With the government getting serious in their push for a reduction in car ownership in Singapore, one must wonder: “Is Uber and Grab cheaper and viable option as compared to owning and using a car?”
I used to enjoy driving. I still do enjoy driving overseas like in the UK. However, the traffic in Singapore has become so crazy there is no more joy in driving in Singapore. I remember a time where I spent 30 minutes driving in Parkway Parade’s carpark just to find a lot. After dinner, I found myself in a carpark jam for 45 minutes before I could get my car out of the mall. I have since decided not to drive to Parkway, but instead Uber, Grab or Bus to Parkway.
So far, all my trips on Uber and Grab has been very enjoyable. Much more pleasant as compared to taxis. Taxi uncles are rude and can’t drive for nuts. Uber and Grab drivers are courteous and drive better. Oh did I mention I don’t need to pay a surcharge to pay with credit card on Uber and Grab?
And since I am considering losing my car when my Honda Civic’s COE ends, I decided to crunch the numbers to see if it makes any sense to Uber and Grab everywhere. What I discovered was so shocking that I decided to share it here.
There has never been a more comprehensive comparison between Uber + Grab versus the cost of ownership and use of cars in Singapore.
For the purpose of this article, here are some assumptions.
- I’ll be using my own travel habits.
- All trips on Uber will be on UberX.
- All trips on Grab will be on GrabCar.
- I’m going to assume that there will not be any surge in pricing. The truth is, if you are using both Grab and Uber side by side, there will rarely be times where you need to suffer a surge.
- Since the depre of my Honda Civic is unreal ($3,000 a year, a story for another time), I’m going to choose to use the general depreciation of cars in Singapore.
- Although I did not take a loan on my car, I’m going to assume in this article that a loan was made for $50,000 at 2% PA.
- For using Uber and Grab, I will use them for ALL trips that I normally would as if I had a car.
Determining the fixed cost of car ownership.
We covered extensively on the cost of ownership in an earlier post. But in this article, we will be using a different set of assumptions. The fixed cost of car ownership is defined as the cost to own the car, even though you do not use the car. Yes, the car cost money sitting there.
Here’s a breakdown of the annual fixed cost.
- Interest on car loan ($50,000 loan at 2% interest) = $1,000
- Annual Depreciation = $10,000. You must take note that most cars in Singapore are actually depreciating at a higher rate. For example, an Audi A4 could easily be depreciating at $14,000 a year. For simplicity sake, I’ll be using $10,000 as the annual depreciation.
- Insurance = $1,000.
- Road tax = $800.
- Servicing and Maintenance = $2,000. Some of you might argue “wah where you go service your car sial?”. My reply to that will be “I guess you don’t keep track of how much you spend on car maintenance.”. In fact, $2,000 a year is a conservative number! Yes, a routine servicing at the Ah-beng shop is probably $100 to $200, but you need to include the replacement cost of parts during major servicing and tyres.
- Cashcard, Season parking etc = $230×12 = $2760. Most Singaporeans park their cars in a HDB carpark, so that’s $90 a month. Workplace parking? Another $90 (conservatively). That leaves you with $50 to top up cash card every month (and also a very conservative number) for ERP and shopping center parking.
Determine how much do I drive
The next thing we need to ascertain is just how much and how long do I drive every year. Well, it might sound like a difficult task, but it is actually easier than it looks! I’ll break it down here.
- Number of weeks a year = 52
- Number of weekend days a year = 102
- Number of working days a year in 2015 = 251
- Number of leave days a year = 20
- Number of days you actually go to work = 231
Using the above assumptions, I can know the following.
- I drive to and from work 231 days a year = 461 legs a year.
- I drive to my parents in law’s place 1 time on the weekend = 52 times a year = 104 legs a year.
- I do random drives to different places (just because I’m cool) 2 times a week = 2 * 52 = 104 times = 208 legs. Each of these legs is usually 10km and 15 minutes.
- I drive to pick up my wife from work 231 days a year = 461 legs a year.
Using Google Maps, here are how long I take for each leg.
- Home to work, work to home legs = 21km, 45 minutes / leg
- Drive to parents in law’s place, and back = 4.8km, 8 minutes / leg
- Drive to pick up my wife from work = 10km, 14 minutes / leg
- Misc drives on the weekends = 10km, 15 minutes / leg
If you put everything above together, you get an annual mileage of 16,901.2km. That’s pretty (damn) close to what I actually drive annually!
