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Discussion Starter · #1 ·
Hi all,

First to introduce myself. I'm Justin and my Uber network is in the Richmond VA area. Current pricing structure is 1.05/mile and .18/min. I wanted to get a better understanding of what my actual costs are relative to the payout based on mileage.

Data:
My MPG (Hwy/City Combined): 20mpg

Gas Cost/Per Mile
$2.50/$0.13
$2.75/$0.14
$2.85/$0.14
$2.95/$0.15
$3.05/$0.15

Tires (assuming I get 30-40k miles)
Cost+Labor Est (x4): 500-600
Tire Cost/mile: $.01-.02

Oil Change (assuming 3.5k mile change)
Cost Reg 25-35
Cost Syn 55
Oil Change/mile: .01-.02

Brakes (life and cost vary but still worked out to be under a cent/mile)
Cost Est: $175 for 30k Miles
Brake Cost/mile: .01

Now this is where it gets interesting. I ran cost calculation thinking that I would be depreciating the value a lot by Ubering, so I wanted to know exactly what that cost would be per mile. My figures come directly from NADA, which isn't the best source, but it was readily available.

2005 Nissan Murano Vehicle Depreciation
Miles/Value/Amt Depreciated
N/A
N/A
20000 9037
30000 9037 0
40000 9037 0
50000 8825 212
60000 8325 500
70000 7875 450
80000 7475 400
90000 7125 350
100000 6800 325
110000 6525 275
120000 6275 250
130000 6025 250
140000 5850 175
Miles/Depr./Depr. per Mile
10000 $325 $0.03 100k
10000 $400 $0.04 80k
10000 $500 $0.05 60k

So the equity of the vehicle lost isn't nearly as bad as I was anticipating. But I'm using an older vehicle and this has surely got to be wider on a newer car:

2010 Nissan Murano Vehicle Depreciation
Miles/Value/Amt Depreciated
100 19450
10000 18900 550
20000 17925 975
30000 17025 900
40000 16250 775
50000 15525 725
60000 14900 625
70000 14325 575
80000 13925 400
90000 13350 575
100000 12900 450
110000 12475 425
120000 12075 400
130000 11700 375
140000 11350 350
Miles/Depr./Depr. per Mile
10000 $450 $0.05 100k
10000 $775 $0.08 40k
10000 $975 $0.10 20k

So it's nearly double for a 5 year newer model. I didn't do a new vehicle, but obviously that would be signifcantly more.

Analysis:
Uber takes 20%, so let's start with $.84/mile (1.05*.8). I'm not going to factor in time, yet because you can do that on your own later. But using conservative estimates I'm looking at spending money on $.02/mile (brakes), $.01/mile (oil), $.14/mile (gas), and $.04 (depreciation/equity loss) for a total of $.21/mile.

So for Uber in my area with my vehicle, you really net about $.63/mile + $.18 for time/min. It would be a little less for newer cars, but with better fuel economy it may even out.

I welcome any feedback, thanks for reading.
- Justin
 

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Hi all,

First to introduce myself. I'm Justin and my Uber network is in the Richmond VA area. Current pricing structure is 1.05/mile and .18/min. I wanted to get a better understanding of what my actual costs are relative to the payout based on mileage.

Data:
My MPG (Hwy/City Combined): 20mpg

Gas Cost/Per Mile
$2.50/$0.13
$2.75/$0.14
$2.85/$0.14
$2.95/$0.15
$3.05/$0.15

Tires (assuming I get 30-40k miles)
Cost+Labor Est (x4): 500-600
Tire Cost/mile: $.01-.02

Oil Change (assuming 3.5k mile change)
Cost Reg 25-35
Cost Syn 55
Oil Change/mile: .01-.02

Brakes (life and cost vary but still worked out to be under a cent/mile)
Cost Est: $175 for 30k Miles
Brake Cost/mile: .01

Now this is where it gets interesting. I ran cost calculation thinking that I would be depreciating the value a lot by Ubering, so I wanted to know exactly what that cost would be per mile. My figures come directly from NADA, which isn't the best source, but it was readily available.

