Many have predicted that ridesharing platforms, such as Uber and Lyft, might in the near future come to replace the private vehicle as the primary mode of personal transportation. One of the main arguments used to back these claims are the expenses users could avoid by ditching their car. Without parking, fuel, insurance and maintenance, a city-dweller, they argue, need only rely on their ridesharing service of choice for the occasional trip to the grocery store, airport or office. A more careful analysis, such as the study just released from Cincinnati’s Swapalease.com, tells us that in fact, consumers who rely on ridesharing service pay nearly twice as much annually as those who lease a vehicle.
The Swapalease.com study compared the costs of leasing vs. ridesharing based on average distances traveled and costs in major U.S. cities, where the wide availability of drivers make relying exclusively on ridesharing a realistic possibility. With an average annual mileage of 10,000 miles traveled, an average fuel economy of 25 mpg and an average fuel cost of $3.00 per gallon, the average cost of leasing a vehicle—inclusive of insurance, parking and maintenance—came to $5,880 annually. This contrasted to over $11,000 annually for someone who used ridesharing exclusively, based on an average of 17 trips per week, plus the occasional rental car.
The data from this study echoes AAA’s findings from last year that found that relying exclusively on ridesharing was even more expensive than owning a new vehicle in 20 major urban markets. For those who attended our Spring Voice of the Dealer Luncheon, you may remember Peter Welch exploring this topic in his presentation. In addition to the savings of private vehicle ownership, Peter shared the findings of a series of focus groups NADA conducted on the topics.
Unsurprisingly, when asked if they would rather keep their personal vehicle or rely exclusively on ridesharing for personal transportation, an overwhelming 89% (including 81% of millennials) preferred to keep a personal car. 93% reported that a personal vehicle provided freedom. In addition, most participants valued their time even over any potential savings associated with ridesharing. This was another mark against ridesharing, which entails an average wait time of 6 minutes per trip, adding up to thousands of hours a year. One participant’s quote summarized the general attitude succinctly: “Why would I want to give up my car when I could just keep my car AND rideshare?”
Nonetheless, Peter pointed to efforts either underway or openly discussed to undermine private vehicle ownership. This ranged from reducing public parking in urban centers, to increasing taxes on gas and vehicles, to requiring either special permits for private ownership or outright banning it altogether. While these proposals currently remain hugely unpopular, (65.1% opposed efforts to prohibit private vehicles in city centers, 67% opposed reducing parking spots) Peter reminded us of the necessity to remain watchful and advocate forcefully against such efforts where they attempted.
It is heartening to see that the Swapalease.com study confirms the AAA findings of last year to show that private vehicles, whether owned or leased, are both less expensive than relying exclusively on ridesharing services.
This article was originally published in GCADA’s weekly newsletter, Wednesday Weekly on July 17, 2019.