# How to Calculate true cost per mile?



## JHawk (Oct 27, 2015)

Doe anyone know of a generally accepted method to accurately calculate the cost per mile of operating your car? It seems there are a lot of different philosophies thrown around on here, and honestly, I think Uber knows that our true operational cost is hard to pin down, and that confusion plays to their advantage when recruiting drivers and setting rates. A lot of drivers assume it's simply the cost of gas...maybe throw in a new set of tires and brakes every year along with some oil changes and car washes, but obviously there's a lot more that goes into it. The IRS gives us the $.57/mile deduction, and while it's an easy number to use...it can be higher or lower depending on the type of car you drive as well. 

For those of you that have operated fleets or other vehicle based businesses....how do you determine your true cost of operation on a per mile basis?


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## DunDeal (Dec 19, 2015)

I don't know about generally accepted method, but I have done some calculations that apply to my situation. To me it breaks down into 3 categories

1. Cost of gas (per mile)
2. Cost of maintenance (per mile)
3. Cost of depreciation (per mile)

1. This is an easy one. I have a Ford C-Max hybrid and get 43 mpg. If a gallon of gas costs $3 thats 43 miles for $3 or 7 cents a mile.
2. This is a little tougher. For me when I bought this car new in July ( it was last years model, 2014) I bought the extended warranty and service plans. So I have no out of pocket expenses for maintenance for 6oK miles (other than tires and brakes). The cost was $2300. That's less than 4 cents a mile for the first 60K miles. Tires may need to be replaced before 60K. Brakes on a C-Max last a long time as they are larger and used to recover energy for the battery. All in all say 5 cents a mile.
3. For depreciation I looked at both the C-Max and a similar model the Prius as it has been around longer. I checked the book value of a 2012 model and changed the mileage from 26K to 90K. I figure I would use 26K in 2 years for personal use and the rest would be uber. The difference in book value is the difference in depreciation for using the car for uber. The difference was about $3800. That's 6 cents a mile

So in summary, for me anyway, gas 7 cents, maintenance 5 cents, depreciation 6 cents. Total 18 cents a mile. Everyone laughs at you for using a new car for uberX but I don't agree. Although the depreciation is higher on a newer car, the maintenance is less. An older car is more likely to have higher maintenance costs due to wear out. Also I was very shocked how low the depreciation really is when you run the numbers on a per mile basis. The 58.5 cents/mile that the government ALLOWS you to deduct for your taxes has nothing to do with reality. The real number is much lower. You should do the calculations yourself for your situation but I bet for most people it is around 20-30 cents a mile. 

For full disclosure I did not buy this car for uber. I had no idea about uber when I bought it. It was several months later before I decided to try uber and the car I had seemed like a good one to use. Had I purchased a car JUST for uber, I may have made a different choice, or maybe not.


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## Blake Anderson (Dec 24, 2015)

The following mileage calculator can be used to calculate either the cost of driving your car or the cost of owning a car. If you plan on owning your car a long time, you will probably notice that the cost it calculates is significantly less than other estimates you find for ownership costs on the internet. That is because this calculator calculates the average cost of owning your car over the entire time you own a car while most of the other estimates you will find make assumptions that you will only own your car for a year or two when depreciation costs are significantly higher than in the last several years of your cars life.

If you don’t have the benefit of a time machine, this calculator will require you to make many estimates and guesses. The good news is that there is a mathematical principal that says when making an estimate the more small estimates you have to make in your calculation, the more accurate your final answer will be because some of your guesses are likely to be high, some are likely to be low, and they should balance each other out. Just take a reasonable guess.


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## itsablackmarket (May 12, 2015)

Easy. See what professionals are charging. Of course, Uber is not a professional service, it's a scam and a disgrace and should immediately be made illegal worldwide.


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## DunDeal (Dec 19, 2015)

Blake Anderson said:


> The following mileage calculator can be used to calculate either the cost of driving your car or the cost of owning a car. If you plan on owning your car a long time, you will probably notice that the cost it calculates is significantly less than other estimates you find for ownership costs on the internet. That is because this calculator calculates the average cost of owning your car over the entire time you own a car while most of the other estimates you will find make assumptions that you will only own your car for a year or two when depreciation costs are significantly higher than in the last several years of your cars life.
> 
> If you don't have the benefit of a time machine, this calculator will require you to make many estimates and guesses. The good news is that there is a mathematical principal that says when making an estimate the more small estimates you have to make in your calculation, the more accurate your final answer will be because some of your guesses are likely to be high, some are likely to be low, and they should balance each other out. Just take a reasonable guess.


