Is Uber Cheaper Than Owning A Car?

For most people, transportation is one of the highest line items in the budget. Yes, you need a way to commute to and from work, plus run errands, but does that really mean you need to own a vehicle?

Given that there are rideshare services available throughout the U.S., you do have the option to ditch your car and get around using Uber or Lyft instead. But is that really a good idea? What are the cost breakdowns of Uber versus owning a car, and are the potential savings worth it?

Let’s break down the costs of owning a car versus the costs of using rideshare services and what to consider before you choose which option works best for you.

Is Lyft Cheaper Than Owning A Car?

Let’s use the above calculations for car ownership to see whether it’s cheaper to use Lyft. Both Uber and Lyft use similar pricing calculations – it fluctuates depending on the time of day, location, the type of vehicle and minimum costs.

On average, Lyft charges around $1 per mile, not accounting for minimum costs. In other words, it’s slightly more expensive than owning a vehicle. That being said, prices can be lower in your area so use Lyft’s fare estimator to see how much it could cost you. Again, like with Uber, Lyft is a service, so you should consider including potential tip money for your Lyft drivers into your budget.

What To Consider When Choosing Between Using Uber Or Owning A Car

What the above calculations show is that it’s hard to nail down a definitive price when comparing owning a car versus using rideshare services. That’s because there are many variables at play, including the time spent maintaining the car, the type of vehicle you own, how much time you spend driving and what you need for your lifestyle.

Maintenance Time

There are other costs that can’t be calculated in dollars – including your time. When you own your own car, you could spend some time maintaining that vehicle. This includes repairs, waiting at the mechanic’s and cleaning your vehicle. If you use rideshare services, you won’t have to worry about doing any of that.

Type Of Car

It’s also important to consider what type of car you want to buy or are already driving. Rideshare services can be significantly cheaper to use if you own a more expensive vehicle that doesn’t have great gas mileage. If you own a large SUV, the price you pay for gas could get expensive – especially if you have a far daily commute.

Driving Time

Another factor you need to consider is how much you drive. There are a couple of different ways you could look at this. If you drive to an office every day and have a short daily commute, using a rideshare service might not financially make sense since it might not cost you too much anyway. But you could also say that having a short commute is a reason to use a rideshare service instead of owning a car – especially if you pay for parking fees or drive a large vehicle that uses more gas.

The important thing to do is to calculate how much you drive and how much it costs for your daily commute to figure out if it makes sense to own and drive your own car or use a rideshare service.

Lifestyle

Let’s not forget other lifestyle factors that will affect costs. For families with young children, you’re probably better off owning your own car – it’s not that convenient to have to bring a car seat everywhere. The same goes for people who have pets that are often in the car with them. Rideshare drivers might not always be open to having pets in their vehicle.

Take your everyday lifestyle into consideration when figuring out if using rideshare services is right for you. For example, if you have a job that requires you to be on the go, run errands frequently or take road trips often, using Uber or Lyft could be more of a hassle for your current lifestyle.

Ridesharing Vs. Car Ownership FAQs

Now let’s discuss some frequently asked questions on the topic of ridesharing versus car ownership.

Is it cost-effective to Uber to work?

The cost-effectiveness of using Uber to commute to work depends on your specific situation and also what you’re willing to spend and give up. If you’ve done the calculations and found that owning and driving your car is more expensive than daily Uber rides, then maybe using a rideshare service is right for you.

What are the pros and cons of using rideshare services instead of driving myself?

There are a couple pros and cons to consider when deciding whether to use a rideshare service or drive yourself. One main pro is the potential to save money while one main disadvantage is your lack of freedom and privacy. If you want to run to the store quickly to grab something, you can’t just hop in your car and go. This is where having and using your own vehicle can be extremely helpful.

Is it cheaper to not own a car?

It can be cheaper, but this depends on the type of car you’re looking at buying and how much you could pay for various car expenses. With car ownership comes money spent on car insurance, maintenance, gas, parking and a monthly payment if you have a car loan.

The Bottom Line

Figuring out if using Uber is cheaper than owning a car is going to depend on your personal calculations of how much you spend on your car and daily commute. While it might be cheaper for some, it might be more expensive for others. Keep in mind that using a rideshare service does take away some of the freedom you have when you use your own car.

Download the Rocket Money℠ app to further assess your overall financial situation and figure out how much money you’re spending monthly on various expenses.