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Old 1st July 2015, 11:18   #31
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Default re: Economics of car ownership in light of the new services (Uber, Ola, Zoom)

Quote:
Originally Posted by Cowardly Lion View Post
http://www.firstpost.com/business/ub...p-2317118.html

From the article -

Consider the costs and benefits of owning car.
#1: You are buying a depreciating asset. This is a cost few buyers take into account while buying a car
#2: You have maintenance and related costs: quarterly servicing, accidents and repairs, loan servicing costs (EMIs), parking and annual insurance.
#3: Then you have running costs: you have to pay for the fuel, parking (both at home and where you work), and possibly keeping a driver.
Cowardly lion (what a user ID!!!): the article talks only about cost aspect.
Which is incomplete. If someone has to make an economic calculation, someone will also have to see the VALUE.

Eg: it costs 2 lakhs to own a Nano not only because of raw material cost of steel/plastic/glass/engine/transmission etc - but the whole package brought together in usable working condition along with the "prestige/pleasure" it brings to the owner is worth 2 lakhs.

It costs 20 lakhs to own a Superb not only because of raw material cost of steel/plastic/glass/engine/transmission etc - but the whole package brought together in usable working condition along with the "prestige/pleasure" it brings to the owner is worth 20 lakhs.

On cost basis it would be absurd to think that people would buy Superb over a Nano. But someone making such a judgement is not looking at the economic picture. Value drives the sale/deal/purchase and therefore the price, not the cost.
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Old 1st July 2015, 12:17   #32
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Default re: Economics of car ownership in light of the new services (Uber, Ola, Zoom)

My 2 cents on this:

Car ownership is not just about point A to B commute. Even people who use the taxi services very heavily (like I do), still need to have a car for long drives. There is absolutely no fun driven around in a taxi - it is only and only for saving some hassle driving around the city.
For the highways, I always drive me own car.
Then there is the safety aspect - I will always trust my car more than a taxi. Even self driven cars are very rarely top end cars with Airbags and ABS.
And then, your car is an expression of freedom. Once you are hooked onto it, you wouldn't ever go the other way.

Economics should not be the only consideration.
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Old 1st July 2015, 12:59   #33
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Default re: Economics of car ownership in light of the new services (Uber, Ola, Zoom)

Purely from an economics point of view, if such a scenario existed 5 years before I wouldn't have added the Chevy Spark as a 2nd car in our garage. It's rarely used by my dad or wife; the car has done only about 15000 Kms in 5 years. People at home prefer to take an Ola or Uber considering the traffic and parking issues within the city.

3.5L for the car, plus maintenance, insurance, add sun-film then remove sun film, detailing, petrol, parking two cars at home..phew. All this for a 2nd car which only did 15000 Kms in 5 Years? I could have just had one car and done something nice for the Fiesta instead.

Note: It would have been a different story if the Spark was bought with a heart instead of the head :P

Last edited by kiku007 : 1st July 2015 at 13:01.
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Old 1st July 2015, 15:03   #34
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Default Re: Economics of car ownership in light of the new services (Uber, Ola, Zoom)

Lovely thread! Thoroughly enjoyed reading through the comments.

I think some of us have missed the impact of Uber, Ola, Zoom Car, Myles and others. Can they replace the first car of the house? No way, especially in India where infrastructure is so poor. Plus, in India, a car is a status symbol, a sign of 'having arrived'. After home ownership, car ownership is the dream of every Indian. The low penetration levels (30 - 40 cars / 1000 citizens vs 600 - 700 / 1000 in the USA) show that first-time car buyers will drive sales.

That said, can an Uber or Zoom replace the 2nd / 3rd / 4th car of the house? Absolutely yes. The more cars you have in a house, the lesser the last one is used. Ask me, I have 4 cars and have to actually instruct my driver to start one every alternate day. Uber or Zoom can definitely replace the concept of having multiple cars in the same family.

Lets also not overlook the fact that, in developed countries, the youth couldn't care less about car ownership. They'd rather rent. iPhones & experiences interest them more. Ironically, car makers are getting in the sharing business - related thread.

It's a trend that's here to stay. It's a trend that'll only gain momentum with time.

Lastly, the likes of Uber & Zoom have brought a better commuting experience to thousands out there who don't own cars.

Quote:
Originally Posted by civic-sense View Post
Just today morning, I booked an Ola from the service station. The driver called, asked where I had to go, and then refused. His justification, he won't get a return ride from there. He asked me to cancel. I said, "you do it". Booked again, this time a smaller cab. The driver calls up, and says, he is too far from my place.
These experiences are far & few between, and the new generation services will improve with time. I could similarly say "one morning, my own car didn't start because of a flat battery. Uber makes more sense to me".