What mileage calculator?


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## Simon (Jan 4, 2015)

Www.artofbeingcheap.com/calculator


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## Aw Jeez (Jul 13, 2015)

JHawk said:


> Doe anyone know of a generally accepted method to accurately calculate the cost per mile of operating your car? It seems there are a lot of different philosophies thrown around on here, and honestly, I think Uber knows that our true operational cost is hard to pin down, and that confusion plays to their advantage when recruiting drivers and setting rates. A lot of drivers assume it's simply the cost of gas...maybe throw in a new set of tires and brakes every year along with some oil changes and car washes, but obviously there's a lot more that goes into it. The IRS gives us the $.57/mile deduction, and while it's an easy number to use...it can be higher or lower depending on the type of car you drive as well.
> 
> For those of you that have operated fleets or other vehicle based businesses....how do you determine your true cost of operation on a per mile basis?


You forgot about insurance and registration fees. Insurance is definitely added to the cost of operation. If you have full coverage and it costs you, say, $2,000/year and you drive 90,000, then insurance costs you $0.02/mile. Those pennies add up!


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## Greguzzi (Jan 9, 2016)

Add in costs for gas, oil, tires, a maintenance fund, a repair fund, depreciation, insurance, etc., plus some money for replacing the car you are wearing out while driving entitled strangers around, and you will see that the $0.56/mile the IRS allows barely covers all the costs. The IRS is not in the business of giving away money via allowances.


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## DunDeal (Dec 19, 2015)

Aw Jeez said:


> You forgot about insurance and registration fees. Insurance is definitely added to the cost of operation. If you have full coverage and it costs you, say, $2,000/year and you drive 90,000, then insurance costs you $0.02/mile. Those pennies add up!


Didn't forget that. I already own the car for personal use and have insurance and registration costs with or without Uber so nothing additional there. Now if you buy additional insurance just for ubering than that is an additional cost, but I bet 90% of you don't. If you have a second car that is just used for ubering and no personal use that that is a different calculation as well.

Hey I am far from an Uber apologist. I think the rates stink and they obviously could care less about the drivers. I just don't think most people have any idea what their actual cost per mile is and just assume a much higher number than it actually is if you do the math. It is nowhere near the 57.5 cents a mile you get to deduct on your taxes. Probably about 1/2 of that or less if you are in a good situation. Before screaming foul do the math and don't exaggerate the numbers, be realistic. It was eye opening for me.


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## Aw Jeez (Jul 13, 2015)

Wrong. Your car costs you money for EVERY mile you drive it, whether personally out commercially. Many Uber drivers make this same mistake: "I already own the car so driving for Uber costs me nothing!" Wrong. Insurance costs don't go away simply because you now drive for Uber; they continue to be a factor in how much that car costs you to run. Ignoring them will give you an inaccurate figure. Do you only factor in the miles you drive for Uber when figuring the cost of replacement tires? Of course not.


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## DunDeal (Dec 19, 2015)

Of course it costs me for every mile I drive it, but my personal use is my personal use and I would have that cost whether I used it for uber or not. Again, I did not buy this car to drive uber. I bought it for my personal car. Only later did I sign up to drive for uber. Only ADDITIONAL costs should be considered when calculating the cost per mile for driving for uber (along with the additional miles). My personal miles don't count so my personal costs shouldn't either. And YES I absolutely DID only factor the miles driven for uber when figuring the cost of replacement tires. Perhaps you need to read my post more carefully.

If I drive 90K miles on my car and 60K is uber and 30K is personal and I need tires every 60K than that is 1 set of tires after 60K of UBER miles. Even though my car now has 90K on it, only 60K was uber so the cost was 1 set not 1.5. All of the mileage discussed was UBER miles not total miles. And I log ALL miles driven while online with uber, not just fare mileage.

I never said it costs me NOTHING, that is insane.


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## Aw Jeez (Jul 13, 2015)

Man, no wonder Travis can get away with treating drivers so badly. Some of you are SO dumb! Uber on, bro.


