Average ride-hailing customer pays 2-3 times the annual cost of vehicle ownership
BOISE – (August 21, 2018) – Ride-hailing services can come in handy in certain situations, but don’t plan on making the full-time switch from driver to permanent passenger just yet – the average ride-hailing customer would need to pay two to three times more than a vehicle owner to meet their annual transportation needs, according to new research by AAA.
“With ride-hailing, you can definitely rack up some short-term wins. On a recent trip to Seattle, I saved $34 by arranging two rides instead of paying to park a vehicle at the venue,” says Matthew Conde, public affairs director for AAA Idaho. “But the way prices are today, if you paid to have a driver take you everywhere, it’s going to add up in a hurry.”
As part of its latest research, AAA compared the cost of replacing a personal vehicle with ride-hailing services in 20 major U.S. cities. Using a medium-size sedan as a benchmark, and assuming an average of 10,841 miles of driving and 11 days of road trips that would require the use of a rental car, AAA found that ride-hailing customers would pay $20,118 per year, or $1.86 per mile. By comparison, a sedan owner spends just $10,049 on average (or $0.93 per mile), including fuel, insurance, parking, and the vehicle itself. If parking isn’t an issue, the cost drops to $7,321.
Flat-rate parking varies dramatically among cities, ranging from just over $700 a year in Phoenix to more than $8,000 in New York and resulting in an average cost of $2,728 for the selected locations.
“The surprising thing about AAA’s research is that for the average American, owning a brand new vehicle, including the insurance and other costs that come with it, is actually cheaper than depending solely on ride-hailing services like Lyft and Uber,” Conde said. “These services are a good supplement to vehicle ownership, but they’re especially helpful for people who drive less than 3,000 miles a year or who wouldn’t be able to drive based on other limitations.”
Ways for car owners to save
There are plenty of ways to cut costs, but for most people, giving up on vehicle ownership isn’t one of them:
- Buy (gently) used. By driving a pre-owned vehicle, you can avoid costly depreciation while keeping ownership costs down.
- Don’t be fuelish. If you spend more buying premium gasoline that your vehicle doesn’t need, you’re wasting money. Instead, opt for a TOP TIER gasoline that contains detergents and other additives that help improve vehicle performance.
- Keep up on routine maintenance. A regular maintenance schedule can catch small issues before they lead to major repairs. Also, consider switching to synthetic oil, which does a better job of protecting vital engine components.
- Slow down. By reducing speed, you can save gas and stretch your budget.
For its recent study, AAA selected a medium-size sedan for comparison, as that vehicle type is the most likely to be used for economy-level ride-hailing services. Ride-hailing data from nearly 250,000 trips was analyzed and compared with data from AAA’s annual Your Driving Costs study. Overall, AAA conducted research to establish average miles traveled, driving costs, parking costs, ride-hailing costs (including miles traveled and cost per trip), average road trip distances, and average rental car costs.
“Someday, ride-hailing costs may drop to the point where it makes good financial sense to hang up the keys and let someone else do all of the driving,” Conde said. “But for now, vehicle ownership is still king.”