I've used Uber & Ola a 100 times in the past year and have had a positive experience 95 times.

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Originally Posted by sourabhzen View Post
My Swift is about to complete 1,00,000 km run in a couple of days time. When I installed Maruti's App on my phone, I did a broad cost analysis of my ownership. I considered the following for analysis
Don't overlook the opportunity cost. Assuming you paid 6 lakhs for your Swift in 2008, it could have swelled to 12 lakhs today (even in investments that have suitably spread out the risk). How many ever numbers you crunch, car ownership is a very, very expensive affair.

Last edited by GTO : 1st July 2015 at 15:07.
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Old 1st July 2015, 15:26   #35
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Default Re: Economics of car ownership in light of the new services (Uber, Ola, Zoom)

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Originally Posted by GTO View Post
Don't overlook the opportunity cost. Assuming you paid 6 lakhs for your Swift in 2008, it could have swelled to 12 lakhs today (even in investments that have suitably spread out the risk). How many ever numbers you crunch, car ownership is a very, very expensive affair.
I did took that into consideration. In fact, I did that exercise for a colleague of mine who wanted reasons for not buying a car. He wanted my help on listing pros and cons of buying a new one. Based on the calculations, he has decided to stay away from this 'expensive affair' for now.
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Old 1st July 2015, 23:38   #36
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Default Re: Economics of car ownership in light of the new services (Uber, Ola, Zoom)

GTO is bang on. It's not the first car that these taxi services will replace but the second/third/nth car.

I have a Mitsubishi Cedia that (sadly for me) my wife uses 80% of the time. I have been considering getting the new Honda Jazz (to reclaim my Cedia) for a while now, and I think I will keep considering it for the next five years while taking Ola and Uber and Meru cabs into town.

In my case at least, Honda has in all likelihood lost Rs 3-5 lakh in revenues to Uber/Ola. And my retirement corpus has grown a little bit faster.

Last edited by Car Fan : 1st July 2015 at 23:39.
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Old 2nd July 2015, 10:34   #37
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Default Re: Economics of car ownership in light of the new services (Uber, Ola, Zoom)

Indeed owning a car makes no economic sense today. I bought my current car about five years ago but the chances are high that I will never buy another one. I mostly bicycle to work. When I travel to other Indian cities I take taxis or public transport, and it is fast and cost-effective these days. When I lived abroad (Paris and New York) I didn't own a car and never considered getting one. The reason many people commenting above think of their cars as "second homes" etc is that they don't have to pay significant parking charges! A car occupies about 8-10 square metres. When you park on the road, as CSE and others have pointed out repeatedly, you are effectively getting that much land rent-free. Implement pay parking on all streets, at fairly stiff rates (reflective of rents in the area), the way it is done in developed countries, and the car mania will reduce overnight.

Yes, now and then it is really convenient to have your own car and not depend on Ola. Does that happen often enough to justify the expense and hassle of maintaining one? For some, maybe, for most of us, surely no. It would make more sense to rent a self-driven car when we need it.
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Old 2nd July 2015, 11:27   #38
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Default Re: Economics of car ownership in light of the new services (Uber, Ola, Zoom)

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Originally Posted by rsidd View Post
The reason many people commenting above think of their cars as "second homes" etc is that they don't have to pay significant parking charges! A car occupies about 8-10 square metres. When you park on the road, as CSE and others have pointed out repeatedly, you are effectively getting that much land rent-free. Implement pay parking on all streets, at fairly stiff rates (reflective of rents in the area) the way it is done in developed countries, and the car mania will reduce overnight.
That is very true my friend. Parking in the street is free in most (may be all) Indian cities and if we have to pay for that, the economics will change drastically to the point people will think twice about owning cars without owning dedicated parking space.

However, coming to think of it, most individual houses (of people who can afford a car) nowadays has dedicated space for car parking. Almost every apartment provides parking space to the residents, at least for one car. If we are talking about parking when we go out - offices, malls, restaurants, cinemas all have dedicated parking areas (paid or free). The problem is valid only for people who do not have dedicated parking area in their residence and in other places they visit.

Coming to cabs / self-driven rented cars - even they have to be parked somewhere, correct? If all parking spaces become paid, that cost will obviously have to be paid by the customer (directly or indirectly) - so effectively it will even out. Even now, all cabs have this clause which mentions that parking fee has be paid by the customer. Think of the peak time surcharges of 1.8X, 2.1X, 2.7X some cabs charge nowadays - this is how they take returns of the investment they made to gain the customer base. In the coming days, the fares will keep increasing and if they need to sustain the business model.

