Sam. You own a Tesla Roadster, a car for people who don't have to niggle over money.<p>Most people a) don't live in SF b) have your money c) have access to Uber and d) have a Tesla Roadster.<p>You're essentially talking to yourself and a few choice friends who live in the same bubble as you.
I actually have some personal numbers after owning a second hand 2000 Mustang for 1 year from 112k to 121k miles exactly since yesterday. I got the car for 6000.<p><pre><code> Uber 9000 miles x $2 = 18000
Personal Car: 7000
Maintenance 2500
- new bumper (old one taken off while street parked) 1000
- replaced foggy headlamps 400. purely cosmetic reasons
- side window smashed 800. never park in oakland =(
- oil changes etc? (200 at most)
Insurance 600 (checkout AAA)
Depreciation 2000(?)
Gas 1800 ($4/gallon @ 20 miles/gallon)
</code></pre>
No contest for me, really. Even if I payed 300 bucks a month for a commuter parking spot in SF, and got an occasional parking ticket here and there.<p>For people who can get to and from work easily using public transportation, perhaps owning a car does not make sense as much as Zipcar/Uber. Owning a car can cost a lot of money, but for people who want one as a form of transportation it can be very affordable (i.e dont buy new). Also, the average car is expected to travel 10-12k miles a year.
I have to be driving less than 7000mi/year for Uber to make financial sense over my Model S P85+.<p>Let me repeat that: from purely economical perspective, if driving more than 7000 miles/year, Tesla Model S P85+ is cheaper than Uber.<p>Here are the numbers. Basic assumptions:<p><pre><code> gas : $4/gal (don't know if it's even a valid number anymore)
power: $.1/kWh
</code></pre>
Tesla Model S P85+:<p><pre><code> depreciation: $1/mile + $300/month (the $300 per months is a sandbagging factor, in reality it doesn't exist)
power: $.033/mile
maint: $600/year covers everything
tires: $1600 (P85+ goes through the full set once a year, depending on how you drive)
registration: $60/year
insurance: $600/year
parking: $300/year (suburbia, I hear you say. yeah, that's right)
---------
7000 miles => $13993
</code></pre>
Uber:<p><pre><code> 7000 miles => $14000
</code></pre>
For comparison: My old BMW M Roadster (yr. 2000, ~100K miles on the clock):<p><pre><code> depreciation: $1500/year
gas: $1470 for the 7K miles
maint: ~$2000/year (it's old)
tires: $1000/year (chews through one set of good, soft tires. I like fast corners)
tabs: $100/year
insurance: $600/year
parking: $300/year
---------
7000 miles => ~$7000</code></pre>
this is not worthy of HN and the concept has been touched on many times here. i only blogged it because it was too long for a tweet and i wanted to reference it in a discussion. please don't upvote.
> This calculation is why I think Uber is still undervalued. The people who say Uber is only worth $4 billion or whatever don't think enough about people like me who will go from spending ~$500 a year on taxis and car service to ~$12,000 now that the experience and cost have reached a tipping point.<p>This is a lazy analysis.<p>Are there folks who will trade car ownership or public transportation for Uber and services like it? Absolutely. But what is the size of that market? How much of that market has Uber already tapped?<p>Sam's post <i>assumes</i> that Uber's current valuation doesn't take into account this segment of the market and that this segment of the market still offers Uber significant growth potential. Maybe he's right, but he provides absolutely no evidence and doesn't even attempt to come up with hypothetical numbers for consideration.
To be fair, the Tesla Roadster is a pretty odd example. I'm not sure $5,000/year depreciation with $3,500/year for maintenance seems reasonable for almost anything. Am I wrong in thinking that most cars depreciating at that rate will have very low or 0 maintenance costs not covered under warranty?<p>For example, a 2014 Honda Civic with 1 mile on it (example) is ~$17k, while a 2013 with 6k miles is ~$15k (KBB values). There should be very few things not covered by warranty since they're <3 years and 36k miles.<p>VW, BMW, and some others have also started including free maintenance for things like oil changes and wipers and brakes as part of the new car warranty.<p>On the flip side, I'm impressed your insurance is so cheap.
