By Karen Robinson-Jacobs
The Dallas Morning News
WWR Article Summary (tl;dr) A new AAA study says Urban drivers using ride-hailing services as a primary mode of transportation spend more than $20,000 annually. But not everyone is buying that calculation.
The Dallas Morning News
A study from AAA suggesting ride-hailing services such as Uber or Lyft could amount to “twice the cost of car ownership” is setting off a debate on social media.
Earlier this week, the nation’s largest “motoring and leisure travel organization,” which brings in much of its revenue from car owners, said a new AAA analysis shows ride-hailing services “are not a cost-effective replacement for vehicle ownership.”
The study said the average driver in an urban area, “the only setting in which using ride-hailing services are a practical full-time transportation option”, racks up 10,841 miles a year.
Urban drivers using ride-hailing services as a primary mode of transportation would spend more than $20,000 annually, AAA said. “This equates to more than twice the cost of owning a personal vehicle, even when factoring in the expense of fuel, insurance, parking and the vehicle itself,” according to the analysis.
In Dallas, the annual ride-hailing cost was estimated at $16,944, which was the least expensive annual cost among 20 urban areas studied. The most expensive was Boston at $27,545.
According to AAA’s annual “Your Driving Costs” study, the average cost to own and operate a new vehicle, the costliest form of vehicle ownership, is $7,321 for 10,841 miles of travel annually.
Gabe Klein, former commissioner of transportation departments in Chicago and Washington D.C., went on Twitter to question AAA’s premise that driving patterns would not change.
“No one would switch out on a 1 to 1 basis. People who give up personally owned cars take transit, walk, bike, carshare, ride hail, etc.,” he said.
Other Twitter users anecdotally also offered up examples of switching to multiple means of transportation.
But Tim Dunne, director of consumer insights for J.D. Power, said he’s not seen evidence of a big drop in miles traveled by the carless.
“Where’s the evidence?” he said. “I’d like to see the evidence that it’s going to change people.”
Dunne did some calculations earlier this year using himself as an example and came up with results similar to AAA.
He said he found that switching from his own car to a ride-hailing service would boost his per-mile cost by about 80 percent. His example assumed the mileage didn’t change.
He figured the annual cost of car ownership at about $9,740, including $240 a year on maintenance and $360 a year on car washes.
The web is filled with tales of consumers who said so-long to car ownership and switched instead to ride-sharing, public transportation and biking.
Neither Dunne nor Uber spokesman Travis Considine had real-world stats on how consumers behave when they hand over the car keys.
But Considine said there are other factors to consider, including the ecology.
“There are over 1 billion cars in the world today and championing the idea that each of those cars should be used by just one person comes with tremendous costs and consequences for us all,” he said in an email. “This includes increased congestion in our cities and approximately 10,000 (U.S.) deaths every year due to drunk driving. But using multiple modes of transportation, including ridesharing, can help reduce those problems.”
The AAA report cites only a few instances in which it deems ride-hailing services as a possible replacement.
“For those who travel a very limited number of miles annually, or have mobility issues that prevent them from driving a personal vehicle, ride-hailing can be a viable and important option,” John Nielsen, a AAA managing director, said in a statement. “But, for everyone else: the car is still king.”