# Uber's Ultimate Business Plan



## Star Lord (Oct 2, 2015)

Uber is the rideshare company with the master plan, and Lyft is simply following in it's big brother's footsteps. Anyways..

Uber wants to increase it's profits. But how does it do that? By lowering rates, so that more people will take more rides? YES.. Positively YES.

Allow me to explain.. By lowering rates, more and more people will opt for ridesharing. In fact, when people feel more comfortable with it, they will eventually do the math, and it will look something like this....

Car Payment - $495 ($25,000 car @ 7% interest rate for 60 months with zero down)
Insurance - $100
Gas - $150
Repairs, Parts and Services - $75
DMV - $10

Grand Total - $830 average monthly cost of owning and operating a $25,000 vehicle.
Not to mention having to worry about insurance claims, the DMV, parking, and the hassle of buying a car..

But what does it cost to rideshare on a full-time basis ? Let's find out..

If you only live about 6 miles to work, then you would pay about $10 each way... Let's do some math with ridesharing..

Commuting - $400
Running Errands - $150
Night out with date/friends - $150

Grand Total - $750 average monthly cost of ridesharing.

As you can see from the simple math calculations, most of the time, it is actually cheaper to rideshare than owning your own vehicle.

This is Uber's ultimate business plan, to get people to ditch their cars and rideshare instead.


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## NuberUber (Dec 28, 2015)

Star Lord said:


> Uber is the rideshare company with the master plan, and Lyft is simply following in it's big brother's footsteps. Anyways..
> 
> Uber wants to increase it's profits. But how does it do that? By lowering rates, so that more people will take more rides? YES.. Positively YES.
> 
> ...


Yes, this is the way they are going. If you live in a metro area there is really no need to have a car. When I see how many Uber drivers there are on the rider app, I realize how easy it would be to get rid of my car and Uber everywhere. Frankly, it would be much less of a headache to not have to worry about owning a car, and if I had to pay for a parking spot it would be a no brainer for me.


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## Bob Reynolds (Dec 20, 2014)

That might be their stated plan, but it's not going to work and it's more PR bs than anything else. 

Do you realize how much of a shortage of Uber vehicles there would be if everyone ditched their car and took a Uber instead? 

Do you realize how jammed the roads are when everyone gets off work at the same time? Ever seen an office park or plant when the shift ends? You have hundreds of vehicles trying to get into work for the next shift and you have hundreds of vehicles trying to leave from the last shift?

And don't even mention the surge pricing when everyone wants to go home at the same time.


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## Star Lord (Oct 2, 2015)

Bob Reynolds said:


> That might be their stated plan, but it's not going to work and it's more PR bs than anything else.
> 
> Do you realize how much of a shortage of Uber vehicles there would be if everyone ditched their car and took a Uber instead?
> 
> ...


Uber's plan will not be successful overnight. It will be a progression, through time. Uber would like every major city to eventually be like San Francisco. It's just a matter of time before people realize the cost and hassle of owning and operating a vehicle.

Riders are not forced to accept surge pricing. They could simply wait a few minutes.

There will always be many rideshare drivers on the road, regardless of the rates. That's already a proven fact.


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## Bob Reynolds (Dec 20, 2014)

There are two things that are going to stop Uber before much longer. 

1. Insurance. The insurance companies are not going to lose this one. Uber drivers have more than twice as many accidents per mile as taxi drivers. Expect Uber insurance to cost more than Taxi insurance because the losses are going to be higher with inexperienced drivers. 

2. Minimum Wage Laws. Uber has been able to exploit a gray area loophole. That loophole will be closed and the drivers will have to make at least the minimum wage.


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## Berliner (Oct 29, 2014)

Star Lord said:


> By lowering rates, more and more people will opt for ridesharing.
> ...Insurance - $100


It is not "ridesharing", it is driving "pax for money". You´ll never find an ins.co that will cover this for the price of an apple.