I'm a huge fan of Sam's blog posts and he is President of YCombinator for a reason, but I'm struggling to understand what Sam think that his personal data point (as a wealthy owner of a Tesla Roadster no less) says about the viability of Uber replacing a family vehicle for normal people. Does he not realize that plenty of people <i></i>love<i></i> to drive?
I used to live in a smallish german town which had an excellent car sharing service. They had about 15 cars of all sizes all around town which you could rent vja phone or web for as long as you needed then. I paid 11 euro per month and in addition 3 to 10 euros an hour (depending on the car) and some cents per km.<p>Tbis service was perfect! Need to go shopping for the weekend? Take the vw golf. Cat needs to go to cat doctor? Take the smart. Want to help a friend with moving? Take the mercedes sprinter. Want to go to the beach with some friends? Take the vw passat.<p>All in all i paid 20 to 50 euro for _all_ my car needs and i never had to think about refilling gas, switching to winter tires, do checkups and so on.<p>Unfortunately i had to move to a different town where such a service does not exist and i really really feel limited. I need a car only once or twice a month so buying one is out of question. And renting from a normal car renting company is too expensive.
I'm a little confused about the valuation point. People have been doing the math on taxicabs versus car ownership since... forever. Whole cities, like NYC, are organized around that tradeoff. How is this not already priced into Uber?
While this is very specific to 20+ year olds, Uber has allowed me to lower my rent significantly.<p>Being in my early 20s I frequent bars often. I like my car but I can't go to a bar in my car.<p>Previously, to accommodate my lifestyle I lived in downtown Seattle. This year I moved away, not very far, a 30-40min walk, and am saving about $1000 a month. According to Mint I've only spent $150 (about $6 a ride) on UberX this month.
My wife and I moved to SF ~6 months ago from Mountain View. We sold one car almost as soon as we moved, as we definitely didn't need a car each. Just last week got rid of the last one as the math really didn't make sense.<p>All in, gas, insurance, car payment and parking spot we were spending over $900 a month on unavoidable monthly costs, at times this number would also go up based on using the car to get around the city and having to pay $10-40 to park the car at wherever we were going.<p>Add it all up and that same money can buy a lot of Uber/Lyft/Zipcar at 90% of the convenience. I've yet to see how much we'll spend monthly on various transportation services but so far it looks like we'll be saving close to $400/m.
Still not sure how this would work for anybody with a family and kids and/or living outside of urban areas (the majority of people). Has this been touched on in previous discussions? Would love to hear some thoughts.
Imagine what will happen when we combine decentralized car use with autonomous driving. Uber is already cheaper than driving yourself around, but think how affordable it would be if no Uber driver was needed at all.
I agree with most of the posters here that the market for Uber totally replacing household vehicles is pretty slim. However I think there could be a larger market for Uber replacing 2nd/3rd vehicles.<p>That said, there are already taxis and car share programs. Uber may be able to take customers from them but I'm not sure that Uber really provides something compelling enough that it would push a large number of people who are at the margin over the edge. Disclaimer: I've never actually used Uber
Its definitely cheaper because<p>1) UberX is covered by personal insurance, drives a lot of other people around (hence the cost is shared over many rides).<p>Your personal car also is covered by personal insurance but drives only "you" around.<p>Of course, UberX has an insurance advantage!<p>2) UberX driver is doing it part time, so he/she certainly has a lower paying job (~minimum minimum wage) or no job at all, at which point, the UberX driver's hourly rate is wayyy less than that of a Silicon Valley techie.<p>3) Since an UberX waiting for a passenger is probably idling somewhere or is driving around the high density of pickups area, the vehicle, technically is not required to pay for parking at any point, but if you driver your own car, you have to leave it somewhere, and pay for the parking (at work, and in SF, at home too).<p>Bottomline: UberX can be (strike that), will be cheaper than owning and operating own car once Uber + autonomous vehicle becomes a reality.<p>why?<p>1) Insurance: Less human error --> Lower premium<p>2) No need to pay a driver: 50% of UberX price goes to pay the driver (assuming 30% costs, 20% Uber commission). If Uber just keeps that 20% of commission, and costs remain the same, the fares can go down an another 50%!!!!<p>3) More people moving to autonomous UberX will lead to increase in premiums for manually driven cars (Insurance company has to make profits!).<p>Until this Autonomous UberX happens, all other explanations of UberX is cheaper than driving, needs to be taken with a pinch of salt
