I am using Uber for this whole week and not using my personal car at all. I want to see the benefits of using Uber vs. driving your own car. It has been fairly established that  Uber is more cost effective than  buying a new car. But this blog is intended for those who already own a car and are driving it just because they own the car. I will do a cost comparison for that later. But I wanted to first highlight advantages of using UberX.

Note: These observations are from India and some of these might not work elsewhere. Also, these views are based on current rates of Uber. Not sure if they will hold true when their rates fluctuate. But again, petrol rates also fluctuate a lot in India hence that can also affect the decision.

• Lifestyle change - The decision to switch to Uber permanently than driving your own car involves a lifestyle change. Your car is not there with you anymore; not there outside your office waiting for you. You start walking a bit more.  You start depending on public transport more. There is no baggage of ensuring that your car is safe somewhere. 
• Parking - You don’t  waste time finding parking in mall or office. You don’t worry whether you will get parking space and you can focus on getting the work done. 
• Time utilization - You don’t drive your car. Hence you utilize the time in the taxi to read a blog you always wanted, connect with your friends, send mails. By the time you reach office, you have already caught up with your day’s work. 
• Conversations - If you have someone with you in the taxi, you can easily talk or discuss with them. Even if you are alone, you get to make great conversations with drivers. I have found most of the drivers cheerful and happy till now. 
• I don’t have to worry if I am stuck in traffic now, because even though I am in traffic, I can utilize the time to read up something. It costs me only Re. 1 per minute (based on current wait charges) if I stuck  in traffic. But I utilize my time a lot more for Re. 1. Totally worth it! 
• More cheerful - Since you are not driving the car in traffic, you are more cheerful when you reach office or when you reach home. Your legs/hands/back don’t pain from driving a car. You are mentally and physically better.

The way I see it, Uber is not providing you a car, it is providing you a driver. Everyone owns a car but very few people have their own driver. Hence Uber’s tag line in their app ‘Your private driver’. You get to share a driver for a month at 1/4th the salary of driver on your payroll. I think that’s the value addition that Uber gives. It’s not about the car, its about the driver. All the above things are possible because Uber is giving me an on-demand driver.

Now, coming back to the cost of owning a car vs. taking Uber.  

Few notes for calculation - I read this blog by Sam Altman and have referred his calculation.  I own Hyundai Santro, 2007 model. It gives me mileage of 11 km per litre of petrol and the current fuel cost is Rs. 68/litre in India. I would value my Santro at Rs. 1,50,000/- running in good condition. And I would apply a depreciation rate of 15% to my car in India. Also, my office is only 5 km away from  my home hence the cost of UberGo per km is Rs. 16.5. For longer trips in Uber, the cost would come down to Rs. 14 or even lower. 

Based on these facts, here are the figures: 

km  traveled per year 6000 insurance per year Rs. 6000 maintenance cost per year Rs. 6000 depreciation per year Rs 22500 parking per year Rs. 9000 petrol  cost per km Rs. 6 UberGo Rs 16.5 Total  Rs.79500 Rs 99000

So based on these figures, I am paying around Rs. 19,500 a year more for using Uber’s on-demand drivers. 

I changed these numbers above for Honda City, 2005 model, and compared UberX at rate of 18 per km. And the usage cost per year for Honda City is Rs. 112500 and using UberX for a year was Rs. 108000. I think Uber will be more cost effective if the distance traveled is more and it will be cheaper  if you are driving a mid size sedan like Dzire, Amaze etc. 

You can change the values above according to your vehicle. You could be running diesel, you could have more distance traveled per year, you could catch a different depreciation rate (even 10%). I compared UberGo because I drive a Santro. You could compare UberX. In any case, even if you have a small car like Santro or Alto in India, Uber would make more financial sense. If you want higher end cars, they have UberBlack too. 

So, you don’t need to own a car, no need to pay any EMI and yet  roam around the whole town. You don’t have to pay monthly salary to the driver and enjoy all the benefits mentioned earlier.  That’s good enough reason to switch to Uber.