However, since this is all based in annual averages, you'd have to be traveling
way less than the average person to make it more beneficial to Uber. Sure, making big payments to own a vehicle you barely drive is ridiculous, and multiple studies have shown that if you drive less than 10,000 miles each year it becomes more affordable to Uber, but not many people do.
So, if you have kids, an average or longer commute to work, or you drive during work or live in an area without a lot of Uber access, owning a car makes
way more sense. But, for those who need to drive seldomly, work from home or live close to work, you could be Ubering your way into some savings. Then you can save up and buy something nice, you know, like a new car.
