1. Based on the information in the case, how much would you need to drive to pay your car payment, insurance, the additional costs, and have an extra $400 per month in spending money? How does this compare with a retail job of $10.50 per hour? Assess your analysis. Assume no gasoline costs for the retail job and 15% withholding for taxes and FICA. Hint: Use a breakeven analysis for each calculation.

Here are the basics:

If we estimated that a student who wanted a part-time job could earn enough money to pay his or her car-related expenses and earn roughly $100 per week in extra spending money. The idea of letting a car earn its keep by directly contributing to earnings would probably is appealing to many college students.

Table 1: XX Fare Schedule

XX would actually be profitable for a typical student. If we assumed a typical student might have a car payment of $300 and car insurance of $250 each month, and the car has an estimated fuel efficiency of 23 miles per gallon in the city and 34 on the highway. The average cost of regular unleaded gasoline to be $2.25 per gallon, and finally, we assumed that the typical college student was in the 15% federal income tax bracket.

Passengers pay the total fare plus the XX service fee of $1.45. Drivers receive 80% of the total fare and nothing from the service fee. Also, the minimum cost to the passenger is always $5.00.

= $1.00 + ( $0.12) + ( $0.93) + $1.45 = ($1.00 + ( $0.12) + ( $0.93)) 80%

Now, if a XX driver picked up a passenger in the morning rush hour and drove 3.21 miles from pickup to drop-off. The ride took 11 minutes and 10 seconds. The passenger paid a total of $6.78 and driver received $4.26 with this information we can summarized

Table 2: XX Payout Example

If driving full-time, an average from 50-55 hours per week, usually drive about 6 hours daily during the first half of the week and about 10 hours per day on Thursday, Friday, and Saturday. Driver makes also average about 950 miles driven each week, also driver can take any day off that want without asking a boss. Driver usually work in the morning and evening rush hours and sometimes the nights and late nights for sporting events, concerts, and the bar crowd, making an average about $650-$725 in net pay each

Table 3: Costs of Driving

Nashville, TN as of 12/1/15 Base Fare $1.00 Per Minute Fee $0.12 Per Mile Fee $0.93 Cancellation Fee $5.00 Service Fee $1.45 Minimum Fare $5.00 For a 11 minute 10 second ride for 3.21 miles) Passenger Cost (Total Fare + Service Fee) Driver Revenue (Total Fare x 80%) XX Revenue (Total Fare x 20%) + Service Fee Base Fare $1.00 $1.00 Per Minute (11.1667 x $0.12) $1.34 Per Mile (3.21 x $0.93) $2.99 $5.33 $4.26 Total Fare $1.07 $1.45 Service Fee $1.45 $1.45 $4.26 $2.52 Total $6.78 Cost Austin's Notes 1. IRS Standard Mileage Rate (Recommended) Keep a mileage log (IRS, 2015) $0.54 deduction per mile for 2016 Gas and Maintenance 2. Actual Costs (Instead of the standard mileage) Keep receipts for gas, oil changes, tires, maintenance, and depreciation Car Insurance Business vehicle expenseyou will need to update your insurance to include ride sharing on your policy, there are insurance companies willing to do this Cell Phone Need a smartphone with lots of data Car Washes Keep your car clean inside and out SiriusXM Satellite radio $15 per month (optional) MileIQ Mileage app for the phone $5.99 monthly or $60 annually. Highly recommended! Itemize I use this app to keep up with my expenses. It costs $4.99 monthly. This is really helpful me, but maybe you don't need it. Nashville, TN as of 12/1/15 Base Fare $1.00 Per Minute Fee $0.12 Per Mile Fee $0.93 Cancellation Fee $5.00 Service Fee $1.45 Minimum Fare $5.00 For a 11 minute 10 second ride for 3.21 miles) Passenger Cost (Total Fare + Service Fee) Driver Revenue (Total Fare x 80%) XX Revenue (Total Fare x 20%) + Service Fee Base Fare $1.00 $1.00 Per Minute (11.1667 x $0.12) $1.34 Per Mile (3.21 x $0.93) $2.99 $5.33 $4.26 Total Fare $1.07 $1.45 Service Fee $1.45 $1.45 $4.26 $2.52 Total $6.78 Cost Austin's Notes 1. IRS Standard Mileage Rate (Recommended) Keep a mileage log (IRS, 2015) $0.54 deduction per mile for 2016 Gas and Maintenance 2. Actual Costs (Instead of the standard mileage) Keep receipts for gas, oil changes, tires, maintenance, and depreciation Car Insurance Business vehicle expenseyou will need to update your insurance to include ride sharing on your policy, there are insurance companies willing to do this Cell Phone Need a smartphone with lots of data Car Washes Keep your car clean inside and out SiriusXM Satellite radio $15 per month (optional) MileIQ Mileage app for the phone $5.99 monthly or $60 annually. Highly recommended! Itemize I use this app to keep up with my expenses. It costs $4.99 monthly. This is really helpful me, but maybe you don't need it