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## Star Lord (Oct 2, 2015)

Bob Reynolds said:


> There are two things that are going to stop Uber before much longer.
> 
> 1. Insurance. The insurance companies are not going to lose this one. Uber drivers have more than twice as many accidents per mile as taxi drivers. Expect Uber insurance to cost more than Taxi insurance because the losses are going to be higher with inexperienced drivers.
> 
> 2. Minimum Wage Laws. Uber has been able to exploit a gray area loophole. That loophole will be closed and the drivers will have to make at least the minimum wage.


Uber will eventually pay as much as 3 times the amount for their insurance policy. Not a big deal for Uber. A very small price to pay compared to their massive earnings. I used to sell auto insurance, and know alot about this topic.

Uber Drivers usually make more than minimum wage. However, when you factor in all of the cost associated with the vehicle, then it get's very sketchy.

Uber is financially stable enough to lose a major lawsuit each and every year. They actually expect it.

Too many people use and love Uber, even in high places. Everyone either uses Uber, or know of someone who does.

I hate Uber as much as any Uber Driver, but we need to embrace the harsh reality. Uber will be in business for a very, very long time.


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## Star Lord (Oct 2, 2015)

Berliner said:


> It is not "ridesharing", it is driving "pax for money". You´ll never find an ins.co that will cover this for the price of an apple.


Actually, I have the "ridesharing insurance rider" attached to my insurance policy through Farmers Insurance. I pay an extra $30 a month for it. The good news is that I can now cancel it since I am no longer driving "pax for money".


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## rtaatl (Jul 3, 2014)

It's seems that everyone in this thread is forgetting just one minor detail. For Uber to be so cheap the costs are passed down to a driver that is barely making it in life and will eventually go broke and eventually have a dangerous poorly maintained vehicle. The company is propped up by drivers subsidizing everything and "Cheaper than owning a car" mantra rest solely on taking advantage of the people providing the actual transportation....hence the new phrase "Uber Slaves". Not too hard to understand this. Eventually everything is going to crash...the current business model is not sustainable.


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## Frank G (Feb 2, 2016)

I'm new to Uber. How much can Uber drivers make per week while working in the SF Bay Area?


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## Bob Reynolds (Dec 20, 2014)

Star Lord said:


> Actually, I have the "ridesharing insurance rider" attached to my insurance policy through Farmers Insurance. I pay an extra $30 a month for it. The good news is that I can now cancel it since I am no longer driving "pax for money".


Farmers (and two other companies) have offered a very limited amount of insurance policies that do cover ride share in a effort to collect some real data on exactly what is going on. The rates they set initially did not reflect any experience in this sector.

When the loss data is gathered and analyzed those same insurance companies will adjust their rates to insure that they do not lose money writing these policies.

Since Uber drivers have more than twice as many accidents per driven mile as taxi drivers, it only makes sense that the Uber insurance will be more expensive than taxi insurance. I just don't see how Uber can get past this one.


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## Star Lord (Oct 2, 2015)

rtaatl said:


> It's seems that everyone in this thread is forgetting just one minor detail. For Uber to be so cheap the costs are passed down to a driver that is barely making it in life and will eventually go broke and eventually have a dangerous poorly maintained vehicle. The company is propped up by drivers subsidizing everything and "Cheaper than owning a car" mantra rest solely on taking advantage of the people providing the actual transportation....hence the new phrase "Uber Slaves". Not too hard to understand this. Eventually everything is going to crash...the current business model is not sustainable.


Absolutely. That's why I quit.

However, in this society that we live in, there are and will always be a tremendous amount of people that can't find a job or hold on to a job. Not to mention, those that will always be in need to make some extra cash. Uber will always have excess drivers at their disposal. Yes, it disgusting the way Uber treats it's drivers.. But most Uber drivers are "broke and desperate", and there is nothing anyone can do to change that.. Actually, there is a solution to poverty, but I cannot go into details about that now.. anyways..

Think of this current "consumer based society" as a huge pyramid scheme. The people on the bottom are the ones that are broke and desperate, and that's where Uber comes in to take advantage.


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## Frank G (Feb 2, 2016)

Anyone? About how much can I make in a week in Bay Area?


