[BinaryIdiot]

> After 5 years, the car is perhaps worth 20k.

No way. Absolutely no way. Looking online I'm seeing estimates of 300,000 to 500,000 miles per year in a taxi. If Uber is even NEAR that max, this car is going to have 300,000 miles on it. Hell even 150,000 is a ton of miles on a used vehicle.

Looking at KBB with a base S-Class that's 5 years old with 300,000 miles you're looking at roughly $12k in "good" condition (because, let's face it, people are going to be in this thing constantly and "good" is the rating the majority of used cars are in when they're sold).

Then factor in that Uber is not going to become a used car company (at least I would imagine they wouldn't) they're going to have to sell even lower than KBB to a third party so that third party can make any money. So I'd bet one of these cars would end up selling for $6k to $8k depending on mileage and condition after 5 years.

[cbr]

Lowering the sale price to $7k only bumps the per-year cost to Uber from $8k to $10.5k.

[BinaryIdiot]

True which is a $250k difference if my numbers are even correct (I mean I think they're closer than parent's but who knows). But $250k isn't that much when the company is a billion dollar company.

[jaycroft]

A difference of 250m, rather than 250k, which again, I guess still isn't that much for a 60 billion dollar company. Total depreciation on these is going to eat up up a billion in value a year, or only about 2% of market cap, assuming they keep or grow their valuation.

[BinaryIdiot]

Oh man how could I make such a mistake? I got thrown off by the lack of zeros. I can't even edit it. :(

[derefr]

Cars are devalued by mileage because the average car is taken care of so poorly that small damage accumulates into big, irreversable damage over time. For example, waxing wears off -> unwaxed surface pits -> rust forms -> holes form. If you re-wax the car often enough to prevent it from ever pitting, you'll never see rust or holes no matter how long you own the car. Same for most of the other components.

Individual drivers may not be able to take very good care of their cars, but large companies that use fleets of cars can take them regularly (perhaps even every night, as their default storage) to maintenance garages and have them restored.

[ghaff]

Except that, in practice, rental fleet cars are typically only kept until they have fairly modest mileage and then sold off.

[SeeDave]

Doesn't matter how many miles are on a car, all that matters is how many are left and incremental cost per additional mile due to maintenance/repair. :)

[desireco42]

I think this explains why they need Mercedes. It is a nice car that can have a lot of mileage easily.