Money Is Green, Not Black and White

Conventional wisdom says that here in Pensacola, Florida it's better to have a minivan as a taxi than a regular sedan. The thinking is that a van is better because there are so many tourists with lots of people and luggage, and the Navy kids always have a shit-ton of bunk, trunk and junk with them. Both of those things are true. And seven years ago when I bought my first taxi, it was a 2006 Ford Freestar minivan.

The Freestar was great. But the downside was that it got horrible gas mileage. As gently as I could baby it, I never got more than about 14mpg in the city, which is primarily where I drive. On the occasional highway trip it never did better than 23 mpg. But I made a lot of money with that van, and it was paid-off so its poor gas mileage didn't seem to matter.

As 2018 began, the Ford was, let's say “tired.” It had more than 210,000 miles on it. The interior and exterior were still great, but every week something else was breaking. At my local car-repair place, the guys and I were on a first-name basis. We never could get the air conditioner working right – but Lord, how they tried!

Coincidentally the taxi business here in Pensacola was dying a not-so-slow death thanks to the rise of the ride-shares. In April of this year I made the decision to switch over to Uber. The Ford van was just not suitable. This meant getting a newer, more dependable vehicle. (Here in this city Uber allows cars up to fifteen years old.) Naturally I began looking for another...well, van.

Sure enough, I found a super-clean, loaded 2010 Dodge Grand Caravan at a local dealer. It had a lot of miles on it (slightly over 100,000), but the dang thing looked, ran and drove like a brand-new car. It was in immaculate shape. Perhaps because of the mileage, or more likely the fact that it was literally the last day of the month, the salesman immediately came off their sticker price (which I already knew from my research was pretty fair). Inside, as we worked up the numbers I got him to come down even lower. They really wanted that van gone. In the end, I think I got a very good deal, which is often hard to say.

Many of my Uber passengers thought it was a brand-new van. I got many compliments on it, both verbally and, more importantly, noted on the App. I liked the “new” Dodge even more than my old Ford. (The automatic doors and built-in satellite radio helped.)

But again, the problem of gas mileage immediately made itself known. I thought it would do a little better, but my average city mileage was horrible. Over the six months I've owned the van I've averaged only 15.8mpg. Ouch. In October, my fuel cost per mile was $0.18.

So I started thinking about other cars, regular cars...more economical cars, especially hybrids. There is a reason that a lot of Uber drivers use the Toyota Prius. But I didn't want a Prius; I'd heard too many negative things about them from my passengers. Trouble is, hybrids are expensive to buy even if their operating costs are low. And there were no hybrids that I really liked.

But then I remembered the Volkswagen diesels! The VW Jetta diesel (the model is known as “TDi'”) was reported to get 40mpg on the highway and 30mpg in the city. I thought to myself that if it only got 25mpg in the city I'd be pleased as punch, as Hubert Humphrey used to say.

Volkswagen had a big scandal starting back in 2012. They got caught with a clever “cheater” program in their computer engine controls which could detect when somebody was doing an emissions test of the car. In that case, the computer would make the engine run super-duper-clean to pass the test. Once it was over and the test equipment unplugged, the car would go back to it's normal settings – which by the way were the same settings that Volkswagen used everywhere else in the world. It was only in the U.S. with our more-stringent nitrous-oxide limits that their cars would not pass (and some of them, like the 6-cylinder diesel, could not even be made to pass). And they got caught. Oopsie!

It's not that Volkswagens are unsafe, or even that they are serious polluters; they're not. The U.S. just has some crazy-ridiculous standards for diesels to keep passenger cars from running down the road smoking like an old eighteen-wheeler at full-throttle. And it's not like VW sells all that many diesels in the U.S. every year. But the feds caught them cheating and imposed some extraordinarily steep penalties. One of them was, of course, that they “fix” all of the non-compliant cars. Which they did. Another was that they no longer sell diesels in the U.S. Which they don't.

For the car buyer, Volkswagen diesels represent a hell of a bargain. They are seriously undervalued. People have heard of the scandal (it was called “Dieselgate”), and even if they don't know the details of it, they shy away from VW “TDi models” as they are known because they seem tainted.

I'll cut to the chase: I found a very nice 2012 VW Jetta Tdi at a dealer. It had the federally-mandated fix, and only had 71,000 miles. It's loaded and, again, like my Caravan it's gorgeous – it looks and drives like new. The dealer didn't want a lot of money for it either.

Needless to say, I cleaned out my van and drove home in the Jetta. On Interstate 10 on the way home the little gauge on the dash was showing 41.1 mpg. Who knows how accurate that is. (The one in my Caravan said I was getting 14mpg; in truth I did a little better than that.) In town, the display in the Jetta shows an average of 28.2mpg. I haven't put many miles on the car yet, so I haven't filled it up to calculate the actual fuel mileage (don't say “gas mileage” to a diesel driver!). But we'll see. I'm optimistic. If I can get an average of 28mpg, and with diesel being $3.00 per gallon it means that my fuel cost per mile will now be $0.11. That's about a 30% improvement!

But as usual, I didn't think this all the way through, as my friend, Terry was happy to point out. You see, 15% of my Uber revenue came from the higher-paying XL trips (more than 4 passengers) in the Caravan. So I'll be losing that money. I'll have slightly higher car and insurance payments...which is bad, but lower fuel costs per mile...which is good, but 15% less revenue...which is bad. Terry noted astutely that I'll probably just break even on the deal.

Nothing in life is ever black or white.  Certainly not money.