Uber vs the cheapest car in South Africa – with surprising results

Depending on how much you drive daily, using Uber could be more cost-effective than buying the cheapest car in South Africa in 2024—the Suzuki S-Presso.

In 2024, more than 70% of all the cars in South Africa now cost more than R500,000.

One key reason for this spike was the Covid-19 pandemic, which saw car factories around the world shut down and lay off workers when lockdown restrictions were enforced, and the demand for cars dropped.

After the easing of restrictions, consumer spending quickly rebounded, while production was slower to return to pre-Covid levels. This created a supply-and-demand problem, leading to inflation.

In South Africa, the poor performance of the local economy and the rand/US dollar exchange rate have magnified this effect, making it exponentially more expensive to import and sell vehicles here.

According to Tracker, this means the tipping point for South Africans to choose between vehicle ownership and ride-hailing now depends on financial affordability, lifestyle preferences, and evolving urban dynamics.

The car-tracking firm said that despite the appeal of ride-hailing services, many young adults and first-time buyers still see car ownership as a symbol of independence and mobility.

However, car prices and economic constraints, combined with factors such as student debt and job market uncertainty, may delay or prevent them from realising this aspiration.

The table below compares the monthly travelling costs of a Suzuki S-Presso versus taking an Uber, as outlined by the tracker.

The total cost of owning a car was calculated based on a vehicle price of R175,000. The car was financed over 72 months at 13% interest with a 10% residual value.

The total cost includes petrol, maintenance, insurance at a rate of R4.84/km, and other miscellaneous expenses such as R200 for parking and R139 for tracking fees.

Additionally, Uber rates for different service levels (including “Go” and “Comfort”) were recorded to show the potential charges for Joburg commuters during work hours.

Based on these calculations, using ride-hailing services can be cost-effective if you travel around 1,400km per month.

However, beyond this distance, it may be more economical to own your own car.

If you’re considering purchasing a vehicle that is more expensive than the cheapest option available, Uber could still be the more affordable choice, even if you travel well over 1,000km every month.

Tracker points out that when the finance contract expires, as long as you have been making your payments diligently, you will have a fully paid-off car.

At that point, you will only need to cover the running costs, and you won’t have this type of reward if you choose to drive for Uber instead.

On the other hand, due to the depreciation of vehicles, the company suggests that if you were to save the difference between owning a car and using e-hailing each month and invest it in an interest-bearing account, you could end up with a more substantial financial asset after several years than if you had an old vehicle.

Read: The only new cars you can buy for R5,000 a month in South Africa