The accident is a potential as well. the insurance is real... and FYI some of us dont carry collision insuranceI never planned on selling my last car. But then a drunk intervened and it was totaled.
If you never have an accident you don't need insurance. Accidents are only a POTENTIAL cost. So why plan for them with insurance?
You're still wrong, anyway. The car will be useless faster than it would otherwise be. So the cost will come in when you have to buy another car sooner than you would have.
But now you're replacing parts instead of the car...sigh.
That's not how it works.
That's not how any of this works.
You better start collecting engines, transmissions, suspension parts . . .
Are you kidding ? You still need matinee and it goes down in value. It’s alwas depreciating. Where is the money for the next car after that one don’t run anymore? From the depreciation. Some people have such a hard time understanding money they can’t see
Expenses.Revenue that is net of what? In other words, what are you subtracting from gross revenue to get "net revenue"?
Having a reserve account is certainly a good business practice and something that should be tracked. That's really a different topic than tracking vehicle depreciation in order to determine accurate net revenue.no,you dont need to account for depreciation to have an accurate measure of how much you are truly netting... You will know that when the car finally craps out or when you sell it
what you need to keep track of is your reserve account so you have enough money set aside to unanticipated repairs and for the ultimate replacement of the car... Unless you dont intend to replace the car...I mean at my age I am likely to die before the car does
Depreciation is an actual cost but one that is "realized" at the time of selling/disposing the asset.My point is that depreciation is a potential cost. Not an actual cost. If you never total your car and you never sell your car depreciation never actually costs anything.
Im saying depreciation is not important.,the ability to replace the asset when its worn out ; is. And knowing exactly how much you made isnt important either... as long as I stay a few dollars ahead of my wife's spending is all that countsExpenses.
gross rev - expenses = net revenue
Having a reserve account is certainly a good business practice and something that should be tracked. That's really a different topic than tracking vehicle depreciation in order to determine accurate net revenue.
In the scope of net revenue, "vehicle depreciation" is really "(net) purchase price per mile" of that vehicle. Say you buy a vehicle for $11,000 and use it for Uber/Lyft for 100,000 miles, then sell it for $1,000. That "purchase price per mile" was 10 cents per mile. I don't see how you can have anything close to an accurate net revenue number without accounting for the purchase price of your vehicle.
By driving Lyft, you are essentially selling your labor and your vehicle to a passenger (through a broker) on a mile by mile basis. Therefore, it makes the most sense to account for the labor and vehicle expenses on a mile by mile basis. Part of the vehicle expenses is the purchase price and it should be accounted for on a mile by mile basis.
Of course, there are other ways to account for it, but none of them seem to make as much sense to me.
a new car like mine is over $40000. I paid $25000 for mine (it was 5 years old when I bought it) I didnt buy it for rideshare, but when I decided to do rideshare it was what I owned, so thats what Im using.. When the time comes to replace it Im giving serious consideration to a new engine... $6000 vs $25000-$40000 seems like a no-brainer to meFor $6000 a year I could be buying a new car.
I don't consider replacing the engine and transmission routine maintenance.
That cheeseburger depreciates in it's Value to you with every bite. Why? Because once you've eaten it, you're gonna need to buy another one, and another...
You make my point.That cheeseburger depreciates in it's Value to you with every bite. Why? Because once you've eaten it, you're gonna need to buy another one, and another...
Depreciation and amortization are the same thing.Not correct business thinking. If you drive Uber, you are an independent business.
When you are a business, you don't plan around "depreciation" you plan around the AMORTIZATION of assets.
As Uber drivers we are independent contractors and are using a modified cash basis which means we deduct things like depreciation.Depreciation matters for accrual basis. Most drivers and individuals use cash basis, so a non-cash item, like depreciation, isn’t relevant.
Absolutely... from the point of keeping it, it means you will not be keeping it for long. Think of it this way, every item has a life. In cars you can think of milage as it's life. Suppose your vehicle will manage 300,000miles before it dies (becomes not practical to use it/ will need major overhaul to keep driving it).
I doubt anything you might be driving for Select will go 300k. More like 200k tops.Absolutely... from the point of keeping it, it means you will not be keeping it for long. Think of it this way, every item has a life. In cars you can think of milage as it's life. Suppose your vehicle will manage 300,000miles before it dies (becomes not practical to use it/ will need major overhaul to keep driving it).
Supposed that without uber you drive 20,000 miles a year, so the car will last you 15 years.
Now suppose with uber you put 75,000 miles a year, this time car only lasts you 4 years.
So with uber you will need to replace your vehicle every 4 years, without 15 years. Depreciation is the biggest misunderstood cost of this gig.