#### FXService

##### Well-Known Member

This is for you, newbies. Welcome to UP! I’m glad you have found us, and we have created a treasure trove of information for you! (Mods sorry in advance if this is posted in wrong forum) While you will find amazing strategies to increase your revenue, I’m here to remind you of that minus sign hanging out near your new and improved revenue stream. @@@@ that minus sign when it’s getting too close to your dollars, right? Well, too bad. It isn’t going anywhere. But you can find out just how big of a jerk King Minus is when it comes to your car. Your place of business. I've posted before how to calculate your expenses in this business. However, after going through my previous posts I can't find it. It's a combination of cost per mile (consumables) and cost per day (services, etc). I’ll explain below:

Basically, your consumables are things like tires, gas, brake pads, any maintenance really. This is calculated like this.

Your "services" are things like insurance, registration, car wash, etc. The formula I use for this is

Depreciation is a bit tricky because it's based on age + mileage. And even then, age is usually weighted over mileage. How much age trumps mileage in depreciation really depends on make/model/trim, etc.

So, take a

We have depreciation over

Also, the reason why I posted depreciation separate is because of those guys using vehicle model years 3 years old or newer and trading it in. You will most likely find that when you do go to trade in on a vehicle 3 years old or newer that your depreciation using this formula is understated due to depreciation being more the newer the vehicle. Blue Book guides will corroborate this to a degree. This math isn’t exact as depreciation itself is a fluid value just like gas and can change daily depending on the market.

Whew, that’s a lot of math! So, what does this mean for you and your rideshare/livery business? It means it’s number crunching time. Now we are going to figure out how to put all these numbers together and find out just how much our business costs over varying lengths of time. Logging this data will greatly help you discover trends, make informed decisions, and give you better control over your business. If you have a basic understanding of Excel, you could even make a spreadsheet to help you track this and let you create year over year, month over month, trends. One of our more successful drivers/fellow forum members in the Phoenix market, Jdemonto , does this and uses this data to vastly improve his revenue and lower costs. Onto the math. CHARGE!

Depreciation: $0.113

Gas: $0.058 (using $2.85/gal as national average)

Oil changes: $0.004 (@ $40/10,000)

Tire rotation: $0.004

Alignment: $0.004 (assumed $70 for wheel alignment. Usually FWD cars in this business need them about every 15-25k, I estimated 20k)

Air Filters: $0.001 (combined cost of $25 for both engine and cabin at 20k miles. Please don’t tell me you’re paying someone to do this for you. If you own a screwdriver you can replace an air filter on ANY CAR)

Tires: $0.008 (

Spark plugs: $0.001 ($131/120k mi)

Coolant flush: $0.004 (at $188.50 every 50k)

Insurance: $10 ($3650/yr for math simplicity)

Registration: $1 ($365/yr)

Car Wash Pass: $0.99 ($30month x 12/365)

Market specific fees, licenses, etc: $x.xx

Ok, now let’s start putting this together and working with it. First, we are going to determine how much your expenses are just for today.

So it’s the beginning of your day, you’re just waking up, getting coffee, etc, checking your trips from last night, nope still no tips but they did leave a 5 star and thank you for the 3 waters they drank, checking out the surge maps, and oh you haven’t even turned on your car yet, but it doesn’t matter, you have still spent

Now calculate net revenue:

Now to get a realistic picture of your earnings add up all your miles driven that day and multiply by your figure from adding your

Now, we’re going to calculate a week (most of you should have this figured out by now, but just in case you don’t, here it is.)

MONDAY: $178.63

TUESDAY: -$11.99 (Look at who’s being lazy and taking a day off and sitting on their couch all day)

WEDNESDAY: $164.79

THURSDAY: $162.48

FRIDAY: $298.36

SATURDAY: $301.23

SUNDAY: $145.07

**These figures are not meant to be used as a factual example of real world earnings. Just merely a simulation to explain the math.

Your net will vary depending on number of loaded miles versus unloaded miles. I hope this helps. Just because you don’t physically swipe your card or pay cash does not men you are not spending money. The purpose of this post was to help you understand your expenses which go far behind just gas and coffee. I know this post is long, but I really hope some of you new guys use it to make the most of your business and wish you all the best of luck.

~FXService

Optional number cruncher soundtrack:

**Consumables:**Basically, your consumables are things like tires, gas, brake pads, any maintenance really. This is calculated like this.

**Cost/miles**. So, gas would be**$2.50/25mpg= $0.10 /mi**, oil change,**$30. /5000=$0.006 /mi.**(I always use 1/10 of a cent because you start adding up tires, brakes, spark plugs, struts, rotations, fluid changes, depreciation, many of these will be closer to**.5**to**1**cent/ mile but they do add up over a 100k miles. So even neglecting a**$0.01 per mile over a period 100k miles means $1,000**.) My tires were $**675**when I replaced with 80k mile Michelins, I can realistically expect about 70k.**$675/70,000=$0.01 per mile.****Services:**Your "services" are things like insurance, registration, car wash, etc. The formula I use for this is

**Cost per year/365=daily cost.**I prefer breaking it down into a daily cost because it's a very convenient unit to work. easy to determine a week (**x7**), month (**x 28 to 31**), etc. This is often an overlooked or misunderstood cost, especially for Part-timers. because for you guys, the formula is**daily cost x N%.**(If anyone needs help with this let me know). Also, a lot of people say insurance, registration, etc aren't legitimate to consider expenses since you must pay them anyway. That's**Bullshit**, especially if you have a commercial or RS policy/endorsement. Do you think the brick and mortar store doesn't consider their cost of insurance a legitimate expense just because it must be there anyway? I'd also like point out that ALL these expenses are the true cost of owning a car in general, it's just as transportation providers we burn through this A LOT quicker than most people and which is we need to be aware of it.**Depreciation:**Depreciation is a bit tricky because it's based on age + mileage. And even then, age is usually weighted over mileage. How much age trumps mileage in depreciation really depends on make/model/trim, etc.

