To Own or Not to Own: Costs for Car Ownership in Sharing Economy

Abstract

The article is devoted to issues related to comparing the costs of owning a car and using a taxi in sharing economy. The article provides a methodological approach related to the full accounting of costs and the calculation of costs per kilometre with the corresponding microeconomic model building. The authors considered a case of Ekaterinburg city, one of the leading industrial Russian cities with a high number of cars per 1000 people. The calculations made it possible to identify the equilibrium point-the annual mileage, at which the unit cost of owning a car is equal to the cost of using a taxi. According to the presented model, if a citizen passes less than 5,000 km a year-it's more profitable to do this by taxi. For longer annual kilometres driven, the total costs of a taxi will be higher than the total costs of owning a car. The obtained results contribute to a better understanding of citizens' travelling behavior and helps to form a transport policy that helps to reduce the number of private cars in big cities and makes cities more sustainable.