AAA Says Buying a Car Still Cheaper Than Utilizing Ride-Hailing Services on a Consistent Basis

By  //  August 22, 2018

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despite high parking costs, car ownership cheaper for urbanites

Ride-hailing continues to gain popularity in urban markets across the United States. With the increased use of ride-hailing, AAA evaluated the cost of utilizing these services as a primary mode of transportation. (Image by AAA)

(AAA) – Ride-hailing continues to gain popularity in urban markets across the United States. With the increased use of ride-hailing, AAA evaluated the cost of utilizing these services as a primary mode of transportation.

The purpose of this research is to give consumers a common-sense perspective on cost-effective transportation options.

According to the AAA Foundation for Traffic Safety, the average driver in an urban area – the only setting in which using these services are a practical full-time transportation option – drives 10,841 miles per year.

While urban drivers travel fewer miles than those living in smaller towns or rural areas, relying on ride-hailing services as a primary mode of transportation would cost $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.

“In order to make an informed decision on which option would be most cost effective, it’s important that consumers understand the definition of ride-hailing,” said Matt Nasworthy, Florida Public Affairs Director, AAA – The Auto Club Group.

“Ride-hailing is when an individual requests transportation for their self and they pay the associated ride fare. Examples of these services include traditional taxis, calling a car service or requesting a car and driver from an app on your phone. Sharing a ride and the associated fare with friends or carpooling is referred to as ridesharing, not ride-hailing.”

For the study, AAA analyzed the costs of ride-hailing services (including the use of an occasional rental car) in 20 major urban areas.

Based on the average number of miles traveled by city-dwellers, annual ride-hailing costs are as follows:

Atlanta $17,741 Nashville $26,397
Austin $19,821 New York  $21,279
Baltimore $19,917 Philadelphia $23,201
Boston $27,545 Phoenix $17,436
Chicago $22,020 Pittsburgh $18,940
Cleveland $20,091 Salt Lake City $18,866
Dallas $16,944 San Diego $17,316
Denver $20,434 San Francisco $21,972
Los Angeles $17,951 Seattle $23,951
Miami $17,339 Washington, D.C. $21,093
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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.

Understanding that parking costs can be a major ownership expense for those living in urban areas, AAA also analyzed the costs of flat-rate parking per year, which ranges from $706 (Phoenix) to $8,088 (New York), 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.

Vehicle owners looking to minimize their operating costs should consider the following:

  • Buy (gently) used – Depreciation is the single largest expense for vehicle owners. By driving a pre-owned vehicle in good condition, ownership costs are significantly lower. A safe, reliable vehicle can be found at an attractive price point. AAA members who purchase their vehicle through AAA save $3,383 off MSRP † on average and receive auto loan rates as low as 2.74 percent*. Click here for more.
  • Fuel responsibly – Avoid wasting money on premium gasoline unless your vehicle specifically requires it and, if you’re one of the 20 percent of Americans considering an electric car, these vehicles offer lower fuel and maintenance costs.
  • Show your car some love – It sounds counterintuitive, but spending money on routine maintenance can actually save you money in the end. To keep engines running longer, consider switching to synthetic oil and upgrading to TOP TIER™ gasoline.
  • Slow down – When gas prices are high, small changes in the way you drive can make a big difference
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To determine the average number of miles traveled by a city-dweller, AAA’s analysis 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. Full methodology can be found in the study’s fact sheet.

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