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## Zanrok (Jan 25, 2016)

Cool Calculator, and good discussion. It looks to be around $0.64 for me to drive my Prius around per mile. Something to keep in mind when accepting fares...


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## DunDeal (Dec 19, 2015)

Website calculators ASSUME the car is ONLY used for business purposes. Doesn't apply to using your personal car for part time ubering. You can do the math yourself.


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## DunDeal (Dec 19, 2015)

Why is this so hard to understand? If you own a car and it costs you X to run for you personal use and then you start driving uber with it and now it costs you Y. The expense for driving uber is NOT Y. It is Y-X. You have X expenses whether or not you drive uber. It doesn't just go away. In my case where I use my personal car for ubering my insurance & registration cost are part of X. I have to pay that whether I drive for uber or not. If I quit tomorrow I still pay those expenses as I need the car. It is not an uber expense (in my case). 

If you buy additional insurance specifically for ubering then yes then it counts. Or if you buy a second car just for ubering then the additional insurance and registration for the second car counts of course. I bet you get a break when you insure 2 cars with the same plan though, do you factor that in? Since it is the same driver most insurance companies give you a big break on a second car as they know you can only drive 1 car at a time.

My costs are specific to those of us that have a personal car that we use for part time ubering. It does not apply to all.


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## Lando74 (Nov 23, 2014)

DunDeal said:


> Of course it costs me for every mile I drive it, but my personal use is my personal use and I would have that cost whether I used it for uber or not. Again, I did not buy this car to drive uber. I bought it for my personal car. Only later did I sign up to drive for uber. Only ADDITIONAL costs should be considered when calculating the cost per mile for driving for uber (along with the additional miles). My personal miles don't count so my personal costs shouldn't either. And YES I absolutely DID only factor the miles driven for uber when figuring the cost of replacement tires. Perhaps you need to read my post more carefully.
> 
> If I drive 90K miles on my car and 60K is uber and 30K is personal and I need tires every 60K than that is 1 set of tires after 60K of UBER miles. Even though my car now has 90K on it, only 60K was uber so the cost was 1 set not 1.5. All of the mileage discussed was UBER miles not total miles. And I log ALL miles driven while online with uber, not just fare mileage.
> 
> I never said it costs me NOTHING, that is insane.


No, you're still spending the same amount per mile to drive for uber. So when you're using it for income you have to factor your costs against that income. For example, my market is 65¢, 52¢ net after uber's cut. It costs me 25¢/mile to drive. Therefore even if I drove one dead mile for every billable mile, in the end I'm not making any money. It might feel like it in the short term, but it will come around eventually when I sell the car. All that fuel, maintenance and depreciation will have caught up with me. To make any kind of profit, I have to make sure 80% of my fares are at least 1.5x or higher and keep dead miles to a minimum to make the math work.


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## DunDeal (Dec 19, 2015)

I agree with everything you say. I mentioned all miles for uber and that includes dead miles. Your cost of 25 cents a mile sounds much more realistic than the other figures thrown around here. 52 cents net for on fare miles and then add dead miles is not a good income you are correct. But is it really 52? Do you include the per minute too? tips? Surges? That's what makes tipping and driving during surges so important. Or if you have a rate guarantee in your area. Here it is 80 cents/mile 15 cents a minute. Net 60/mile 11.25/min. With careful driving to minimize dead miles and using rate guarantees during slow times, surges during peak times and including tips I have been averaging about 70 cents a mile net including all dead miles. I keep careful records. I clear about 50 cents a mile after deducting car expenses but that is still just over minimum wage when diving by the hrs driven. I am more concerned about earnings per mile that hourly.


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## gman (Jul 28, 2014)

Why guess? Just get yourself a good app for your smartphone to track gas, costs, etc. I use "Fuel Log" for android. Then you have actual, hard data.

Attached is mine I've had going for two years. I add every fill up, maintenance and repair cost, plus I add depreciation at the end of each year as a one time cost. I don't add full depreciation, just the additional my uber driving causes. Along the same lines I do not add in registration and insurance as I'm paying those whether I uber or not. I know certain blowhards will say you need to add those in but I disagree. I'm not interested in the full cost to operate my car, I'm interested in what it costs to operate my car "for Uber".

