Costs

Toyota Guy

Active Member
I see many posts on Facebook and the Uberpeople page with screenshots of how much somebody made in a week or a night. I’m always impressed by these, but I wonder about the rest of the story.


Income is only half the story. Costs are every bit as important. I’ve been driving part-time now for two months and I believe that I have a reasonable understanding of what’s involved. This is about what happens over time, not about making that big car payment next week.


First of all, if you’re doing this part-time, you already have a car. You didn’t go out to buy one just to work part time as a rideshare driver. That means that you’re already paying for licensing, inspections, insurance, etc. When you figure the costs of driving part time, you only count the extra money you spend.


If you pay additional insurance, add that to your costs. Otherwise, the only extra costs you incur are for the gas necessary to drive, depreciation due to the miles you put on the car, and additional maintenance necessary with the extra miles driven. Cost/mile is crux.


Here’s an example from my experience. I’ve made several assumptions which may or may not prove accurate. I drive a 2009 Pontiac Vibe (a rebadged Toyota Matrix) with the 2.4 L engine.


Gas mile averages 26 mpg doing rideshare. At $2.40/gallon, cost/mile is $.09/mile.


Maintenance costs are a little tougher to figure out, but they are predictable. An Oil Change and Tire Rotation every 5,000 miles runs $50.00, $.01/mi. Tires cost $500 every 50,000 miles, another $.01/mile. Major service every 30,000 adds $250, roughly .01/miles. Repair costs on a Toyota are comparatively low. For the next 100,000 miles (I have 105,000 now), I anticipate .03/mile. So total maintenance and repair-- .06/mile.



That leaves depreciation and how well we can predict the future. KBB.com puts the “Private Party Sale” value for my car at $6000. I plan to drive it for 3 more years and put 75,000 miles on it in the meantime. Assuming no value after three years puts depreciation at $6000/75,000 miles, or .08/mile.


So the total additional cost to me of driving rideshare amounts to:

Depreciation: .08/mile

Gas: .09/mile

Maintenance and Repair .06/mile


Total per mile cost .23/mile
 

gofry

Well-Known Member
What's your point? That real costs are lower than the $.56 a mile that the IRS allows you to list as expenses?
 

Toyota Guy

Active Member
  • Thread Starter Thread Starter
  • #3
The point: If it's costing you only .25/mile to run, you make twice as much money as the guy who's spending .50/mile, and you get a tax break to boot.
 

LAuberX

Well-Known Member
Moderator
add a few fender benders... a windshield, insurance, registration, required license or permits for your city.

I came up with .29 per mile for my Camry, newer than your Vibe, depreciation was higher.

driving one dead mile for every paid mile means you NET very little doing Uber, glad you see the actual costs involved
 

Fauxknight

Well-Known Member
Last I checked my PriusC was running about $.17/mile. Gas prices are up a little bit, but at over 50mpg that doesn't affect me as much as most other drivers. Yes, I'm including depreciation, oil changes and other maintenance, tires, tire repairs (nails), tire rotations (free), insurance, gas, as well as other small things like wipers, filters, and light bulbs.


Maintenance costs are a little tougher to figure out, but they are predictable. An Oil Change and Tire Rotation every 5,000 miles runs $50.00, $.01/mi. Tires cost $500 every 50,000 miles, another $.01/mile. Major service every 30,000 adds $250, roughly .01/miles. Repair costs on a Toyota are comparatively low. For the next 100,000 miles (I have 105,000 now), I anticipate .03/mile. So total maintenance and repair-- .06/mile.
You oil changes are too expensive, almost at synthetic costs but you're going every 5k (I'm guessing full synthetic would be 7.5k inervals on a Vibe). Your tires should come with free rotations to help reduce your oil change costs, not to mention your tires should be cheaper.

I bought my last set of tires for around $560 for the full set. I got $150 in gift certs as part of a promo, and they were to places I needed gift certs for. The tires come with free lifetime rotation and are rated for 85k miles. So ($560-$150)/85,000 = $.0048, or less than half a cent per mile for the full set. Not to mention the free tire rotations every 5k, which at about $20 per rotation is an extra $320 in value which helps lower maintenance costs.

I have around 60k miles on those tires and they're still showing decent tread, so yes they really are going to last near 85k.
 

ubersour

New Member
I agree with you. Everyone focuses on how much they are making, but not the costs. One cost you did not include is
What's your point? That real costs are lower than the $.56 a mile that the IRS allows you to list as expenses?
Considering $.56 is not a direct dollar for dollar, since it is part of tax deduction not a direct cost/earning, the $.56/mile deduction claim is not accurate either; moreover, that occurs once a year during tax time.
 

ubersour

New Member
Toyota Guy, you are correct. Folks tend to focus almost entirely on how much they made, but don't include costs. Focusing on how much you earn is the shiny object syndrome Uber wants drivers to focus on rather than net earnings after actual costs. Plus, people tend to only post how much they made without including how many hours driven, how many miles driven, etc.
 

Fauxknight

Well-Known Member
Considering $.56 is not a direct dollar for dollar, since it is part of tax deduction not a direct cost/earning, the $.56/mile deduction claim is not accurate either; moreover, that occurs once a year during tax time.
Actually we expense our mileage rather than use them as a deduction. Expenses are applied to our gross income to determine our base taxable net income. Deductions are applied to that net income to reduce how much of it you pay taxes on. Both methods reduce your taxes paid by the same amount but expenses look bad when you try and get a loan (you show lower income), deductions do not.

This year mileage is $.54/mile. If you pay approximately 30% of what you make towards taxes then the mileage expense saves you $.54×30% or $.162/mile in taxes paid. The closer your actual costs are to that number the less you lose per mile driven...and if you can get under that number then you actually save money on extra dead miles.

Of course tax rates vary dramatically based on where you live and your net income, so that numbet can go up or down depending on your situation.
 
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