2005 Nissan Murano Vehicle Depreciation
Miles/Value/Amt Depreciated
N/A
N/A
20000 9037
30000 9037 0
40000 9037 0
50000 8825 212
60000 8325 500
70000 7875 450
80000 7475 400
90000 7125 350
100000 6800 325
110000 6525 275
120000 6275 250
130000 6025 250
140000 5850 175
Miles/Depr./Depr. per Mile
10000 $325 $0.03 100k
10000 $400 $0.04 80k
10000 $500 $0.05 60k

So the equity of the vehicle lost isn't nearly as bad as I was anticipating. But I'm using an older vehicle and this has surely got to be wider on a newer car:

2010 Nissan Murano Vehicle Depreciation
Miles/Value/Amt Depreciated
100 19450
10000 18900 550
20000 17925 975
30000 17025 900
40000 16250 775
50000 15525 725
60000 14900 625
70000 14325 575
80000 13925 400
90000 13350 575
100000 12900 450
110000 12475 425
120000 12075 400
130000 11700 375
140000 11350 350
Miles/Depr./Depr. per Mile
10000 $450 $0.05 100k
10000 $775 $0.08 40k
10000 $975 $0.10 20k

So it's nearly double for a 5 year newer model. I didn't do a new vehicle, but obviously that would be signifcantly more.

Analysis:
Uber takes 20%, so let's start with $.84/mile (1.05*.8). I'm not going to factor in time, yet because you can do that on your own later. But using conservative estimates I'm looking at spending money on $.02/mile (brakes), $.01/mile (oil), $.14/mile (gas), and $.04 (depreciation/equity loss) for a total of $.21/mile.

So for Uber in my area with my vehicle, you really net about $.63/mile + $.18 for time/min. It would be a little less for newer cars, but with better fuel economy it may even out.

I welcome any feedback, thanks for reading.
- Justin
Beautiful! Nice Job! That is exactly what an Uber driver should be doing. Now with the above calcs lets do some more math...

Miles @ $.80 per mile minus 20%.

$.64 per mile paid to the driver. Assumption a driver goes 5 miles to pick up a minimum fare (3 mile trip) and has to (not always) drive back 5 miles.

5+5+3=13 miles driven to collect $4

13×.21=2.73operating cost

4-20% (Uber fee)=$3.20 -$2.73 (op cost)=$.47 profit. Then pay taxes on that. Then pay registration car tax, and insurance.

Cmon $90000 a year!
 

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Discussion Starter · #3 ·
Hey Simon, I did think about including taxes, but everyone here has such a wide range, I just assumed they could figure it out. Your calculation looks to include uber's fee twice; once in the per mile, and then at the end after fare price.

Another thing I neglected to add was the base fee, so that would offset some of the costs there in your scenario. But I'm with you man, it's def. not as much as advertised. And at least in my area, it's not a constant flow of pings.
 

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Safe Ride Fees are not part of owning a car.

Dead miles are a reality you cannot avoid. You have to drive to the client without getting paid, but you will be incurring costs. You also drive between trips and your return home.

You are smart to drive an old car, but you can't have it both ways. You either drive a new car with less repairs but more depreciation or you drive an old one with less depreciation but more repairs. Either way each mile you drive, your repairs increase and are not part of owning car. The more you drive, the more will will spend on repairs, period.

You brought out another good point, loading passengers in a car is much harder on the vehicle than driving yourself around. With the extra weight, mileage decreases, the engine works harder and suspension parts wear faster.

And when you get in an accident, you better have that $1000 deductible saved up. And if it's an injury accident, prepare to hire an attorney.
 

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Don't forget the cost of insurance. Even though Uber covers you while you're working for them, you still have to have your own insurance and that has to be factored into your cost per mile. Do you have a loan on the car? That has to be accounted for too. It all adds up to an amount of money that it costs you to drive EVERY mile, Uber or personal.
 

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Don't forget the cost of insurance. Even though Uber covers you while you're working for them, you still have to have your own insurance and that has to be factored into your cost per mile. Do you have a loan on the car? That has to be accounted for too. It all adds up to an amount of money that it costs you to drive EVERY mile, Uber or personal.
Whether you have a loan or if the car is paid for is irrelevant. What matters is how much your asset decreases in value because of Ubering and I think the OP has a good grasp on that.

