One of the most noteworthy culture shifts EVER: how our passion for cars cooled over the last decade. Cars have gone from being rites of passage, to status symbols to burdens.
Auto Shows are also becoming increasingly irrelevant. Attendance is dropping and automakers themselves are ditching the shows.
- At the Detroit Auto Show only 30 new cars were introduced vs. 69 the year before. Many name brands didn’t even bother to show up. Audi, BMW, Mercedes-Benz, Volvo, Porsche, Jaguar, Land Rover, and Mitsubishi were official no-shows. They were replaced by pop-up cafes and bored-looking attendees.
- At the Chicago Auto Show, star-billing went to a pen of frisky puppies that Subaru brought to the event because they were clearly more interesting than any of their new models. And they were right. The puppies created a media frenzy.
Teens don’t want to learn how to drive anymore.
- According to a recent study by the University of Michigan, the number of Americans in general — and teenagers in particular — getting their driver’s licenses has declined steadily over the past 30 years.
- The number of high school seniors who drive dropped from 85% in 1996 to 71% in 2015, a record low for the age group.
And then I ran into this excellent article from the Motley Fool on why we should keep a close eye on the ride-sharing economy both from an investor’s perspective as well as to better understand culture shift.
Read on below.
The ride-sharing market is booming
- Ride-sharing is a massive global industry – estimated to be worth at least $218 billion by 2025.
- That’s why Uber has expanded into nearly 65 countries, and why the company recently spent $3.1 billion to purchase its ride-sharing rival Careem in the Middle East.
Car ownership is declining
- IHS Markit data shows that the auto industry will experience a 33% decline in automotive sales between 2017 and 2040.
- Americans, particularly younger ones, are far more open to the idea of paying for transportation only when they need it, as opposed to owning a car themselves.
- With 80% of the U.S. population living in urban areas, the hassle of owning and driving a car in the city, finding parking, etc. isn’t worth it. Add the fact that cars sit idle 96% of the time, and many Americans are losing enthusiasm for the automobile.
Ride-share usage is growing fast
- Morgan Stanley estimated that there will be 97 million ride-sharing rides per day by 2030.
- Lyft says that it already completed 178.4 million rides in its fourth quarter of 2018, up from 116.3 million in the same period of 2017.
- Uber says that it completes 15 million trips worldwide every single day. For reference, the company, was doing only 1 million rides per day just four years ago.
- 44% of Americans use ride-sharing services regularly. They’ve quickly become a regular part of many people’s daily lives.
Personal car ownership will clearly decline further as teens delay getting their drivers’ licenses, as boomers age out of cars and as populations continue to gravitate to metro areas vs. rural.
This was brought home to me last week by a NYC friend who has a weekend beach house and has always owned a car. Over lunch he told me that when his current lease is up, he will be done with cars. He thinks they’re a hassle and in reviewing his spending on the car, he came to the conclusion that he could hire a car and driver every weekend to take him to his house over the summer and it would be less expensive than what he currently spends for his car lease, garage, insurance and general upkeep – and he would not have to worry about driving, he could read instead.
Personal transportation is in the midst of a major disruption. First came Uber and Lyft and cheaper versions like Via. In urban centers we also have bicycle shares e.g. Citibike and the newest mania is for e-scooters (which I’m not a fan of but millennials seem to love them). So cars will still be there but fewer of us will own them unless we’re in the ride share business.
And all I can say is, if the famous American love affair with cars can peter out like this, anything and everything is up for grabs. There are no norms that are immutable anymore.