*I could write**an entire thread dedicated to depreciation only.*However, for the sake of this post we will be using the Edmunds 5-year/ 15k mi/yr cost to own and look at the total depreciation and converting that into a**consumable**. This keeps it simple. Now, we divide by 75,000 (15k x 5).So, take a

**2012 Prius**:We have depreciation over

**5 years, $8,446/75,000=0.113/mi**. Depreciation is ALWAYS hardest the first year but after that goes on a slow decline. Also concerning depreciation, for you guys driving 5-year-old or older beater for X and XL, you can even not factor in depreciation as the car will have been so depreciated already (to a resale value of 1,500-3,000) that honestly scrapping the vehicle would be as much if not more than you could make in a resale.Also, the reason why I posted depreciation separate is because of those guys using vehicle model years 3 years old or newer and trading it in. You will most likely find that when you do go to trade in on a vehicle 3 years old or newer that your depreciation using this formula is understated due to depreciation being more the newer the vehicle. Blue Book guides will corroborate this to a degree. This math isn’t exact as depreciation itself is a fluid value just like gas and can change daily depending on the market.

Whew, that’s a lot of math! So, what does this mean for you and your rideshare/livery business? It means it’s number crunching time. Now we are going to figure out how to put all these numbers together and find out just how much our business costs over varying lengths of time. Logging this data will greatly help you discover trends, make informed decisions, and give you better control over your business. If you have a basic understanding of Excel, you could even make a spreadsheet to help you track this and let you create year over year, month over month, trends. One of our more successful drivers/fellow forum members in the Phoenix market, Jdemonto , does this and uses this data to vastly improve his revenue and lower costs. Onto the math. CHARGE!

**2012 Prius*****Consumables (**__not 100% inclusive__and calculated using 2012 Prius service schedule, link: https://www.driverside.com/service-schedule/complete/toyota-prius-2012-30842-53634-133862 ):Depreciation: $0.113

Gas: $0.058 (using $2.85/gal as national average)

Oil changes: $0.004 (@ $40/10,000)

Tire rotation: $0.004

Alignment: $0.004 (assumed $70 for wheel alignment. Usually FWD cars in this business need them about every 15-25k, I estimated 20k)

Air Filters: $0.001 (combined cost of $25 for both engine and cabin at 20k miles. Please don’t tell me you’re paying someone to do this for you. If you own a screwdriver you can replace an air filter on ANY CAR)

Tires: $0.008 (

**MICHELIN**DEFENDER T + H**195 /65 R15**at $523 from Discount Tire and assuming 70k useful tread out of 80k manufacturer, these are also damn good tires and you can usually catch them on sale at Costco)Spark plugs: $0.001 ($131/120k mi)

Coolant flush: $0.004 (at $188.50 every 50k)

**Total: $0.197/mile****Services:**Insurance: $10 ($3650/yr for math simplicity)

Registration: $1 ($365/yr)

Car Wash Pass: $0.99 ($30month x 12/365)

Market specific fees, licenses, etc: $x.xx

**Total: $11.99/day**Ok, now let’s start putting this together and working with it. First, we are going to determine how much your expenses are just for today.

So it’s the beginning of your day, you’re just waking up, getting coffee, etc, checking your trips from last night, nope still no tips but they did leave a 5 star and thank you for the 3 waters they drank, checking out the surge maps, and oh you haven’t even turned on your car yet, but it doesn’t matter, you have still spent

**$11.99**today running your rideshare business. So, you sit on the couch, reading UP, and you get your first ping! WOO HOO! You drive, 3 miles 10 minutes’ drive to pick them up, take them 20 miles/25 minutes to the airport and you get a rematch, another ¾ miles and 5 minutes unpaid circling the airport and you pick up pax, and take them 15 miles in about 20 minutes. Now at this moment you have driven 38.75 miles over an hour. Well, your**consumable**expenses are**$7.63.**So,**$11.99 + $7.63=$19.62.**Now we’re going to assume you get $0.75/mi, $0.075, and $0.90 base fare. So, gross revenue is:**35 x $0.75 + 45 x $0.075 + 2 x $0.90 = $31.43**Now calculate net revenue:

**$31.43 - $19.62 = $11.62**Now to get a realistic picture of your earnings add up all your miles driven that day and multiply by your figure from adding your

**consumables**. Then subtract that and your**services**daily cost from your earnings for that day. This will be your net or take home.Now, we’re going to calculate a week (most of you should have this figured out by now, but just in case you don’t, here it is.)

**Net Revenue by day**

MONDAY: $178.63

TUESDAY: -$11.99 (Look at who’s being lazy and taking a day off and sitting on their couch all day)

WEDNESDAY: $164.79

THURSDAY: $162.48

FRIDAY: $298.36

SATURDAY: $301.23

SUNDAY: $145.07

**Total: $1238.57******These figures are not meant to be used as a factual example of real world earnings. Just merely a simulation to explain the math.

Your net will vary depending on number of loaded miles versus unloaded miles. I hope this helps. Just because you don’t physically swipe your card or pay cash does not men you are not spending money. The purpose of this post was to help you understand your expenses which go far behind just gas and coffee. I know this post is long, but I really hope some of you new guys use it to make the most of your business and wish you all the best of luck.

~FXService

*****I’ve never owned a Prius, this is purely hypothetical for educational purposes. I attempted to get as realistic as possible, but please do your own research when calculating these figures for yourself******These figures are not meant to be used as a factual example of real world earnings. Just merely a simulation to explain the math.Optional number cruncher soundtrack:

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