Again, India is no Singapore where there is absolute space crunch and each inch of free land has infinite value. Even in the US, I have lived / traveled in cities like Dallas, Houston, Atlanta, Tallahassee where there is free parking in almost all places. Only in super crowded cities like New York and tourist places like Miami, we had to pay to park anywhere. The parking charges would change based on season / demand / time of the day, etc. But that is understandable - so many people and so less space. Such situation exists in very few Indian cities though.

P.S. I am speaking on the backing of my experience and not based on any statistics. If I am wrong, please educate me with the facts.

Quote:
Originally Posted by rsidd View Post
Yes, now and then it is really convenient to have your own car and not depend on Ola. Does that happen often enough to justify the expense and hassle of maintaining one? For some, maybe, for most of us, surely no. It would make more sense to rent a self-driven car when we need it.
I think it is the reverse my friend - Now and then it is really convenient to depend on Ola and not own a car. For some, always depending on Ola / Zoom and others maybe is convenient, for most of us - surely NO. When you have a kid and you need to rush to a nearby hospital - would you call an Ola and wait for 15-20 mins? If you come home early from office and decide to go for a dinner / movie outside with wife and kid - would you book a Zoom, pick it up and then go?? If your friend calls up and tells his car broke down and calls me to pick up his family safely - would I suggest him to book an Uber instead?? I would rather not. There are many other situations when no service can replace the convenience of owning a car. Like many others have commented, these services can definitely replace the hassle of owning additional cars though.

Most of us here commenting that new services will replace owned cars have been only speaking from the Urban perspective. Step out of the Big cities - there is no Ola, no Uber, no Meru. In smaller cities you might find one Fasttrack and few other small service providers. But step into proper towns and villages - there are MANY such in India and there self owned cars cannot be replaced at all.

Even in the US, only in cities like New York where at any time of the day / night you can step out to the street, call out for a taxi and expect him to drop you wherever you want without asking for meter mela kaasu (Extra money over and above meter charge). In most other cities, you have to call for a cab, wait for it to come over and pick up - no wonder they prefer to own cars.

I would wait for a day when public transport is safe, reliable, well connected and available at all times to let go of a self-owned car.

Note: Sorry for the extremely long post, but I found it necessary to state the alternate perspective effectively.

Last edited by Vigkey : 2nd July 2015 at 11:28.
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Old 2nd July 2015, 15:20   #39
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Default Re: Economics of car ownership in light of the new services (Uber, Ola, Zoom)

Even if it was cheaper and safer and convinient and what not, for me, it's impossible to ditch my car and hail a cab every time.
You see I work in gurgaon and stay in Dharuhera (that's 50km) and be it OLA, be it Uber, they are unwilling to leave the NCR region.

Once after a long and tiring work day I decided to call a cab instead of driving to head back home. Waited for an hour and a half flat but could not convince the cabbies to drop me home. Finally took a cab from Shankar chowk to my office and drove home.

So yes, I'm willing to take the depreciation hit for the sake of convenience and freedom.
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Old 2nd July 2015, 15:31   #40
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Default Re: Economics of car ownership in light of the new services (Uber, Ola, Zoom)

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Originally Posted by MaheshY1 View Post
Even if it was cheaper and safer and convinient and what not, for me, it's impossible to ditch my car and hail a cab every time.
You see I work in gurgaon and stay in Dharuhera (that's 50km) and be it OLA, be it Uber, they are unwilling to leave the NCR region.
Matter of time really. Pune Uber drivers are already accepting drives to Lonavala, for example. My last driver told me this. When I asked, should I choose the Uber Intercity option? his reply was No- even the regular UberX or UberGo option will work as long as I enter Lonavala clearly in the destination tab while booking.
Lonavala is about 60 km away on the Mumbai highway and a hot weekend destination. Nice to know one has options!
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Old 2nd July 2015, 15:43   #41
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Default Re: Economics of car ownership in light of the new services (Uber, Ola, Zoom)

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Originally Posted by MaheshY1 View Post
Even if it was cheaper and safer and convinient and what not, for me, it's impossible to ditch my car and hail a cab every time.
You see I work in gurgaon and stay in Dharuhera (that's 50km) and be it OLA, be it Uber, they are unwilling to leave the NCR region.
Ive experience the opposite. They never accept 3-4 kms trips. But they are happy to do long distances. Apparently half hour before and after the trip drivers do not get any other bookings. So, for 15 min trip they are idle for more than an hour.

