Purchasing a car is a long-term commitment that costs thousands of dollars, and can make a dent in your monthly expense sheet. For those living in congested urban areas, owning a personal car might be more of a burden than a blessing. Fortunately, the number of ride-sharing and car-sharing services available in the United States and other markets around the world is on the rise. If you want to save money on the go, think about some of the following options the next time you head out the door.
Ride-Sharing Presses the Taxi Industry
Whether you’re tired of the rates offered by traditional taxi companies or the lack of cleanliness in most of the vehicles, you’re in luck. Uber and Lyft are two ride-sharing/ride-hailing services that operate in cities across the United States. In fact, the two businesses command the marketplace in this niche, creating a major confrontation with taxi services, especially in the form of the Uber-taxi battle.
Call it an Uber, a taxi, or an Uber taxi, but whatever you call it, it’s an exciting alternative. With a smartphone app in your hand, you can quickly find drivers in your area (based upon your phone’s GPS), hail a ride, and receive confirmation with an ETA time, make/model of the car, and snapshot of the driver. Lyft offers similar features.
The goal is to provide people with a flexible alternative to taxi services, especially in major cities where fares are high and demand makes it difficult to hail a cab. The question is, are you saving any money?
The answer to this might depend upon where you live, but in a city such as Reno, NV you can actually save a significant amount compared to a taxi ride. The average cost to catch a taxi in Reno is $.75 for the flat drop and $3 per mile after. Uber’s cost is $2.40 and $1.85, respectively, plus a $1 safety surcharge. A five mile ride, at these rates, works out to $18 plus tip in the taxi, compared to $13 in the Uber.
Uber and Lyft are, on average, less expensive than traditional taxis. In fact, both companies just lowered prices earlier this year. The greater benefit is the flexibility of hailing a ride, seeing a driver before pickup, and paying, all from the app.
Car-Sharing Rises to the Challenge
The concept of car-sharing is nothing new. Every time you rent from the likes of Hertz and Avis, you’re sharing a car and the cost of purchasing it originally with every other driver that uses those services over the course of time. The difference in start-up and niche car-sharing services is the pricing and flexibility.
Traditional rental car companies have higher rates, some charge by the mile, and the minimum time frame in most cases is one day. Car-sharing arose to meet the need of Millennials in big cities who needed a car for just a few hours from time to time, but didn’t want to pay the full-day charge of a rental company.
Car2Go, Turo, and Zipcar are examples of major names in the car-sharing business. Rather than hailing a ride like ride-sharing/ride-hailing services, you pay an hourly fee to rent a vehicle. In some cases you’ll be told the location of a car, which is often in a controlled lot with a lockbox of keys or an attendant to provide access. Turo is expanding its service to offer an Enterprise-style pick up where a representative brings the car to you.
There is an in-depth explanation of the costs here, but in short, a service such as Zipcar charges $8.10 per hour Monday through Thursday and $9 per hour on the weekend to rent a vehicle. Use the vehicle to run errands or complete one-time tasks (picking up new furniture or larger packages for delivery, as an example) and simply return it when you’re done.
Zipcar doesn’t charge for gas and parking, which adds an incentive to using the service, and the cost of the vehicle itself can be as little as $144.30 for one-time use. The value of it depends on how frequently you need a vehicle and what you’d use it for.
When to Use Ride-Sharing and Car-Sharing Services
Finally, if you want to get the maximum value for each service, make sure you are using it in the right circumstances. As a more affordable and flexible alternative to taxi cabs, Uber and Lyft are great rides to and from the airport, getting around cities you’re visiting and unfamiliar with, or reaching parts of a city with poor transportation systems.
Conversely, car-sharing is excellent when you have longer trips and want to avoid per-mile fees or want to run errands that involve multiple stops. There is a way for both of these services to save you money on the go, so long as you use each in the right situation.
Chad Fonger has been driving for rideshare companies for many years including for services such as Lyft and Uber. He strives towards sharing his experiences and helpful information with his popular comprehensive blog, which goes in-depth about the dynamic and ever-growing rideshare industry.