Take Taxi or Buy a Car?

There are still many people debating about which is more cost-effective, taking taxi or buying a car.

There are many people claim that taking taxi is cheaper, since you don’t have to buy the car, and don’t need to pay all the related fees, including but not limited to: road construction fee, annual checking fee, gas, fine (if you drive violately), parking fee, and repair/maintance fee.

There are other people claiming that buying a car is cheaper in Shanghai, since taxi fair is way too expensive compared to the gas cost – 2.1 rmb/km, and no one will take a taxi to go camping or outting.

My answer? I would say, to buy a car is definitely more expensive than taking taxi. Why?

Take my car as an example. In the last 3 years, the decrease in price is around 80,000 RMB (or 10K USD), and my car went about 40,000 km. That is almost the same as 2.0 RMB/km – the same as the taxi rate.

This is just for the car itself. I didn’t count on the much more expensive cost as I listed above.

The answer is clear – to buy a car is much more expensive than taking taxi.

However, buying a car has much more than taking taxi – it is something called freedom.

What do you think?

30 thoughts on “Take Taxi or Buy a Car?

  1. ILH

    JS, Have you heard about the Car sharing service (in US)? Car sharing is a service that provides members with access to a fleet of vehicles on an hourly basis. Once you become a member, you can reserve any car you like in advance and drive it for as long as your reservation. It is not like car pool because it is “yours” for that amount of time. It is not like car rental because you PAY BY THE HOUR. Therefore, the best and most cost-effective trips are those that are short in time and distance.

  2. rangew

    public transportation combined with on-demand car rental , plus occasional taxi is the way to go. only when you go camping, outing for few days far away from the city, would you need a rental car.

  3. loretta

    My experience of getting a cab in Shanghai is much more difficult from one trip in compare to the last, that is a consideration as well. Also a lot of times driver will refuse a fare, it have noting to do with distance, I got refuse just going down from one end of Wai Hai road to the other end or a fare that worth 50 RMS plus. No rhyme or reason.

  4. Давид

    What kind of car do you have that depreciates so much? I have a 2001 Honda Civic, purchased for $15,800 (includes all taxes and fees). 6.5 years and 60,000 miles later, my car is worth $8500. That’s $7,300 depreciation in six and half years.

  5. Shrek7

    Jian Shuo

    what about the cost of automobile insurance in Shanghai? you didn’t mention it.

    is automobile liability insurance mandatory?

  6. islet8

    In my opinion, now owning a car is not only the symbol of status, but the quality of life, the most important reason is that when you need to take taxi, others need too, so…you know :)

  7. DC

    without a car you can’t or will not consider going to outskirt. it is a no.. no.. no.. you might get a taxi to there but no promise you will get another one back to the city.

    Car is another option for “freedom” :)

  8. Ben

    I believe taking the taxi is definitely the better choice, for a few reasons:

    1. To go to work, Metro is the best option. It is MUCH faster than any road transport during peak hours, and is always on time regardless of how crowded it is (maybe wait a couple trains). Getting to and from a Metro station is impossible with your own car without wasting lots of money and time on parking. Shanghai has good (soon to be excellent) public transport, for very low prices — why not use it?

    2. You can work on the taxi. Laptop, SMS, paperwork, everything! Even if there’s no work, you can read the newspaper or call a friend to talk. Reading is impossible when driving yourself, and talking is dangerous when traffic is crowded.

    3. You have no liability. In your own car, you might hit another car or a bicycle, or injure a pedestrian. If the taxi does that, it’s not your fault. You can just pay the fare, get out, and call another taxi.

    4. You save a lot of stress. Driving during peak hours is like fighting a battle, and there’s no point in adding to the stress of a long work day with two hours of perilous driving. Road rage is very, very terrible for your health.

    5. Taxi drivers are better at squeezing past buses. Enough said.

    6. You help improve society’s living conditions. Driving your own car adds pollution to the already polluted air, whereas the taxi will be there whether you ride it or not. Also, owning a car promotes American-style car culture, which has a horrible influence on public life. Every street here is lifeless and barren. Nobody walks; there are no shops to look at; there is nobody to greet. This kind of city planning is unfriendly and environmentally unsustainable. Shanghai should realize that and limit development of suburbs.

    7. When you’re drunk, you shouldn’t drive or you might die. :)

  9. Ben

    About the outskirts of the city… just don’t go there. Going there and spending money there helps support irresponsible development.

  10. chee8218

    I always face a problem from taxi driver. We are family of 5, i.e. 3 adults and 2 kids age 8 & 10. Taxi drivers claim that they are not allowed to fetch 5.

  11. DC

    Ben, you must be kidding working in the taxi here. You just said “Taxi drivers are better at squeezing past buses”, how can you work… you better focus on how they drive… :)

  12. Jian Shuo Wang

    Давид, it is Fiat. Second-hand car don’t have a market here, and not easy to sell.– Anyway, I decide never sell my car – I love my first car.

  13. Ben

    “Ben, you must be kidding working in the taxi here. You just said “Taxi drivers are better at squeezing past buses”, how can you work… you better focus on how they drive… :)”

    Just work… if they hit a bus, it doesn’t matter whether you’re watching or not. Wear the seat belt too, even in the back seat. I’ve saved myself a few concussions that way. :)

  14. Давид

    Help yourselves and the environment, bike to work!