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## Star Lord (Oct 2, 2015)

Bob Reynolds said:


> Farmers (and two other companies) have offered a very limited amount of insurance policies that do cover ride share in a effort to collect some real data on exactly what is going on. The rates they set initially did not reflect any experience in this sector.
> 
> When the loss data is gathered and analyzed those same insurance companies will adjust their rates to insure that they do not lose money writing these policies.
> 
> Since Uber drivers have more than twice as many accidents per driven mile as taxi drivers, it only makes sense that the Uber insurance will be more expensive than taxi insurance. I just don't see how Uber can get past this one.


On an individual basis, rates should increase, but it will also vary depending on the driver's driving history. That means if I was paying $30 a month with a clean record, in the future it would be somewhere between $40 to $50 with a clean record. Yes, drivers will not like that very much, especially when it becomes mandatory for drivers to carry the insurance.

On the Uber basis, with their million dollar liability coverage, yes, that should increase about 2-3 fold. But again, it's a small price to pay for Uber.


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## rtaatl (Jul 3, 2014)

Star Lord said:


> Absolutely. That's why I quit.
> 
> However, in this society that we live in, there are and will always be a tremendous amount of people that can't find a job or hold on to a job. Not to mention, those that will always be in need to make some extra cash. Uber will always have excess drivers at their disposal. Yes, it disgusting the way Uber treats it's drivers.. But most Uber drivers are "broke and desperate", and there is nothing anyone can do to change that.. Actually, there is a solution to poverty, but I cannot go into details about that now.. anyways..
> 
> Think of this current "consumer based society" as a huge pyramid scheme. The people on the bottom are the ones that are broke and desperate, and that's where Uber comes in to take advantage.


Can't say they will have an unlimited number simply based on the theory of no free lunch. The income is so meager where every driver takes a substantial loss, hence more tax write offs to where the IRS is losing substantial revenue. The leases on these cars will eventually default to where the banks lose big money over time. The insurance companies lose money because of un or under insured drivers out there "ubering" and getting into accidents. So someone is paying for these low fares and eventually there's enough of a loss they're going to come after Uber to recoup...especially the government.


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## Bob Reynolds (Dec 20, 2014)

especially the government


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## Berliner (Oct 29, 2014)

Star Lord said:


> Uber will eventually pay as much as 3 times the amount for their insurance policy. Not a big deal for Uber.


Fluber will pay nothing bc they have nothing. Their VC, or gambling $$$, is about 8 Billion, include China, but it´s not endless. Maybe it works in the daily business, but not in a long term.

Check out "Uber Western Europe" and you´ll see your master of desaster has met his master.


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## Star Lord (Oct 2, 2015)

rtaatl said:


> Can't say they will have an unlimited number simply based on the theory of no free lunch. The income is so meager where every driver takes a substantial loss, hence more tax write offs to where the IRS is losing substantial revenue. The leases on these cars will eventually default to where the banks lose big money over time. The insurance companies lose money because of un or under insured drivers out there "ubering" and getting into accidents. So someone is paying for these low fares and eventually there's enough of a loss they're going to come after Uber to recoup...especially the government.


The driver is taking the loss.

For you and I, we are not living below the poverty line. However, there are a tremendous amount of people that need Uber.

An UberX driver typically makes above minimum wage, but when factored with vehicle expenses, the driver makes below minimum wage...

In order to do UberX.. Actually, the only logical way to do UberX, is that you don't mind making minimum wage and use an economical car that is old and barely qualifies. There are alot of people that fit into this category. That's why there will always be drivers willing to suffer. Not because they want to, but because they have to.


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## Lord Summerisle (Aug 15, 2015)

Star Lord said:


> Uber will always have excess drivers at their disposal.


I'm not so sure about that. A broke and desperate underclass cannot afford to maintain their vehicles. Uber may well run out of stupid.


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## Ziggy (Feb 27, 2015)

Frank G said:


> Anyone? About how much can I make in a week in Bay Area?


About a $1.98 before expenses.

