From the Desk of Paul

Do we need to own cars anymore?

I want to explore this psychological phenomenon taking the world by storm – the ‘uberfication’ of life.


Paul Betti,
Founder, Australian Financial Advisers (AFA)

As humans, we will gravitate to anything that:

  • Buys us time
  • Creates convenience
  • Saves money

That is the real driver of the ‘disruptor of change’.

If there is a need and people want it, then it becomes an opportunity.

Who uses google maps? Who doesn’t? What about all the people who lost their jobs because we no longer use UBDs that weighed a kilo and sat in the glove box all year? All the printing factories that have closed down? Think about it … just another example of ‘Uberfication’! We never gave google an ounce of negative publicity when that was happening!

The ride share business called ‘Uber’ is one such opportunity that has sprung onto the world stage of disruption. Let’s explore it some more.

  • We book a car using our phone
  • We hop into a clean car
  • We go somewhere
  • We hop out
  • We walk away
  • Money changes hands at a cyber level.
  • No wrestling for car parking
  • No standing in line at taxi ranks
  • Quick, easy and affordable
  • Available to the masses
  • A great experience

People are starting to question the merits of owning a car altogether and becoming part of the phenomenon called ‘ride share’.

With not owning your own car it brings benefits, namely:

  • No rego
  • No insurance
  • No car payments
  • No flat tyres
  • No replacing tyres
  • No wear and tear
  • No 2-car garages
  • No cleaning cars on weekends
  • No servicing
  • No parking fees
  • No speeding fines or parking tickets
  • No non-deductible car loans
  • No depreciating assets
  • No stamp duty
  • No roadside assistance or break downs
  • No running out of fuel
  • No fuelling up
  • No getting into the car with an empty fuel tank after everyone else has run it dry
  • No prangs, scratches or dents
  • No frustration or road rage, no losing points or licence!

Let’s explore the opportunity cost (or saving) of ride share Vs owning a car.

Let’s say we take 2 trips a day at $20/trip 6 days a week, that tallies to $240 and say 2 trips on Sunday to the pub and back $30 each way. That’s $300/week or $15,600 per year.

Most will think ‘we would never spend that much’ or ‘we wouldn’t spend that on owning our own car’! Let’s assume this is the higher end of ride share use.

Now let’s do the numbers on owning a car.

  • Mid-range car $30k on road
  • Insurance $750/year
  • One set of tyres $600/year
  • Fuel $4500/year
  • Car payments $140/week – $7280/year
  • Two speeding tickets and two parking fines $400/year
  • Rego each year $800/year
  • Parking fees (random street parking) $400/year
  • One mechanical service per year $500/year
  • Car washing/cleaning $400/year
  • Road side assistance $400/year

Total $16,000/annum

The car you bought for $30k 5 years ago, is now worth $10k on trade in. That’s $20k depreciation over 5 years or $4000 per annum. This brings the total cost per annum of owning a car in your name $20,000!

Ride Share (car is in someone else’s name, however does exactly the same thing) $15,600.

Savings over-all per annum to you is $4400.

That’s a real $4400 in your pocket … and lots of convenience!

It’s a balance between feeling good and feeling convenience.
One also saves money.

Now the convenience of connecting to a Ride Share…

The great thing is we can go to an app, no cost of a call or being told, “please hold, the next available operator will be with you shortly.’ I mean really? I’m VIP, or that’s what the cab card says I am…”

With the ride share app, You know instantly how long you need to wait before your car arrives so you can go about multitasking, if you have to wait 10 minutes, cancel and re order..
Options, choices, control.

Happy people greet you and engage in discussion if you choose to do so, and they never take personal calls while you own the time between destinations!

The drivers are always offering you something, little things like mints, water, sweets or cans of tuna (he was Italian)! Nice little touch, kind of like warm face towels on an aeroplane. It costs nothing yet the experience is long lasting.

When the trip is finished, you simply get out. You see the cost on your phone device, you forward it to your accountant if it is a work related expense, no waiting for the eftpos machine to work and no paper receipts!

Effective efficient and simple.
Makes you want to go back for more!

This is not a plug.
It is the new world we live in.

‘Uberfication’ is happening everywhere, accommodation, newspapers and banking to name but a few industries, are all set for  major disruption, these industries will all be reinvented. And they know it is coming.

Uberfication is now a ‘word’ in Wikipedia, the online dictionary, a disruptor that killed Encyclopaedia Britannica.

Digital disruption is not a revolution between industries, it is an evolution between old and new.

It is a good thing and those who are prepared to embrace it will win.
Short of extinction, we cannot stop the progress of change.

Disclaimer: Opinions constitute our judgement at the time of issue and are subject to change. Neither, the Licensee or any of the National Australia group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document. Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.

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