Should you buy a car in the age of Uber and Ola?
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Should you buy a car in the age of Uber and Ola?
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By Riju Dave, ET Bureau | 9 Nov, 2015, 08.00AM IST
Let us compare the total cost of owning a Rs 4.78 lakh car (Maruti Suzuki Swift LXi, petrol,
manual) in Delhi, and hiring Uber or Ola cabs over a period of three years.
FOR SALE
Cost of ownership:
Cost of car: Rs 4.78 lakh (ex-showroom)
Loan cost (Interest rate: 9.55%; loan term: 3 years) Down payment Rs 47,800 + Down
payment Rs 47,800 + Loan interest Rs 66,232
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Annual average insurance cost: Rs 12,000 Total insurance cost Rs 36,000 (3 years)
Registration/taxes: Rs 72,000 (3 years)
Annual maintenance cost: Rs 15,000 Total maintenance cost Rs 45,000 (3 years)
Running cost monthly distance covered: 1,000 km Petrol cost: Rs 60.7 /lt Mileage: 18 km/lt Monthly running cost Rs 3,368.85 Total
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running cost Rs 1.21 lakh (3 years)
Parking/miscellaneous charges: Rs 50,000 (3 years)
Total cost of owning in 3 years Rs 8.68 lakh Total cost of owning in 3 years Rs 13 lakh (with chauffeur @ Rs 12,000 a month)
Minus car resale value after 3 years Rs 2.5 lakh
Net cost:
Rs 6.18 lakh Rs 10.5 lakh (with chauffeur @ Rs 12,000 a month)
FOR HIRE
Cost of hiring
Assumptions: Daily total distance covered: 33.3 km Daily trips: 2 Time taken in each trip: 45 minutes Tolls, tax and surge pricing not
included.
Uber Go
Charges for rides Base fare: Rs 40, Per minute: Rs 1, Per km: Rs 7
Cost of hiring Uber Go: Rs 80 + Rs 90 + Rs 230 = Rs 400 per day
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Total cost: Rs 4.32 lakh (3 years)
You save: Rs 1.86 lakh, without chauffeur in 3 years (Rs 6.18 lakh - Rs 4.32 lakh) Rs 6.18 lakh, with chauffeur in 3 years (Rs 10.5 lakh Rs 4.32 lakh)
Ola Mini
Charges for rides Base fare: Rs 100, Per minute: Rs 1, Per km: Rs 8
Cost of hiring ola mini: Rs 200 + Rs 80 + Rs 202 = Rs 482 per day
Total cost: Rs 5.2 lakh (3 years)
You save: Rs 98000, without chauffeur in 3 years (Rs 6.18 lakh - Rs 5.2 lakh) Rs 5.3 lakh, with chauffeur in 3 years (Rs 10.5 lakh - Rs
5.2 lakh)
ET Wealth analysis
It is clear from the above calculation that hiring an Uber or Ola will be lighter on your pocket, though the savings are lesser for self-driven
cars. So, weigh the benefits and drawbacks of owning a car (see What money can't buy...) before taking a decision.
What money can't buy...
If you own a car
Sense of ownership: Nothing quite compares to the feeling of buying and caring for your own car.
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Convenience: There's no hassle of booking and waiting for the cab. A taxi can't match the instant access to your own car.
Holidays & emergencies: Random, weekend road tours or a rush trip to the doctor are definitely easier with your own car.
Safety: With cases of misconduct by drivers, it's safer, especially for women, to drive on their own.
If you hire a car
Better use of time: If you don't have a chauffeur-driven car, the cab can help you save time by catching up on your office mails and
calls.
Long commute: In metros, where traffic snarls can be a nightmare, it's best not to be behind the wheel, especially during peak hours.
Navigation: If your sense of direction is marginal, it is easier to leave the complicated routes to the driver, particularly in metros.
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