So bottom line right now is I am at a cost of $.28/mile, which is in line with other methods I've used to calculate it as well as third party sources such as Kelley Blue Book.


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## Greguzzi (Jan 9, 2016)

This is how and why Uber can find so many fools to drive strangers around for under cost.


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## DunDeal (Dec 19, 2015)

gman said:


> Why guess? Just get yourself a good app for your smartphone to track gas, costs, etc. I use "Fuel Log" for android. Then you have actual, hard data.
> 
> Attached is mine I've had going for two years. I add every fill up, maintenance and repair cost, plus I add depreciation at the end of each year as a one time cost. I don't add full depreciation, just the additional my uber driving causes. Along the same lines I do not add in registration and insurance as I'm paying those whether I uber or not. I know certain blowhards will say you need to add those in but I disagree. I'm not interested in the full cost to operate my car, I'm interested in what it costs to operate my car "for Uber".
> 
> So bottom line right now is I am at a cost of $.28/mile, which is in line with other methods I've used to calculate it as well as third party sources such as Kelley Blue Book.


Exactly.


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## Greguzzi (Jan 9, 2016)

Jake1326 said:


> Greguzzi, I know, isn't it fun? Driving strangers as you say for fun and profit. Actually people do this so called job for many reasons. I met a disabled guy that can earn only a small amount to offset his disability payments that only drives on his good days and if he makes 100-300 a week of actual profit.... he is happy because he would sit around the house, feel depressed and look at the glass half full. Now I understand this guy because he can not stand for long, sit for long, work a traditional job because during the winter he has to be off for weeks at a time to manage his pain with meds so he doesn't drive. He is a very kind, older person that has a mind that is sharp and for him, he likes the social contact with people. Maybe Walmart greeter would be better but I doubt they or anyone would allow him to work his schedule.
> 
> My heart goes out to him but I say GOOD GOING SIR. At least he found an easy job that keeps his mind sharp driving business people in the mornings. So, ok, he is the 0.001% of drivers but to make general statements as yours about Uber drivers being fools, well, you are entitled to your opinion but you should thank goodness you are lucky enough to have choices. Getting to know this gentleman I don't believe he can find BETTER work than UBER at this point in his life. I am humbled by him and his effort to get out of bed each morning, get dressed and try to continue to live a somewhat normal life of yes, being a happy Uber driver.


Exceptions are exceptions. And they seldom prove anything.

Further, Uber taking advantage of such a guy makes the company look even more despicable than they do for doing what they are doing to the average driver. He likely thinks he is making money, too. More likely, what he is doing is using his car as an ATM to trade wear and tear, depreciation, etc. for cash today. Far from making me feel better about Uber, it pisses me off more. And it should piss you off, too.


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## flinchy (Feb 13, 2016)

DunDeal said:


> Why is this so hard to understand? If you own a car and it costs you X to run for you personal use and then you start driving uber with it and now it costs you Y. The expense for driving uber is NOT Y. It is Y-X. You have X expenses whether or not you drive uber. It doesn't just go away. In my case where I use my personal car for ubering my insurance & registration cost are part of X. I have to pay that whether I drive for uber or not. If I quit tomorrow I still pay those expenses as I need the car. It is not an uber expense (in my case).
> 
> If you buy additional insurance specifically for ubering then yes then it counts. Or if you buy a second car just for ubering then the additional insurance and registration for the second car counts of course. I bet you get a break when you insure 2 cars with the same plan though, do you factor that in? Since it is the same driver most insurance companies give you a big break on a second car as they know you can only drive 1 car at a time.
> 
> My costs are specific to those of us that have a personal car that we use for part time ubering. It does not apply to all.


Exactly this, it's amazing how many people here don't understand this, it's no wonder not everyone does well ubering..

I had to buy my car anyway to get to day job, so insurance, registration, some maintenance, some fuel, and the cost of buying (ie depreciation) go against 'day job earnings' column

only additional insurance, fuel, maintenance go against uber earnings.

yeah you deduct depreciation/total of insurance/registration come tax time, which is a pretty nice bonus in my eyes.. but for profitability... no, not how it works.

adding everything up together is only useful for working out your overall cost of living in this case, not whether uber is worthwhile or not.


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