Insurance is a tough one because it is definitely a fixed expense that you would have whether you uber or not. So it's not really an expense of Ubering. HOWEVER, In most cases, your car is not covered by your insurance or Uber's insurance in the first phase of app on/no client in the car yet. It's a HUGE gap in coverage. Most Uber drivers do not understand this. So any additional cost of getting proper insurance should be included as an expense.
 

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Whether you have a loan or if the car is paid for is irrelevant. What matters is how much your asset decreases in value because of Ubering and I think the OP has a good grasp on that.

Insurance is a tough one because it is definitely a fixed expense that you would have whether you uber or not. So it's not really an expense of Ubering. HOWEVER, In most cases, your car is not covered by your insurance or Uber's insurance in the first phase of app on/no client in the car yet. It's a HUGE gap in coverage. Most Uber drivers do not understand this. So any additional cost of getting proper insurance should be included as an expense.
That gap coverage is a *****. I try to stay home while waiting for a ping, but once im out after that first drop off, my fly is open.
 

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Don't forget the cost of insurance. Even though Uber covers you while you're working for them, you still have to have your own insurance and that has to be factored into your cost per mile. Do you have a loan on the car? That has to be accounted for too. It all adds up to an amount of money that it costs you to drive EVERY mile, Uber or personal.
That depends.

If you bought the car specifically to Uber with and you're one of the few that purchased commercial insurance, then sure, include that into your calculation(I venture to assume both of these apply to a vast minority of drivers).

However, if it's your personal car that you'd be making payments on anyway and you're just using your personal insurance like most people do, then it's already a fixed cost, and it shouldn't be included in your cost structure.
 

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Of course it should! It costs you money to drive that car EVERY mile. Even when you're not Ubering, the car is still costing you money per mile. So when you're figuring how much you "make" you have to include all expenses on that vehicle. The cost of personal insurance doesn't go away simply because you want it to.

If you do it right, you'll discover that your car probably costs $0.25 - $0.35 for EVERY mile you drive, including the miles you put on for Uber. And if you put 50,000 miles per year on your car, you'll have spent a minimum of $12,500 to run it. If only 35,000 of those miles earned revenue from Uber at a net of $0.75/mile, then you only "made" ($26,250 - $12,500) $14,000. Not bad for a part-time job but that sure ain't full-time income.
 

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Discussion Starter · #14 ·
Hey Aw Jeez, thanks for reading. So most insurance plans are based on a 6 month or year payment. To calculate cost for that on a mile basis, you'd need to estimate how ever many miles you plan to drive, which using your 50k miles per year, that would be a very low cost per mile, my guess is not even a cent, but at most a few cents. Lot of factors including driving record come into play there, but I think you may be over-estimating cost of insurance.

As for net, as you can see in my calculations, I'm already at .63/mile, factoring in insurance, dead miles, and return miles, you could probably make the case that my net is slightly less, like in the upper .50s?

A few others things, like surges and tips that I cannot include in the calculations.
 

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Of course it should! It costs you money to drive that car EVERY mile. Even when you're not Ubering, the car is still costing you money per mile. So when you're figuring how much you "make" you have to include all expenses on that vehicle. The cost of personal insurance doesn't go away simply because you want it to.
You're simply wrong here, sorry. Your car payment and your insurance premium are what's called a fixed cost, which means you're going to incur it whether you're Ubering or not.
Therefore, it's inproper to be including that as a cost of driving Uber because you would be paying them regardless.

Or to turn that around, take the same amount you're trying to incur as a cost for your car insurance and your car payment. Would you be saving that same amount of money if you werent Ubering?

No, you wouldn't. It's a fixed cost. You're paying it whether you drive 1000 miles or no miles.

Don't get me wrong, I'll take any opportunity to take a shot at Uber, but it's simply ignorant to charge a fixed cost for your personal vehicle to Uber.

(This is assuming you didn't buy your car to Uber with and you're not paying for commercial insurance. I would presume most people here haven't done either)
 

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You're simply wrong here, sorry. Your car payment and your insurance premium are what's called a fixed cost, which means you're going to incur it whether you're Ubering or not.
Therefore, it's inproper to be including that as a cost of driving Uber because you would be paying them regardless.

