Ride-hailing services might seem like a money-saving alternative to buying a car for people who live in urban areas.

But according to a new study, it’s not nearly as cost-effective as you’d think.

The AAA Foundation for Traffic Safety found that using ride-hailing services like Lyft and Uber as a primary mode of transportation works out to be far more expensive than owning a car – even with fuel, insurance, parking, and the vehicle itself considered.

Ride-hailing services might seem like a money-saving alternative to buying a car for people who live in urban areas. But according to a new study, it’s not nearly as cost-effective as you’d think. Stock image

According to the new AAA study, relying on ride-hailing services could cost a person roughly $20,118 per year.

The study focuses on urban settings, which are the only practical environments where personal cars could be replaced with ride-hailing, AAA notes.

In urban areas, the average driver puts 10,841 miles on their car per year.

Even in cities with lower annual ride-hailing costs, such as Dallas, TX ($16,944), the expense is still much greater than the costs associated with car ownership.

An earlier study by AAA found that the average new car costs a driver $8,469 annually, or $706 per month based on 15,000 miles driven.

For 10,841 miles of travel annually, the firm estimates the cost to be around $7,321.

‘Whether you own a vehicle or not, ride-hailing services are a convenient transportation option,’ said John Nielsen, managing director, Automotive Engineering and Repair.

‘However, with the average American city-dweller driving nearly 11,000 miles per year, a personal vehicle is still the more cost-effective choice.’

HOW RIDE-SHARING PRICES ADD UP IN A YEAR ACROSS THE US CITY ANNUAL COST CITY ANNUAL COST Atlanta $17,741 Nashville $26,397 Austin $19,821 New York $21,279 Baltimore $19,917 Philadelphia $23,201 Boston $27,545 Phoenix $17,436 Chicago $22,020 Pittsburgh $18,940 Cleveland $20,091 Salt Lake City $18,866 Dallas $16,944 San Diego $17,316 Denver $20,434 San Francisco $21,972 Los Angeles $17,951 Seattle $23,951 Miami $17,339 Washington D.C. $21,093 AAA Foundation for Traffic Safety’s American Driving Survey

In some major urban areas, the estimated annual costs for people who rely on ride-hailing services are staggering.

In New York, AAA estimates people pay about $21,279 per year – and in Boston, this number is upwards of $27,000.

Parking is one area that can be a killer when it comes to cost; according to the AAA estimates, this costs anywhere from $706 (Phoenix) to $8,088 (New York) per year.

But, even with this expense considered, using ride-hailing services was found to be the more costly option.

The AAA Foundation for Traffic Safety found that using ride-hailing services like Lyft and Uber as a primary mode of transportation works out to be far more expensive than owning a car – even with fuel, insurance, parking, and the vehicle itself considered. Stock image

WHAT ARE THE AVERAGE ANNUAL COSTS OF OWNING A CAR IN THE US? VEHICLE TYPE ANNUAL COST VEHICLE TYPE ANNUAL COST Small Sedan $6,354 Minivan $9,146 Small SUV $7,606 Large Sedan $9,399 Hybrid $7,687 Medium SUV $9,451 Medium Sedan $8,171 Pickup Truck $10,054 Electric Vehicle $8,439 Average $8,469 AAA’s Your Driving Costs, based on 15,000 miles driven annually

For those lucky enough to have access to free parking, the use of ride-hailing services works out to be almost three times as expensive as vehicle ownership.

‘For those who travel a very limited number of miles annually, or have mobility issues that prevent them from driving a personal vehicle, ride-hailing can be a viable and important option,’ Nielsen said.

‘But, for everyone else: the car is still king.’