Determine Variable Cost for car use
The variable costs of car ownership are generally the price of petrol. Since I drive 16,901.2km, and assuming a petrol efficiency of 11km/l, and price per litre of petrol at $2.00, I would use 3,072.95 litres of petrol, or $6145.89 in cash for petrol.
Total cost of car ownership and car use in this scenario
The total cost of car ownership in my scenario is $21,632.95, or $1.28 per km.
So how does that compare to 100% use of Uber and Grab?
Cost of Using Uber
Although there are some people who like to complain about how they are getting ripped off by Uber, their pricing is actually very transparent. Prices are published on their website (https://www.uber.com/cities/singapore/) and here are the rates (accurate at time of post)
- Fixed Cost $3
- + mileage = $0.45/km
- + time = $0.20/minute
Remember the trips that I do in the year?
- Home to work – 21km/45minutes – $21.45 x 231 working days = $4,954.95
- Work to home – 21km/45minutes – $21.45 x 231 working days = $4,954.95
- Weekend to PIL’s home – 4.8km/8minutes – $6.76 x 52 days = $351.2
- Weekend from PIL’s home – 4.8km/8minutes – $6.76 x 52 days = $351.52
- Uber to pick up wife – $0! Yes! I don’t have to drive to pick up my wife, so I decided I’ll include my wife’s Uber back from work. Imagine how my wife will feel? “Awwww you’re paying for my Uber back home from work!?!??”
- Uber back from wife’s work place – 10km/14minutes – $10.30 x 231 working days = $2379.30
- Misc weekend from home – 10km/15minutes – $10.5 x 52 days x 2 trips a week = $1,092
- Misc weekend to home – 10km/15minutes – $10.5 x 52 days x 2 trips a week = $1,092
Grand total for taking Uber everyday? $15,176.24.
Cost of Using Grab
Like Uber, Grab publishes their rates on their website (https://www.grab.com/sg/car/).
- Fixed Cost $3
- + mileage = $0.8/km
As you can see, Grab’s rates are different such that you only pay for the cost of distance travelled. One of the reasons why Grab is able to let you know definitively the cost of your trip before you complete it. So how much does Grab cost?
- Home to work – 21km- $19.80 x 231 working days = $4,573.8
- Work to home – 21km- $19.80 x 231 working days = $4,573.8
- Weekend to PIL’s home – 4.8km- $6.84 x 52 days = $355.68
- Weekend from PIL’s home – 4.8km- $6.84 x 52 days = $355.68
- Uber to pick up wife – $0! Yup, I just outsourced this to the Grab driver.
- Uber back from wife’s work place – 10km- $11 x 231 working days = $2541.00
- Misc weekend from home – 10km- $11 x 52 days x 2 trips a week = $1,148
- Misc weekend to home – 10km- $11 x 52 days x 2 trips a week = $1,148
Grand total for taking Grab everyday is $14,687.96.
Should I give up my car?
The numbers don’t lie. The cost of owning and using my car to fulfil my lifestyle costs me $21,632.95 a year, as compared to Uber’s $15,176.24 and Grab’s $14,687.96. By giving up my car and making all my trips on Uber and Grab, I immediately save more than $6,000 a year!
There are other benefits too. I’ll have more time to do whatever it is I do during the rides. To make the mileage of 16,901.2km, I would be driving, hands on the wheel for at least 31,210 minutes or 520 hours or 21 days or 3 weeks a year. Not only have I saved $6,000 a year, but I’ve also found 3 weeks of my life to read during transit, reply to email during transit or get the call to the bank done. Hell, waste that transit time on Facebook, get that out of the way, so that you can spend quality time with your dogs or cats once you get home.
What’s more, there are intangible risks to you if you drive the car. For example, you might accidentally knock-down and kill someone on the road; how is that going to look on your resume. You might also be caught speeding. Or you accidentally ran the light and got caught. Or get caught on STOMP while being guilty of road rage. Yes, you might argue that the chances of these happening are really low (you buy Toto don’t you?), but these are all unnecessary risks that suddenly disappears once you get someone to drive you around.
Remember, the numbers above are for me to do all commutes on Uber and Grab. In practice, I could decide to take a bus or a train during an off peak commute. In a 100% switch to Uber and Grab, I suffered no loss in convenience or mobility, and yet I found 3 weeks of my life and saved $6,000 in cash.
There doesn’t seem to be any reason why I shouldn’t go car-less.