Affording “Cars as a Service”
The autonomous automobile revolution can’t come soon enough for me. I hate driving and other drivers, and since I can’t afford to hire a chauffeur, I’m waiting anxiously for the day when driving as a human skill will go the way of knitting and baking bread: you can learn it for fun if you want to, but you’ll never need to do it again.
Much has already been written about the potential consequences of ubiquitous self-driving cars. Even better than owning a self-driving car, which would still be awesome, would be to never have to own a car again.
Think of it! I need to go to the store (for something I somehow can’t get drone-delivered). I pull up my “Cars as a Service” app and request the cheapest, quickest ride to Safeway, carpooling acceptable. As I get into line at the store to pay, I order a ride back home and request a dedicated car (can’t have the ice cream melting!) with trunk space for six bags. Maybe the service knows how long the line is to gauge the car’s arrival time correctly. Perhaps I’m even in Amazon’s store with no cashiers, and there’s a line of cars out front. Later, for a night out, I’ve pre-booked a ride to bring the babysitter to our house and a sports car to bring my husband and me to the theater and back in style — our robotic designated driver.
Self-driving cars will be available and street-legal within ten years, but will Cars as a Service be affordable by then, or only a luxury item? Given that I can’t afford that chauffeur, I wanted to know how soon it might be financially viable for me to have Cars as a Service — in other words, without changing my current transportation budget.
I added up how much my family spends on cars in a given year: insurance, repairs, oil changes, gas, car tabs, tolls, parking, and other incidentals. CaaS would replace vacation car rentals in many destinations, too, so I added that in, too. At first my total seemed impractically low, but then I realized I’d forgotten to include the cost of the cars themselves! Both our cars are paid off, but if you amortize that cost over their expected ownership, that added quite a bit to the total.
I found that the total, including amortized cost of the cars, was over $9,100 a year! That’s about $760 a month. We probably drive less than 10,000 miles a year (I have no commute now and my husband’s is seven miles each way), so our current spending comes out to more than 91¢ a mile — more than the cost per mile the federal government says you can deduct as unreimbursed business expenses. Not to mention that I’d probably be willing to pay slightly more than that for the convenience of being able to use most of my garage for storage!
Still, my current spending is much lower than the current cost of taxis or Uber. In addition to what individuals pay, CaaS services would have to account for costs of charging, cleaning, and whatever taxes government invents. However, with no drivers to pay, lower insurance rates because of fewer accidents, and decreased maintenance costs from having an all-electric fleet, it seems like the cost of CaaS will soon be well within reach of my current budget.
There you have it. To Uber, Lyft, Google, Ford and anyone else trying to get CaaS off the ground: your target is $1/mile total cost. Get there, and I’ll be first in line.
What does your car cost you? Here’s a public version of the calculator I used. Just fill in the green cells. You can either fill in the amortized cost section or put a year’s worth of car payments in the “Vehicle” cost cell. The commute calculator is just to help you guess your annual total miles.
