But it's not like his car payment magically disappears when he becomes a Lyft driver. Or magically stop having to carry insurance. It's a good estimate to use for cost, especially considering the author did not even own a car and would have to purchase one.
> But it's not like his car payment magically disappears when he becomes a Lyft driver. Or magically stop having to carry insurance.
Right, my point is that those costs are essentially fixed w.r.t miles driven, not that you wouldn't need those things. If you drive 36000 miles a year as a Lyft driver your car payment is still the same as someone who drives 12000 miles a year, whereas the author's model assumes the payment would be 3x as much. And re insurance, I know insurance companies take mileage into account in determining insurance premium, but it's certainly not the only thing in the formula.
Ah, I misunderstood. Yes, you are correct. I would use the US government's rate per mile, which comes out to about $17 for 30 miles. Unknown what components this is expected to include beyond fuel and wear/tear.
EDIT: Found further clarification. "The TDY mileage rates consider the fixed and variable costs to operate a car (gasoline, insurance, wear and tear, etc.) and are intended to reimburse the average expense of using a POC for the official government travel."
Drive 36k miles a year and the car will quickly have a resell value of 0 and repair costs become more frequent. Insurance is probably the only true fixed cost that benefits from scale
If you were going to approach this in a purely economic-rationalist manner, you'd (probably) discover that buying cars new is wasteful - and that you want to look for late-model full-service-history low-mileage second hand cars in the 2 or 3 year old range. The original owner will have borne the brunt of the capital depreciation, and you can drive higher-than-average-yearly-mileage for a few years while "low mileage" to "slightly high mileage".
(Where I come from, Australia, there are tax breaks that make 3 year old cars fresh off company-car leases pretty commonly available - many people structure their salary package in a way the strongly encourages them to lease a new car every 3 years, and off-load the previous one for often 35% of its original purchase price - and to have those cars get all their required dealer servicing done using pre-tax salary.)
I agree that repair costs and depreciation grow (probably roughly linearly) with miles driven, but those would have been factored into the $9100 median separately from the car payment.
I think what he means is that you cant turn those costs into a "cost per mile rate" since that rate will decline once you excedd 12000 miles assuming a bunch of the costs are fixed costs.
But I don't know, if you're exceeding 12k miles working for Lyft, im sure the cost/benefit analysis takes on a whole new life.
But he calculated his per mile costs using 12000 miles per year. A taxi driver is going to drive far more than that, so the fixed costs will contribute a smaller amount to the per mile cost.