For those people who see this argument as inapplicable, you're right for many people <i>today</i>. Sam worries about UberX rates going up. The exact opposite will happen. They have steadily pushed prices down since inception. They've also started realigning the price more towards time and away from mileage and have much farther to go.<p>UberX will eventually charge prices more like $0.60 per minute plus $0.20 per mile.<p>A rough estimate based on the distribution of miles driven is that 30% of Americans should give up their cars under these numbers. Of course, many won't because owning a car isn't purely a financial decision and humans change slowly.<p>Discussions and imagination move much faster than reality but the world will catch up.<p>Technical note: The price per hour should be (time-related depreciation)/miles + hourly wage divided by the utilization rate. Mileage should be the sum of fuel costs per mile, maintenance cost per mile, and mileage based depreciation.<p>Running these numbers for a driver expecting $20 per hour (Average for a Taxi driver is ~$12) with 2/3 utilization and driving a Prius yields a pricing structure of ~$0.60 per minute and ~$0.20 per mile.
I did some back of the napkin math of my own and this is way of base. I don't live anywhere even close to somewhere that uber operates so it doesn't really matter but it made me think, "am I really spending that much on owning a car?" The per mile number is what got me so I came up with a number myself and I'm way closer to $0.50 per mile.<p>I have a Chevrolet cobalt that I bought 5 years ago for $6000. I will have this car until it dies so depreciation isn't really a factor. Instead I just divided $6000 by 5 years. I live in Canada and gas here is the equivalent of about $5.29 per gallon. It's been a good car and has only cost me about $2000 per year in maintenance (I do some minor stuff myself). Factor in registration, license, insurance and at 12000 miles per year at my measured fuel efficiency, I come in at a little less than $0.50 per mile.<p>If it was going to cost me $2 per mile I think I would have to just stay home.
I would like to see a comparison between Uber, car sharing (like Zipcar or Car2Go or whatever local carsharing organization you might have) and car ownership. I'm a carsharer, and between me and my wife we spend about $500/month on carsharing, which looks about half of what it costs Mr. Altman to own and operate a Tesla Roadster.
lol @ 5k a year depreciation, 3.5k maintenance, and 3.6k parking, i.e. the majority of this analysis.<p>In conclusion, paying someone to take you in their Toyota Prius is less expensive than paying for your own Tesla.<p>Still, I see sama's point. I own/maintain my own motorcycle and I uber/lyft when I can't do that. Best of both worlds.
As a counterpoint I bought a car for about $3000 4 years ago and have put a bit over 40k miles on it. Maintenance, insurance, registration, etc. have added up to about $7k (you don't need full coverage insurance on a $3k car). Fuel costs are about $10k (13 miles per gallon at about $3.30/gallon). Total cost of ownership is about $20k.<p>An uberX at $2.00/mile would have cost me $80k.<p>I could have bought 4 cars and driven them the same mileage for the price of uberX. I've been able to drive this car deep into the cascades, olympic peninsula, etc. for awesome camping trips--something uberX would never let me do. I also never worry about parking on the street because, hey it's a $3000 car who cares?<p>edit: Car is a '99 Jeep Cherokee if anyone cares, with over 180k miles on it now (and should easily go to 250k+ miles with regular maintenance).
In Kazakhstan you can hail any car on the street - the cost of travel would be about 5 dollars. People still buy cars because for certain trips it is inconvenient (e.g. going to/from an airport, shopping, travels outside cities, non-popular routes). This system also coexists with normal taxi services which are more expensive but the fares are still suppressed.