Uber is a way for unsophisticated drivers to convert vehicle depreciation to immediate income at a poor conversion rate, under the guise of a sustainable taxi platform.
If driving for Uber instead caused you to have 500,000 miles on it the bluebook value would be ~$2500, so the extra miles reduced the car's value by ~$1500. By contrast, at 50 MPG and $3/gallon the extra 344,000 miles would have cost you >$20,000 in gas.
When you already have the car as a sunk cost because you need one for yourself, the depreciation is almost completely irrelevant unless you're doing something ridiculous like selling the car when it still has significant market value left.
Try to find a 2010 Prius with over 300,000 miles. There are only a handful in the US because they fall apart long before 500,000 miles.
Depreciation isn't just about the car's value - it's also about the amount of mechanical work you have to put in for the suspension, tires, brakes, etc during the time that it goes from 150,000 miles to 500,000 miles.
My mom's 2010-era Prius is a good example. The dash displays failed at around 100,000 miles, and she bought a new car rather than pay $2,500 to have the dash pulled out and display replaced.
This isn't hard to find when they're used for car service. They're harder to find on the used market because the people who put >300,000 miles on a car don't generally sell them while they still run.
> Depreciation isn't just about the car's value
Depreciation is just about the car's value. Repairs aren't depreciation.
And many of the people who drive as an occupation learn to repair their own vehicles, so they have lower repair costs than other people.
A big fraction of things that we consider depreciated to zero are still worth something. A big fraction fail before the point where we would do that. A big fraction incur larger operating costs later in their lifetime.
You may incur some repairs as a result of the additional miles, but that's not depreciation, and it's also not a covert cost you don't pay until later even though you're committing to it now. The cost of expected future repairs is already reflected in the market value. The cost of past and present repairs is not a hidden future cost.
It's not the most you can lose, because you have a bunch of repeated times where you're making a choice about whether to repair or not, and then whether to keep in service driving it. You can easily be wrong or get unlucky. You can choose to do an expensive repair because it seems to be the thing that preserves the most value, and continue to drive it for Uber because you expect to have a good operating history from this point.
You can incur arbitrarily high operating costs if you're unlucky, but if you're unlucky you can incur arbitrarily high operating costs without putting any additional miles on it. There is a reason the vehicles used in car service skew towards specific models with a strong reliability record.
The cost to maintain and repair affects a car's value, though, at least for commodity cars (classic and rare cars are of course a different scenario). Mileage is a proxy for the likely extent of repair and maintenance a car needs.
It's a $4000 car. It can't lose more than $4000 in value.
If the car needs $400 in repairs, you might find it worthwhile to do the repairs, but that's not depreciation.
Finding another car takes work and involves risk, both of which you'd rather do less often than more often.
Cars used in car service commonly exceed 300,000 miles. There are tales of some that do millions. For commercial trucks that isn't even uncommon.
And 500,000 miles was chosen as an extreme case to demonstrate that you're not going to incur a lot of "depreciation" no matter how many miles you put on something.
This summer in Spain, many a taxi driver was driving a Tesla instead of the traditional Mercedes. The reason: Not just electricity vs gas, but massive savings in other maintenance.
If a driver makes more than that, roughly speaking, they are profiting
The IRS is taking the average cost, but if you're doing this as more than a hobby you choose a vehicle with above average reliability and efficiency and learn to do your own repairs, so you have lower costs. And the IRS includes all of the sunk costs of vehicle ownership, not just the incremental cost of putting more miles on a car you would have regardless.
He drives 10+ hours a day and had like 60k trips completed. I'm sure he is doing okay.
It's rare, but it can happen.
They brought the fucking over and being fucked over steps in-house, but outsourced the middlemen.
Amazing!