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Originally Posted by MaheshY1 View Post
So yes, I'm willing to take the depreciation hit for the sake of convenience and freedom.
I agree with you. Its become more of a necessity.
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Old 2nd July 2015, 15:53   #42
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Default Re: Economics of car ownership in light of the new services (Uber, Ola, Zoom)

It's quite suprising to see such an intense discussion about whether cars make economic sense or not on this forum!! Come'on guys, this is Team-BHP!! Don't we all love driving, cars and are passionate about all things automotive?
If your answer is a 'Yes' then IMO there's absolutely no point in discussing the economics of buying / owing a car, because there are several other products where we freely splurge loads of moolah - most of those can easily debated!! Ex. Vacations / Shopping Brands / Restaurants / Mobile Phones -- the list can go on and on!
Cars are, just like several other products we use daily, a depreciating asset and it all depends on the individual buyer / user's situation which will decide whether the purchase makes economic sense or not! To each his own!
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Old 2nd July 2015, 16:09   #43
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Default Re: Economics of car ownership in light of the new services (Uber, Ola, Zoom)

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Originally Posted by Vigkey View Post
However, coming to think of it, most individual houses (of people who can afford a car) nowadays has dedicated space for car parking. Almost every apartment provides parking space to the residents, at least for one car.
If you are building your own house then of course you can plan a parking spot when you build it. In apartment complexes the car parking spot does not come for free! It costs Rs 1-2 lakhs typically on top of the apartment cost. If as a tenant you're not paying directly, you're indirectly paying higher rent corresponding to this. But this is fine in my opinion. What is not fine, but quite common in Chennai at least, is watchmen at big houses on public roads in Chennai telling people they can't park on the public road near the house because saab's vehicle will come soon! The corporation needs to make it clear who owns that space (answer: the city) and charge people for using it, whether it's the house owner or anybody else.

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Originally Posted by Vigkey View Post
If we are talking about parking when we go out - offices, malls, restaurants, cinemas all have dedicated parking areas (paid or free).
I don't know about you but when I go out I generally park on the street and walk. Yes, sometimes we may go to cinemas or malls or restaurants with valet parking, but that's not the usual case. And because street parking is free or dirt cheap, finding a spot can take a while. (This is part of the reason I've taken to cycling when I can!)
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Old 2nd July 2015, 16:24   #44
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Default Re: Economics of car ownership in light of the new services (Uber, Ola, Zoom)

Just after reading the first post of the thread, i could guess what the following threads would reflect.

A perfect article for a daily newspaper / magazine, forcing a middle class family into reconsidering their decision of buying a car.

But this is team-bhp. We "LIVE TO DRIVE", "LOVE CARS, LIVE CARS". So the posts were inline with my guess.

+1 vote for the owing experience.
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Old 2nd July 2015, 16:32   #45
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Default Re: Economics of car ownership in light of the new services (Uber, Ola, Zoom)

These app based aggregators have been a recent entrant in Kolkata, where most of us were fed up with the whims of the union backed Yellow Cabs. However, with their entry, there has been a very quick shift in the mindset of the public who now prefer App Cabs to the normal yellow cabs. So much so, that the taxi unions recently went on a strike to protest against these app cabs as well.

I've been an aggressive user of the App Cabs ever since they were launched and my goal has been simply to take the stress out of driving. While I NEVER used Taxis earlier owing to fears of being robbed, cheated or beaten black and blue, The App Cabs experience had the following results:

THEN: Earlier had employed a driver to drive my second car. My wife's job entails her traveling to crowded areas and markets all through the busy rush hours and hence finding parking and then paying for it was a huge cost. Sample this, the driver salary was around Rs 10000/ month with an annual one month bonus and leaves. Car parking charges were around Rs 40/ trip with an average of 3 trips a day. That led to around Rs 2500/ month.

NOW: The 2nd vehicle remains, however, now the wife drives herself to office and keeps the car parked there. For the client/ market visits she uses an UBER which has no parking charges or related driving costs. On an average, she spends around Rs 120/ trip, so with an average of 3 trips a day, the monthly UBER charges are around Rs 9000

While the Apps can never replace my 2 cars, what they can do is supplement them and allow me to use them only for driving that is relatively "stress free" (If something like that exists). Quick jaunts from one place to another can be easily done without the hassles associated with taking the car.

However, I do not agree with some other members stating that parking costs etc can be reduced. For ex: If i buy a flat, I will surely buy it with 2 parking slots at least since they are eventually also turning into assets.
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