All kidding aside, friends in SF & Oakland that were making $1,500/week a year ago; are now scrambling to make $800/wk. Problem is too many drivers and Uber recently lowered the fares (again). But hey, at least you're not in Detroit making only 30¢/mile


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## Ziggy (Feb 27, 2015)

Lord Summerisle said:


> A broke and desperate underclass cannot afford to maintain their vehicles.


Uber has partnered with leasing companies in many cities ... similar to a taxi lease, driver just pays for the car & gas ... everything else is paid for by the leasing company. In Austin there are 2-3 leasing options; plus Uber just created partnerships with Toyota & Honda to lease cars to drivers. People no longer have to own a car, they just need to drive it.


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## NuberUber (Dec 28, 2015)

Bob Reynolds said:


> *Since Uber drivers have more than twice as many accidents per driven mile as taxi drivers*, it only makes sense that the Uber insurance will be more expensive than taxi insurance. I just don't see how Uber can get past this one.


Can you provide the source for your assertion about Uber drivers getting in more accidents than taxi drivers? I would love to read the background data on this.


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## Star Lord (Oct 2, 2015)

Berliner said:


> Fluber will pay nothing bc they have nothing. Their VC, or gambling $$$, is about 8 Billion, include China, but it´s not endless. Maybe it works in the daily business, but not in a long term.
> 
> Check out "Uber Western Europe" and you´ll see your master of desaster has met his master.


Yes, taxi companies hate Uber. That's a well known fact.

And yes, Uber drivers hate Uber. That is also a well known fact.

I am not defending Uber. I hate Uber as much as you do, but I understand their business plan and I know that it is a good one.


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## Star Lord (Oct 2, 2015)

Lord Summerisle said:


> I'm not so sure about that. A broke and desperate underclass cannot afford to maintain their vehicles. Uber may well run out of stupid.


As soon as the broke and desperate person is able to move on with their life after Uber, someone else will replace him/her. It is a never ending revolving door, only because there is a tremendous amount of broke and desperate people out there.


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## rtaatl (Jul 3, 2014)

Star Lord said:


> The driver is taking the loss.
> 
> For you and I, we are not living below the poverty line. However, there are a tremendous amount of people that need Uber.
> 
> ...


Of course the driver is taking the loss...hence why this loss eventually leads to a loss of government revenue and more than likely a bank repossession. Then financial institutions will be taking a loss. Hence why this model isn't going to be substanable because those institutions will only endure this for so long no matter how many drivers Uber can dupe into doing this.


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## Star Lord (Oct 2, 2015)

rtaatl said:


> Of course the driver is taking the loss...hence why this loss eventually leads to a loss of government revenue and more than likely a bank repossession. Then financial institutions will be taking a loss. Hence why this model isn't going to be substanable because those institutions will only endure this for so long no matter how many drivers Uber can dupe into doing this.


I'm pretty sure the government doesn't lose money because of Uber.. If you take what the government makes from Uber, and compared it to the write offs, I'm sure the government is still making lots of money.

If financial institutions take enough losses, then they will no longer offer the program.. No damage done to Uber, only the driver, as usual.

Inusrance companies will simply raise the premiums.. Uber can afford it, and the driver will take another hit, as usual.

Remember that drivers are a dime a dozen. If you are still a driver, then you can easily be replaced by another desperate driver.


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## rtaatl (Jul 3, 2014)

Star Lord said:


> I'm pretty sure the government doesn't lose money because of Uber.. If you take what the government makes from Uber, and compared it to the write offs, I'm sure the government is still making lots of money.
> 
> If financial institutions take enough losses, then they will no longer offer the program.. No damage done to Uber, only the driver, as usual.
> 
> ...


Yet the driver only makes so much money...or lack thereof. So the driver can't afford insurance, can't make a payment on a car they can't afford anyway, thus Uber has no reliable cars with no insurance. Uber is not self sustaining on its own so therefore drivers can only be so broke to prop up the system. It's going to break eventually if the business model exists in it's current form. Oh and yes if the government loses enough tax revenue from everyone filing a loss on a schedule C you can bet there will be some changes.


