Hello,
I am curious about thoughts on how to handle estimated depreciation costs of rideshare driver vehicles. I have an estimate built off AAA data. My question is if it'd best to put this as Other Property Income or simply remove the depreciation costs from my model since it's not current spending.
Hi Johnathan! Great question!
Depreciation is treated as consumption of fixed capital (CFC), a sub-component of Other Property Income (OPI), so a known value gets entered there rather than as an operational input.
To do this, use an Industry Impact Analysis (Detailed) event, select your firm's industry specification, enter known Direct Output or Employment, then manually enter your CFC value into the OPI field. The IIA event rebalances the remaining unknown LPF components proportionately, rather than dumping the residual into OPI like a standard Industry event would.
Keep in mind that OPI is treated as a leakage, so your depreciation value will show up accurately in Direct Value Added but won't generate additional Indirect or Induced effects. Finally, if the firm is actually spending capital this year to replace equipment or build something, that's a separate capital investment and should be modeled on its own through a Commodity or Construction event.
Hi Daniel, thanks for your question.
Depreciation represents the consumption of a vehicle’s value over time, not a current operating expense. Because of that, it should not be included as part of a rideshare driver’s ongoing spending or intermediate inputs in your model. IMPLAN treats depreciation as consumption of fixed capital, which falls under Other Property Income (OPI) within Value Added. So rather than counting it as current spending, the correct placement is within OPI.
If you're building a custom specification for rideshare operators, especially if the default IMPLAN cost structure doesn’t reflect their unique use of personal vehicles, you can incorporate your depreciation estimate directly into OPI. However, if you're relying on an existing IMPLAN Industry, you should avoid adding additional depreciation, since IMPLAN already includes it within OPI and adding your own estimate would result in double counting.
Thanks Adam!
Hi Adam! I have a related question. Does IMPLAN have documentation or a guide on how to treat when the value of depreciation is known for a specific firm or entity being modeled?
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