Is UberX is a Better Way than Owning a Car?

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Uber CEO Travis Kalanick once hailed its on-demand transportation service as eventually replacing car ownership entirely. In fact, he believes one day all the Uber cars on the road may be driving themselves. Kyle Hill, in an article in Business Insider (Sep. 3, 2014), notes that the numbers already make this true for some people.

Kyle notes that two years ago, he sold his Lexus GS 300 and replaced it with a sleek single-speed Pure Fix commuter bike. When he’s not in the mood for a workout, he uses Uber. He suspected that owning a car was a huge and unnecessary financial liability and discovered that, it is a better way for some people.

Using numbers from AAA and a variety of other sources, he calculated that the average costs of owning a motor vehicle in the United States is around $12,744 per year ($1,062 per month). Consumer Reports estimated median annual car costs to be $9,100 (not accounting for opportunity cost) ,  with small cars and Priuses around $5,000 and luxury cars and SUV’s around $16,000. In addition there are traffic tickets, parking, etc.


To calculate the cost of using Uber, he made these assumptions:

  • Live in a city where it’s available.
  • Use the less expensive UberX
  • Use no other mode of transportation
  • User has flexibility in schedule to avoid surge pricing
  • User is achieving 50% of full working productivity during the ride
  • User is indifferent about 5-10 minute wait time for UberX vehicle

The actual cost, depends on a number of issues, most important of which is the distance driven per year.

  • 13,476 miles: Ownership is cheaper: $12,744 vs. UberX: $18,115
  • 9,481 miles: Equal: $12,744 vs. UberX: $12,744
  • 5,000 miles: Uber is cheaper $12,744 vs. UberX: $6,721

In sum, for Americans who drive less than 9,481 miles in a year UberX may be a Better Way to get around!