Ride-Hailing vs. Car Ownership: Which Costs More?

AAA analysis finds surprising difference in annual costs for two transportation models

ORLANDO, Fla. -- Uber, Lyft and other ride-hailing services have grown in popularity in part because of consumers’ perception that they avoid many of the costs of vehicle ownership. But a recent AAA analysis finds that ride-hailing is not a cost-effective substitute for owning a car, even in urban markets.

According to an analysis by the AAA Foundation for Traffic Safety, the average urban driver logs 10,841 miles per year. Using ride-hailing services as the primary mode of transportation costs $20,188 per year, or $1.86 per mile. AAA based its ride-hailing cost estimates on data from 243,838 single-rider, economy trips in 20 urban markets. Ride-hailing users paid an average of $13.15 per trip, which lasted 15.11 minutes and covered 6.66 miles.

The average cost of owning a medium-size sedan, including fuel, insurance, parking and the vehicle’s purchase price, was $10,049 per year, or 93 cents per mile—about half of the cost of ride-hailing. For vehicle ownership in an urban area, parking is a major cost. AAA found costs for flat-rate parking ranging $706 per year in Phoenix to $8,088 in New York, with an average of $2,728. City dwellers who have access to free parking are paying three times as much as they would than if they owned a vehicle.

As part of the analysis, AAA examined ride-hailing costs in 20 cities, based on an average of 10,841 miles driven per year. It also factored in the cost of 11 days worth of car-rental costs for long car trips. Boston had the highest annual cost at $27,545, while San Diego had the lowest at $17,316.

“For those who travel a very limited number of miles annually, or have mobility issues that prevent them from driving a personal vehicle, ride-hailing can be a viable and important option,” said John Nielsen, managing director of automotive engineering and repair for AAA, Orlando, Fla. “But for everyone else: The car is still king.”

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