PORTLAND, Ore., – Ride-hailing services are a popular and convenient transportation option, but a new AAA analysis shows they are not a cost-effective replacement for vehicle ownership. According to the AAA Foundation for Traffic Safety, the average driver in an urban area drives 10,841 miles per year. Relying on ride-hailing services as a primary mode of transportation would cost $20,118 annually. This is more than twice the cost of owning a personal vehicle, even when factoring in the expense of fuel, insurance, parking and the vehicle itself.
“Ride-hailing services like Uber and Lyft are a convenient transportation option. And they can work well for those who travel a limited number of miles every year,” says Marie Dodds, public affairs director for AAA Oregon/Idaho. “However, considering that the average American city-dweller drives nearly 11,000 miles annually, a personal vehicle is still the more cost-effective choice.”
For those who travel less than 3,000 miles per year, ride-hailing may make economic sense. AAA recommends that you look at all the options to determine the plan that best suits your personal needs and budget.
Find more details in the study’s fact sheet.
For the study, AAA analyzed the costs of ride-hailing services (including the use of an occasional rental car) in 20 major urban areas. Dallas had the cheapest yearly cost of $16,944 while Boston was the most expensive at $27,545.
According to data from AAA’s annual Your Driving Costs study, the average annual cost to own and operate a new vehicle, the costliest form of vehicle ownership, is $7,321 for 10,841 miles of travel annually.
Understanding that parking costs can be a major ownership expense for those living in urban areas, AAA also analyzed the costs of flat-rate parking per year, which ranges from $706 (Phoenix) to $8,088 (New York), with an average cost of $2,728. For those with access to free parking, relying on ride-hailing services is nearly three times more expensive than vehicle ownership in these cities.
AAA has these tips for vehicle owners who want to minimize their operating costs:
Buy (gently) used – Depreciation is the single largest expense for vehicle owners. By driving a pre-owned vehicle in good condition, ownership costs are significantly lower. A safe, reliable vehicle can be found at an attractive price point.
Fuel responsibly – Avoid wasting money on premium gasoline unless your vehicle specifically requires it and, if you’re one of the 20 percent of Americans considering an electric car, these vehicles offer lower fuel and maintenance costs.
Show your car some love – It sounds counterintuitive, but spending money on routine maintenance can actually save you money in the end. To keep engines running longer, consider switching to synthetic oil and upgrading to TOP TIER™ gasoline.
Slow down – Small changes in the way you drive can improve your fuel efficiency and help you save money at the pumps.
About the study: To determine the average number of miles traveled by a city-dweller, AAA’s analysis leveraged data from the AAA Foundation for Traffic Safety’s American Driving Survey. AAA’s Your Driving Costs data served as the basis for all car ownership calculations, factoring in depreciation, fuel, maintenance, repair, financing, insurance, license, registration costs and taxes. Total cost of ride-hailing is based on data from 243,838 economy-level, single rider trips in 20 U.S. urban areas and does not factor in costs associated with carpooling or multimodal transportation options. On average, those using ride-hailing services spent an average of $13.15 per trip, spending 15.11 minutes and traveling 6.66 miles. Ride-hailing costs include the occasional use of rental vehicles for longer distance travel. Full methodology can be found in the study’s fact sheet.