Deciding how to get around on a daily basis is a recurring economic choice. For those just starting out, the comparison usually stops at the price of fuel, the fare, or the app ride — and that distorts the result.
This step-by-step guide shows how to compare owning a car, ride-hailing apps, and public transportation the right way: moving from basic to advanced, with a focus on total cost of use (TCO), and without complicated formulas.
Step 1: define your monthly usage pattern
Before looking at prices, you need to understand how you get around. The same mode can be cheap or expensive depending on your routine.
Write down, for a typical month: - How many days you commute per week - Average daily distance or number of trips - Peak or off-peak hours - Urban, highway, or mixed use
This simple snapshot will be the basis for all subsequent calculations.
Step 2: direct costs — what comes out of your pocket every time
Here are the most visible expenses, which usually guide the initial decision.
Owning a car
- Fuel - Recurring parking - Frequent tolls
Ride-hailing apps
- Average ride cost - Surge pricing during critical hours
Public transportation
- Single fares or monthly passes - Paid transfers
At this step, compare only the direct monthly spending. It doesn’t decide everything, but it shows the starting point.
Step 3: fixed costs that don’t depend on usage
A common mistake is ignoring expenses that exist even when the car is parked.
For car ownership, include: - Vehicle tax and registration (allocated monthly) - Insurance - Estimated depreciation
These values make up the car’s “cost of existing.” Apps and public transportation generally don’t have equivalent fixed costs, which significantly changes the comparison.
Step 4: less obvious variable costs
After the basics, it’s time to broaden the view.
For owning a car
- Preventive and corrective maintenance - Tire replacement - Car washes and minor care
For apps
- Cancellations and extra fees - Long waiting times
For public transportation
- Complementary trips (bus + app, for example) - Extra time that can generate other indirect expenses
These items don’t appear every month, but they weigh on the annual cost.
Step 5: convert everything into an equivalent monthly cost (TCO)
To compare different modes, bring all values to the same scale: the month.
A simple method: - Add up all annual costs for each option - Divide by 12 - Compare the equivalent monthly cost
For car ownership, this reveals the TCO: fuel + fixed costs + maintenance + depreciation, all spread over time.
Step 6: cost per kilometer or per trip
For those who want to go further, normalize the cost by usage.
- **Cost per km**: useful for those who drive or use apps with variable frequency - **Cost per trip**: useful for predictable routines
This step helps answer questions such as: - “If I drive less this month, which option drops more in price?” - “Which mode penalizes reduced usage the least?”
Step 7: scenarios — when the result changes
The comparison isn’t fixed; it changes depending on the scenario.
Some examples: - Heavy daily use tends to dilute a car’s fixed costs - Occasional use favors apps or public transportation - Peak hours increase app costs - Long commutes favor modes with fixed fares
Simulating two or three scenarios helps avoid decisions based on a single atypical month.
Step 8: economic interpretation (no magic numbers)
The goal isn’t to find the option “cheapest for everyone,” but to understand the break-even point of each mode.
In economic terms: - Owning a car has high fixed costs and lower marginal costs - Apps have almost zero fixed cost and high marginal cost - Public transportation tends to offer predictability and lower volatility
When you see this logic, the decision stops being emotional and becomes comparable.
Final checklist for deciding with clarity
Before choosing, confirm that you: - Considered fixed and variable costs - Spread annual expenses over the month - Compared different scenarios - Used the same metric (monthly, per km, or per trip)
This process doesn’t eliminate personal preferences, but it puts total cost at the center of the decision — exactly where it should be.
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