Is learning to drive a waste of money?

By Uri Bram

Every culture has its coming-of-age rituals. In late 20th-century suburbia, a standard rite was learning to drive. Housebound teenagers would transform into free-range adults the moment they got their licence – at least, whenever Mum let them borrow the car.

If the prophets of the self-driving revolution are right, however, by the middle of this century people will not need to drive any more than we need to ride horses. Learning to drive is an investment decision: for an outlay of time and money today, you acquire a skill that will (hopefully) save you time and money in the future. In previous decades, most people could proceed on the reasonable assumption that they’d be shuttling kids and groceries for the rest of their lives; the cost of learning would be paid off over a very long period.

Thanks to on-demand rideshare services like Uber and Lyft, the driving sector is changing fast even before self-driving vehicles are brought into the picture. “You could live your whole life in a major city today without ever learning to drive or owning a car – many people do,” says Benedict Evans, a partner at Andreessen Horowitz, a venture-capital firm. “But on-demand services expand the geographic window in which it’s practical to do that, and reduce the inconvenience of it, presuming you can afford to pay for that convenience.”

Transport decisions will always depend on two factors: cost and convenience. The trade-offs are vastly different in different places. “There is a reason Google is testing its self-driving cars in Austin,” says Olaf Sakkers, whose firm Maniv Mobility invests in mobility startups in Israel and America. “Austin has a weak transit system, a lot of lower density sprawl and warm weather making the value of autonomous vehicles greater and the complexity of deploying them lower.” Dense urban areas see customers benefit from shared vehicles, whether autonomous or human-driven, because thick markets keep waiting times low and reduce prices, while the higher cost of parking makes driving your own car less attractive.

Still, at current prices, it’s fairly clear that the total cost of using rideshares is higher than the total cost of driving for an ordinary commuter. Ben Thompson, founder of the blog Stratechery, estimated that the average American would spend around $4,000 per year on driving to work and parking (not including the cost of the car itself), but around $10,000 per year to use rideshares. Of course, there is no average American driver: costs differ sharply by location. Certain cities are expensive across the board, whether for ridesharing or for parking, but rideshare costs also vary greatly due to local regulations. The average price per mile for Uber in New York City is over two dollars, versus less than a dollar per mile in Los Angeles.

However, not all costs are monetary costs. “People generally don’t think about the value of their time spent driving their car,” says Sakkers. “When you sit in a Lyft Line, even if the ride takes slightly longer, sharing the ride helps manage the cost, while the time spent in the vehicle could be used to power through your emails or watch the latest episode of “Westworld”. If your time is worth enough to you then driving stops making sense.”

The average learner-driver is in a very different situation from the average commuter. “When is the cost of a taxi cheaper than owning a car?” asks Evans. “It depends how many rides you take, much more than it depends on the fare.” A learner driver is less likely to be a daily commuter and more likely to be an occasional driver, which makes ridesharing much more economical; conversely, learner drivers are often using a parent’s vehicle when it would otherwise be idle, which is more economical too.

But some of the fixed costs of driving are per-driver, not per-car, and they don’t come cheap. In California, for example, a 16-year-old on their own policy can pay around $4,000 a year for insurance. That could cover a lot of taxi, Uber, Lyft or Juno rides. Perhaps people have always been irrationally averse to taxis: taxi meters are the absolute embodiment of watching money slipping out of your pocket. The clever rideshare services seem to have learned this lesson, making it as easy as possible for you not to notice the money you’re spending on them. Meanwhile, the costs of personal car ownership are either fixed (buying a car) or variable (fuel and maintenance) in ways that people might not fully account for.

Of course, by not learning to drive today, you don’t prevent yourself learning in future. The cost of driving falls significantly with age: in the Californian example, insurance rates fall to an average of $2,000 per year for 20-year-olds. And some of the uncertainty around the future of transport, and so the future value of driving – just how soon will autonomous vehicles take over our roads – will be cleared up in the coming decade. For someone who doesn’t need to drive immediately, but was planning to learn in case they needed to in future, laziness might pay off. In the back of a rideshare you can put your feet up and still happily get to your destination.

ILLUSTRATION DONOUGH O'MALLEY