E-hailing services such as Uber and Bolt have become a normal part of the SA transport landscape, but can e-hailing completely replace vehicle ownership?
Estimated reading time: 4 minutes, 25 seconds.
In a country with unreliable and often unsafe public transport options (there are exceptions, but very few), vehicle ownership is still considered the ultimate transport goal for most South Africans. That said, the option of vehicle ownership is not available to everyone due to cost.
The introduction of e-hailing services such as Uber and Bolt created a stir but have now become part of our local transport landscape.
The handy feature with these services is that they’re available on-call and can also be pre-booked. This has made them very popular for airport runs, attending meetings, and especially at night or on weekends when traditional public transport options are limited.
With such flexibility, the question of whether e-hailing can replace vehicle ownership often comes up. We did some research and the results show it can be a viable option, but only in certain circumstances.
Distance equals cost
In the world of transport greater distances always mean a higher cost. Whether it’s a taxi, a plane or your own vehicle – the further you travel the more you spend. The same applies to e-hailing services.
This BusinessTech article gives a fantastic in-depth breakdown of the cost of owning a vehicle vs exclusively using e-hailing. The article shows that there will be a ‘tipping point’ where your e-hailing costs will exceed the cost of owning an entry-level vehicle at which point it becomes a matter of personal preference.
To calculate which option is more cost effective for you, draw up a table and calculate the following:
Note: these will be estimates, but try to be as accurate as possible by using current fuel prices, published fuel consumption figures for a realistic vehicle etc.
|
E-HAILING |
VEHICLE OWNERSHIP |
|
Monthly cost of work trips / school runs etc |
Monthly instalment |
|
Monthly cost of grocery / household trips |
Monthly insurance payment |
|
Monthly cost of social trips to see friends / family |
Monthly fuel cost |
|
Add some cost for unexpected trips – social or unplanned medical |
Maintenance costs |
The above calculations should give you a good overview of where you stand and which option makes the most financial sense.
Keep in mind that none of these costs are fixed and that fuel, e-hailing, vehicle pricing etc constantly fluctuate. It may be a good idea to add a percentage to both columns to account for unexpected expenses and avoid making the wrong financial choice.
Whatever your final choice is, the above exercise will help point you in the right direction.
Location, location, location
Although e-hailing services are popular and effective in most cities across SA, those living in smaller towns or rural areas might not have this option available to them.
Most of our smaller towns do have e-hailing services, but there might be limited capacity. You may find yourself waiting longer for a driver to become available during peak hours and this can be very frustrating if you need to be somewhere at a set time.
It’s a good idea to first test these services in your area and speak to people who use them regularly to find out exactly how available and reliable the e-hailing network is where you live.
On the flip side, if you stay in a very dense metropolitan area, you might find that the demand for e-hailing services is so high at certain times of the day that it also causes delays, no matter how big the service network is in that area.
That said, if you own a vehicle you also need to plan for high traffic times and areas, so both options come with their own risks of possible delays.
Lifestyle
Your lifestyle and budget will be the key deciding factors if you’re deciding between e-hailing and vehicle ownership. If you’re on that ‘tipping point’ where you can afford to choose, you must consider the following:
- Children: if you have children that regularly need to be transported to after-school activities, friends or sport gatherings it means you have a full and tricky schedule.
Keep in mind it’s not only the children you’re transporting, but also all the school and sport bags that go with them. In this case, having your own vehicle is probably more convenient as it allows you to pre-pack / leave certain things in the vehicle when needed.
- Hobbies / holidays: If you regularly go away for weekends or holidays, owning a vehicle just gives you more freedom of choice and allows for unplanned stops etc.
That said, if you strictly go away once a year, for example, you also have the option of renting a vehicle during that time. Once again, it will come down to careful budgeting and personal preference.
Conclusion
As with any big financial decision, the choice of vehicle ownership vs e-hailing depends on financial planning, lifestyle, and future plans.
While vehicle ownership still makes the most sense in SA, it’s encouraging to see that alternatives are starting to play a bigger role. From lease vehicles or long-term term rentals to e-hailing and vehicle ownership, South Africans have more mobility options than ever before.
It’s by no means a perfect system, but the options for all budget types are certainly expanding, and we count that as a positive.
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