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## Star Lord (Oct 2, 2015)

rtaatl said:


> Yet the driver only makes so much money...or lack thereof. So the driver can't afford insurance, can't make a payment on a car they can't afford anyway, thus Uber has no reliable cars with no insurance. Uber is not self sustaining on its own so therefore drivers can only be so broke to prop up the system. It's going to break eventually if the business model exists in it's current form. Oh and yes if the government loses enough tax revenue from everyone filing a loss on a schedule C you can bet there will be some changes.


Uber will be in business for a very, very long time.

In fact, when the next recession hits us, Uber will become much more popular. More drivers will jump on board, more passengers will opt to rideshare instead of spending $1,000 a month on vehicle expenses. People will do whatever it takes to make or save an extra buck.


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## rtaatl (Jul 3, 2014)

Star Lord said:


> Uber will be in business for a very, very long time.
> 
> In fact, when the next recession hits us, Uber will become much more popular. More drivers will jump on board, more passengers will opt to rideshare instead of spending $1,000 a month on vehicle expenses. People will do whatever it takes to make or save an extra buck.


Drivers can only be so broke before they are financially forced to quit. Unless Uber reinstitutes slavery this model can't hold up forever.


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## tripAces (Jun 18, 2015)

You all forget one Major thing people right now associate a vehicle with.

Freedom! Which is Priceless!!


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## Star Lord (Oct 2, 2015)

tripAces said:


> You all forget one Major thing people right now associate a vehicle with.
> 
> Freedom! Which is Priceless!!


What good is freedom if drivers are making minimum wage after expenses ????


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## Istvan (Jan 3, 2016)

It's stupid , I would never ditch my car , owning a car is freedom . Grew up in Europe and I always wanted a car . If I own a used car my cost would only be 35 dollars insurance plus gas . I would never pay 400 a month to commute with some stranger


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## Istvan (Jan 3, 2016)

Star Lord said:


> Uber will be in business for a very, very long time.
> 
> In fact, when the next recession hits us, Uber will become much more popular. More drivers will jump on board, more passengers will opt to rideshare instead of spending $1,000 a month on vehicle expenses. People will do whatever it takes to make or save an extra buck.


What kind of car cost 1000 dollars a month ???? 
I spend less then 600 a month on my car , whoever spend 1000 a month on afar deserve to be broke


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## Star Lord (Oct 2, 2015)

Istvan said:


> It's stupid , I would never ditch my car , owning a car is freedom . Grew up in Europe and I always wanted a car . If I own a used car my cost would only be 35 dollars insurance plus gas . I would never pay 400 a month to commute with some stranger


Believe it or not, there are people that take Uber Select for commuting everyday.


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## Star Lord (Oct 2, 2015)

Istvan said:


> What kind of car cost 1000 dollars a month ????
> I spend less then 600 a month on my car , whoever spend 1000 a month on afar deserve to be broke


A $25,000 car.

Believe it or not, there are people that have $1,000 monthy car payments.. Not to mention everything else that comes with it including depreciation.


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## Istvan (Jan 3, 2016)

Star Lord said:


> Believe it or not, there are people that take Uber Select for commuting everyday.


Crazy !!!


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## Istvan (Jan 3, 2016)

Star Lord said:


> A $25,000 car.
> 
> Believe it or not, there are people that have $1,000 monthy car payments.. Not to mention everything else that comes with it including depreciation.


My car was 32,000 and I spend 600 a month including insurance . Also I keep my car till it does so depreciation doesn't matter to me I spend 30 bucks on oil change every 4 months


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## Star Lord (Oct 2, 2015)

The cost of car ownership is very expensive. If you do the math and factor in EVERYTHING, you will see the reality. I have purchased many new $25k vehicles over the years, and I end up paying around $1,000 a month.. And that's with normal driving habits. And it's only going to get worse as the years go by.


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## Istvan (Jan 3, 2016)

Star Lord said:


> The cost of car ownership is very expensive. If you do the math and factor in EVERYTHING, you will see the reality. I have purchased many new $25k vehicles over the years, and I end up paying around $1,000 a month.. And that's with normal driving habits. And it's only going to get worse as the years go by.