Or to turn that around, take the same amount you're trying to incur as a cost for your car insurance and your car payment. Would you be saving that same amount of money if you werent Ubering?

No, you wouldn't. It's a fixed cost. You're paying it whether you drive 1000 miles or no miles.

Don't get me wrong, I'll take any opportunity to take a shot at Uber, but it's simply ignorant to charge a fixed cost for your personal vehicle to Uber.

(This is assuming you didn't buy your car to Uber with and you're not paying for commercial insurance. I would presume most people here haven't done either)
Once again, the car payment or having the car paid off doesn't have bearing on your Uber earnings. What matters is the decrease in value of your asset for each mile driven.
 

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I'm not trying to take a shot at Uber. I'm just trying to get Uber drivers to realize the true cost of operating their vehicles. It's not as cheap as they think.

Of course nobody knows how many miles they will drive a car in advance. And yeah, insurance is a "fixed cost" but that doesn't mean it can't be used to figure out cost/mile. We can make certain assumptions. If I drove my personal car 20,000 miles last year, chances are I'll do it again this year. Full coverage insurance on my van is $3,500/year (a son who's on the policy with one at-fault accident jacks the rate up). This means that I'm paying $0.175/mile for insurance if we drive 20,000 miles again this year. If I add another 15,000 miles of driving for Uber for a total mileage of 35,000, my insurance cost is $0.10/mile. My van gets 16 mpg in the city. Gas in Pensacola is currently about $2.25 for a per-mile cost of $0.14. So there's ($0.10 + $0.14) $0.24/mile without even considering expenses like tires, oil changes, unscheduled maintenance, etc. Yes, some of those items are just pennies per mile, but pennies add up.

Cost of operation has nothing to do with earnings/revenue. It merely tells you how much money you have to SPEND to earn money with your car. And that's the point, isn't it? Uber revenue isn't "free money." The cost of operation of the car is measured by more than just, "I earned $300 last week driving for Uber and only spent $50 in gas so I made $250!" Uhh, not really.
 

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Discussion Starter · #19 ·
I'm not trying to take a shot at Uber. I'm just trying to get Uber drivers to realize the true cost of operating their vehicles. It's not as cheap as they think.

Of course nobody knows how many miles they will drive a car in advance. And yeah, insurance is a "fixed cost" but that doesn't mean it can't be used to figure out cost/mile. We can make certain assumptions. If I drove my personal car 20,000 miles last year, chances are I'll do it again this year. Full coverage insurance on my van is $3,500/year (a son who's on the policy with one at-fault accident jacks the rate up). This means that I'm paying $0.175/mile for insurance if we drive 20,000 miles again this year. If I add another 15,000 miles of driving for Uber for a total mileage of 35,000, my insurance cost is $0.10/mile. My van gets 16 mpg in the city. Gas in Pensacola is currently about $2.25 for a per-mile cost of $0.14. So there's ($0.10 + $0.14) $0.24/mile without even considering expenses like tires, oil changes, unscheduled maintenance, etc. Yes, some of those items are just pennies per mile, but pennies add up.

Cost of operation has nothing to do with earnings/revenue. It merely tells you how much money you have to SPEND to earn money with your car. And that's the point, isn't it? Uber revenue isn't "free money." The cost of operation of the car is measured by more than just, "I earned $300 last week driving for Uber and only spent $50 in gas so I made $250!" Uhh, not really.
Hey Jeez, this was pretty much the intent of this post, to calculate those factors into a loose model that I could use to see what my net take home would be per mile. As you can see in my calculations, the other maintenance costs are so low, it's just a few cents/mile.

One more thing I didn't bring up is Risk - because that's not really measurable here. Most of the time, we are driving during the peak DUI hours, so we are more at risk for accidents. Not saying you couldn't die driving to the grocery store, but it's still something to consider.
 

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I'm looking at spending money on $.02/mile (brakes), $.01/mile (oil), $.14/mile (gas), and $.04 (depreciation/equity loss) for a total of $.21/mile.
On average, an Uber Driver will drive 1 Dead Mile for 1 Paid Mile.
So your true cost basis is $0.42/Mile.
 
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