Reader Question: Is Ride-Sharing Such a Bad Idea?

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Here’s the latest reader question, along with my reply! 

Cindy asks: I’ve read several articles of your criticizing ride-sharing and I’m wondering why you think it’s such a terrible idea? It seems like a good idea to me (I am 24 and live in a city).

My reply: I always have to unpack this! Just as I am not opposed to electric cars, per se, I am not opposed to ride-sharing, per se. I am opposed to the forces trying to force both things down our throats – and that’s a separate matter.

I agree with you that ride-sharing can make sense for someone such as yourself, who lives in a place where owning car may not make sense, both in terms of economics as well as convenience. But it doesn’t make sense for others – and before you decide which category you are in, I’d recommend doing the math. Figure out how much you’d spend to subscribe t a ride-sharing service and then compare that with what it would cost you to own a modestly priced used car (something in the $5,000 range – which will get you a mechanically sound little car such as an older Corolla or similar) over time.

Keep in mind that ride-sharing is fee for service. What you spend is gone. While a car will depreciate in value it will also hold value as well. And that value is fungible – meaning, in a pinch, you can convert its value to cash for some other purpose if you need to.

There is also value, arguably, in convenience and control. When you own a car, it is yours to use as you like and when you like – no waiting and no being driven by someone else, who drives as they like.

As a general thing, I oppose anything that bleeds wealth – especially from young people trying to build it – and ride-sharing does exactly that. Let’s say you spend $150/month to ride share. At the end of the year, you’ve spent $1,800 and have literally nothing to show for it other than the memory of the rides. Over six years, you’ll have spent more than $10k in this example.

If, on the other hand , you’d bought the $5k used Corolla you’d have saved several thousand dollars (even factoring in maintenance and peripherals such as taxes and insurance) and you’ll still have the car, which will probably still be be worth $2k or so, assuming it still runs okay (which it probably will).

I get that there is freedom in not having to worry about a car – about where to park it, having to maintain and fix it. Those are valid concerns. But ride-sharing isn’t free, either – and it may end up costing you more than you think!

. . .

Got a question about cars, Libertarian politics – or anything else? Click on the “ask Eric” link and send ’em in!

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1 COMMENT

  1. I keep up with the news and ride-sharing has become dangerous since so many people are providing the service. Women getting raped and sexually assaulted and so far, on one of the most egregious cases, Uber has done next to nothing about it. It finally took a police rape kit(sure that’s fun)for one women to be believed and action taken. The driver drove from NYC to NJ to a roadside park where he dropped her off to 4 men waiting for her. They were figuring she was too drunk and who’d believe the story I guess. I won’t try to guess that mindset. She was raped multiple times and the drivers is still free as are the rapist. This is not an isolated incident.

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