Not really , I own a Ford Focus st and I have 110k miles on it and I only spend around 400 on maintenance oilnchang every 10k miles cost me 30 dollars and change filters every 30k miles that's an extra 10 dollars


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## Star Lord (Oct 2, 2015)

Istvan said:


> Not really , I own a Ford Focus st and I have 110k miles on it and I only spend around 400 on maintenance oilnchang every 10k miles cost me 30 dollars and change filters every 30k miles that's an extra 10 dollars


You pay too much.. Years ago, I used to own a 1984 Honda CRX with title in hand and I was doing all my maintenance. I was only paying $29 a month for basic insurance and $50 a month for gas.


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## Istvan (Jan 3, 2016)

Star Lord said:


> You pay too much.. Years ago, I used to own a 1984 Honda CRX with title in hand and I was doing all my maintenance. I was only paying $29 a month for basic insurance and $50 a month for gas.


I own a 2013 , got it brand new , In last 110k miles I spent 400 a month on car payment , 700 a year on insurance that's full coverage with 250 deductible 30 days rental and gap , I spent 200 dollars on all brakes that I replaced at 70k mile , spent 24 dollars on sway bar end link that I replaced at 90k miles , spark plugs 7 dollars at 100k miles , engine coolant 4 dollars at 100k miles , set of snow tires 2!years ago that's has 2 more season left on it 280 dollars and I still have the stock tires that still good for another year or two , so if I look at the avatar driver that's drives 15k miles a year that would be 7 years of cost of ownership . That's like 1000 dollars maintenance cost in 7 years , I fail to see the 1000/ month cost . Unless you guys buy Volkswagen or another German or Chrysler cars


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## LA Cabbie (Nov 4, 2014)

Star Lord said:


> The cost of car ownership is very expensive. If you do the math and factor in EVERYTHING, you will see the reality. I have purchased many new $25k vehicles over the years, and I end up paying around $1,000 a month.. And that's with normal driving habits. And it's only going to get worse as the years go by.


Huh? My friend just bought a brand new Toyota Prius and his expenses from car payment to gas and insurance is well under $600. He drives just a few miles to and from work. He can actually take the metro and get there in the same time and save about $500 a months in car ownership fees, but he loves the freedom.


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## Star Lord (Oct 2, 2015)

LA Cabbie said:


> Huh? My friend just bought a brand new Toyota Prius and his expenses from car payment to gas and insurance is well under $600. He drives just a few miles to and from work. He can actually take the metro and get there in the same time and save about $500 a months in car ownership fees, but he loves the freedom.


Remember that it is only and average.. Some people will actually end up paying more than $1,000 a month depending on the vehicle they purchase, their driving record and their financing options... However...

It has come to my attention that most drivers and most people do not completely understand the automotive industry... I will be posting a new thread soon teaching people exactly how car maintenance, auto insurance and the car business works and the cost associated with them.


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## BillyTheKidd (Dec 22, 2015)

Star Lord said:


> Uber is the rideshare company with the master plan, and Lyft is simply following in it's big brother's footsteps. Anyways..
> 
> Uber wants to increase it's profits. But how does it do that? By lowering rates, so that more people will take more rides? YES.. Positively YES.
> 
> ...


Depreciation is not a monthly cost that you pay out of pocket.......that should not be included in the monthly cost of owning and operating a vehicle.


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## Star Lord (Oct 2, 2015)

BillyTheKidd said:


> Depreciation is not a monthly cost that you pay out of pocket.......that should not be included in the monthly cost of owning and operating a vehicle.


Nice catch!! Noted. Thanks !!


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## Cogburn (Jan 8, 2016)

BillyTheKidd said:


> Depreciation is not a monthly cost that you pay out of pocket.......that should not be included in the monthly cost of owning and operating a vehicle.


UhOh! If the Uber hating police squad catches you saying that they will come here, tar and feather you and label you as stupid, delusional and uneducated!

For some reason they don't grasp the concept that your car's value is never actually realized until you either trade it in or sell it. It is already accounted for anyway in the IRS standard mileage deduction unless you happen to be the rare driver who itemizes.


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