    I rode my bike on Bike to Work Day, which was last Friday. It was 11.5 miles each way. It felt great. I am thinking of doing that every other Friday.

  15. Ben

    11.5 miles is mad though, at least in Shanghai. You’d smell like a restaurant garbage dump afterwards. Where do you live?

    Public transport is going to kick some major hinny soon — by the end of 2010, there will be over ten Metro lines and one thousand bus lines in operation. By then, I’d consider anyone that drives a car unpatriotic (不爱国). :)

  16. Michael

    Obviously taxi is much cheaper. There is no ways about it.

    With car you will have better quality of life, status, freedom and convenience to move around.

    Car is expensive to maintain with petrol, insurance, road taxes, wear and tear.

    Car also depreciate in value every year.

    So taking taxi is much much cheaper !

  17. Michael

    Obviously taxi is much cheaper. There is no ways about it.

    With car you will have better quality of life, status, freedom and convenience to move around.

    Car is expensive to maintain with petrol, insurance, road taxes, wear and tear.

    Car also depreciate in value every year.

    So taking taxi is much much cheaper !

  18. DC

    “I rode my bike on Bike to Work Day, which was last Friday. It was 11.5 miles each way. It felt great. I am thinking of doing that every other Friday.

    Posted by: Давид on May 23, 2007 03:29 AM”

    You probably need to carry a oxygen tank on your back :) It is not about the distance… it is pollution here… very dusty.

  19. Давид

    DC: Funny that you asked. I live just outside of Washington, D.C. How about you?

  20. DC

    Давид,

    Currently, I am living in Shanghai. I do cycle around Shanghai as an exercise or weekly outing. I thought of cycling to my office too which is 7km away. But considering the heavy morning traffic that pollutes the air quality, I decided not too. If not my face will have a “foundation” look alike the cosmetic used by the ladies. Instead of white in color, mine will be slightly darker in color. HAHAHAHA…..

  21. stephen

    Anybody consider to own a cycle richshaws in Shanghai?

    It should be very cheap to buy and low maintenance, it is also environmental friendly and a platform for exercise. Riding in it should raise the eyebrows of the others or you can hire someone to do the paddling as to ease the unemployemnt in Shanghai.

    On the weekend, you can put your love once behind you and have a joy ride, and you can also use the cycle lane to avoid the traffic.

    Is this the wonder cycle of the future? Hahahahaha

  22. ddjiii

    I guess I’m with everybody else on taking taxis and public transportation.

    And let me address WJS’s issue of freedom: there is no doubt that owning a car gives you freedom when travelling outside the city center. We took a family trip to Suzhou a few weeks ago (4 adults, one baby) and we had to rent a van and driver in advance, kind of a pain.

    BUT when inside the city center having a car gives you less freedom – you have to figure out where to park it, and you have to worry that someone will hit it, scratch it, or steal it. Taking a taxi IMO gives you a much greater sense of freedom – you just get out and walk away. We live in a very central location, and we have several friends who don’t like to come visit us because it’s too expensive to park. I guess they feel that now that they have cars, they don’t want to pay taxi fare, and they’ve gotten out of the habit of taking public transportation. What irritates me is that they seem to sort of feel that I’m to blame for living in an inconvenient place! I’m not very sympathetic, it’s very convenient in every other way, there is no right to cheap and convenient parking – plus their cars add to my air pollution.

    Good post as always!

  23. Ben

    It’s funny, because when I’m in a big city, I refuse to visit friends in suburbs because *they* are too far away. Technically, I’m more correct than they are.

    Also don’t forget to have a little foresight. 15 years from now, every suburban street in Shanghai will have horrible traffic. Outer Ring Road will be a pathetic parking lot half the time. When everyone wants “freedom”, nobody has freedom. True freedom is public transport.

  24. solopolo

    >>>>:) It is not about the distance… it is pollution here… very dusty.

    and one of the main reasons for this pollution is?!

  25. shanghai my second home

    Hi,

    Wang Jian Shuo, this is a great blog. I am American and have visited Shanghai several times since 1999. I like to see this blog to remind me of fun times and think of future visits.

    this post is timely for me. My sister-in-law (tai tai de mei mei) is considering buying a secondhand car from her xiao yi fu. His company gave it to him but he doesn’t get the driver anymore! Do you have any idea what a good price is? It’s a 1999 Santana 2000. Only about 40,000 km. It is in good condition, I have ridden in it before, and the driver took care of it. It would include the license plate, which is probably as much as the car! She would like a fair price, not a subsidy from xiao yi fu. She mentioned 80,000 RMB. Is this a good price?

    She basically came to the same conclusion as you. The taxi is cheaper than the car, but often not available at 8 am. Her son goes to a school, and going by bus takes about 1 hr each way, whereas driving is about 20 minutes.

    Also, how much roughly would a portable GPS be? I think we’ll buy one for her next time we go to Shanghai. It would be very useful.

    Finally, can an American with a US license drive in China? I don’t think so, but I have seen that a holder of a Chinese license can drive in the US so maybe it is bilateral. Pudong is not too bad, kind of like Los Angeles. But I would not want to try Puxi or some of the other cities like Hangzhou or Xian. Also the expressway between cities is not too bad.

    thanks! and congratulations for your new baby.

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