It makes sense that uber and lyft don't pay enough to cover depreciation; price falls to marginal cost for cheapest driver which is a casual irregular driver for uber who is using otherwise idle capital whose cost is sunk.
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The depreciation is sunk. It's amortization of the purchase of the car over time. Depreciation is an accrual accounting concept, important for financial reporting, but not a factor in business decision-making.
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Let me amend that: to the extent that driving the car reduces its terminal value, it's relevant. The point here is that this difference is not important for people who drive for uber infrequently and/or have high time preference. But it's important for regular drivers.
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