Study finds ride hailing-services cost more overall than car ownership

A new analysis by the American Automobile Association shows that ride-hailing services are not a cost-effective replacement for vehicle ownership.

Researchers with AAA’s Foundation for Traffic Safety found that the average urban driver who relies on services such as Uber or Lyft as a primary mode of transportation shells out $20,118 annually. 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 auto association.

AAA analyzed the costs of ride-hailing services, and factored in the use of an occasional rental car, in 20 major urban areas. Based on the average number of miles traveled by city-dwellers, the most expensive city was Boston at $27,545. Regionally, the cities that were analyzed include Austin, in which residents would spend $19,821; Phoenix, at $17,436, and Dallas at $16,944.

Here is the rest of the list in alphabetical order:

Atlanta $17,741

Baltimore $19,917

Chicago $22,020

Cleveland $20,091

Denver $20,434

Los Angeles $17,951

Miami $17,339

Nashville $26,397

New York $21,279

Philadelphia $23,201

Pittsburgh $18,940

Salt Lake City $18,866

San Diego $17,316

San Francisco $21,972

Seattle $23,951

Washington, D.C. $21,093

According to data from AAA’s annual Your Driving Costs study, the average annual cost to own and operate a new vehicle, the costliest form of vehicle ownership, is $7,321 for 10,841 miles of travel annually.

AAA also analyzed the costs of flat-rate parking per year with an average cost of $2,728. For those with access to free parking, relying on ride-hailing services is nearly three times more expensive than vehicle ownership in these cities, according to the analysis.

Ride-hailing seems to be cost effective for those who travel a very limited number of miles annually, or have mobility issues that prevent them from driving a personal vehicle.

Vehicle owners looking to minimize their operating costs should consider buying a pre-owned vehicle in good condition, filling up with regular unleaded rather than premium gasoline, routinely maintain the vehicle and slow down.

Here is how AAA conducted the analysis:

AAA leveraged data from the AAA Foundation for Traffic Safety’s American Driving Survey. AAA’s Your Driving Costs data served as the basis for all car ownership calculations, factoring in depreciation, fuel, maintenance, repair, financing, insurance, license, registration costs and taxes. Total cost of ride-hailing is based on data from 243,838 economy-level, single rider trips in 20 U.S. urban areas and does not factor in costs associated with carpooling or multimodal transportation options. On average, those using ride-hailing services spent an average of $13.15 per trip, spending 15.11 minutes and traveling 6.66 miles. Ride-hailing costs include the occasional use of rental vehicles for longer distance travel.