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Comment by teruakohatu | Hacker News Reader

> Participants estimated they spent around $4,500 a year on their car. When prompted to include maintenance and insurance, they upped their estimate to $5,900. Whereas Uber says industry data estimates the average annual cost of owning a car in Australia is more like $16,000 to $19,000.

I am in New Zealand. Our car fleet is old (median car is something like 15 years old, but don’t quote me on that).

There is no chance the average New Zealander is spending even close to Uber’ estimate. Australians, I am told Australians have nicer cars than NZ but I really doubt Uber knows more about what the average Australian spends than they do.

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Here in Canada my 2017 vehicle has cost me $6023 CAD (maintenance, cost of ownership, insurance) per year on average. Maintenance includes a suspension repair, new tires, brakes, oil, other small things. I’ve included small items purchased for the car.

If I included fuel it would be a much scarier number.

Based on its apparent condition and ongoing expenses, I don’t expect this number to increase much. I have a feeling Uber’s numbers are wrong, or they’re including fuel costs.

To get a number that high, they're likely also including parking costs too, as well as fuel. If a garage adds $100,000 to the value of a house, that's over $500 a month in increased mortgage costs. And if you have to pay to park at work, too...

You explicitly need to include the cost of fuel. So what is the scarier number?

This seems tough to factor in at the individual level, since usage costs will vary dramatically. I suppose the same applies with rental, but ownership costs won’t very as much. They are difficult models to compare both for cost and practical use reasons. They seem fungible, but in many ways they aren’t.

It looks like with fuel considered, my yearly cost rises to about $12k.

There is a distinction between ownership and usage. By simple fact of owning a car, I have some $1-2k annual fixed costs (insurance + registration + minor maintenance). Gas scales with the utilization, which is lifestyle dependent.

But if you’re comparing to switching to a different mode, you have to include the cost of gas.

That’s what this article is about?

I think the math on car ownership is more complicated than $X to own vs $Y to rent on demand. Being able to take an impromptu trip without any coordination is worth significant quality of life.

It typically takes 5-10 minutes for an Uber to arrive at my door. Not to mention the few times where the driver has cancelled the ride, and left me waiting for a new one to be assigned. Especially troublesome when you are relying upon this service to make a hard deadline at the airport.

Great. There are ways around that, ultimately you can work that into the model as a discount.

Pretending that fuel isn’t part of the equation doesn’t help though.

There's a lot of $70-120,000 cars on the road. Lots of Lexus, BMW, Mercedes, Tesla, Porsche SUVs. Then there's the giant American-style SUVs which are $80k+. Once you factor in depreciation of those over something reasonable like 8 years, you get what Uber are describing pretty quickly.

(I drive a 2009 Hyundai while I wait for a reasonably-priced EV to become available.)

There are two ways to add up the average spending on cars: ask individuals to estimate their aggregate expenses, or add industries together (dealerships, repair shops, petrol stations, insurance agencies, etc) and divide by population.

I suspect Uber statisticians did the latter. I also suspect that method is more accurate than people entrenched in car culture estimating their own expenses.

> t I really doubt Uber knows more about what the average Australian spends than they do.

A big part of the difference could be that Uber is including in its number the depreciation in the value of the vehicle, which most people don’t consider when asked what the cost of ownership in a given year is. Most people answer with insurance + fuel + maintenance and ignore non-cash costs.

If they've done any research at all they almost certainly do know more.

I also live in NZ, did you read the CBA report on our feebate scheme a while back?

It concluded the policy had a net economic benefit due to correcting consumer's failing to take into account the cost of fuel in making ICE/hybrid/PEV purchasing decisions.

I immediately get suspicious when I see a population average instead of a median. Is the luxury car market in Australia blowing up the average?

Amusingly, in America, I purchased my used Honda for less than $16k.

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