Owning a car is not necessarily the rite of passage it used to be. With environmental concerns, automation, and the advent of ride sharing services like Lyft and Uber, there have been concerns over the decline in car ownership. As the one of the largest generations, millennials have a significant impact on car ownership. This article explores the state of car ownership under millennials and generally, as well as alternatives that exist and have changed how this purchase is being made and avoided.
The Car Ownership Decline
Car ownership has declined in the past five years for two main reasons. Millennials who live in cities have elected not to own cars. Ridesharing apps and automation have also contributed to the decline. This decline is one reason why companies like Mercedes Benz and its parent company Daimler has invested in organization like the car-sharing service Car2Go and Mooval, a booking service for public transportation.
It is predicted that as soon as 2020, the opportunity for buying electric car ownership will also become more available. As the demand for cars declines, renewable fuels like solar and wind are getting more valuable and more important to future buyers.
Cost of Ride Sharing
For some cities, the car peak may have already happened. In Seattle, car ownership started to decline beginning in 2010 for the first time since the 1970’s. By 2015, that decline was almost exclusively due to millennials. Thanks to improved public transportation, Lyft, and Uber, car ownership isn’t as essential or necessary as it once was. It is also an easy way to get a safe ride without having to rely on public transport after a party or night of drinking. Young millennials who want to spend money on these kinds of activities might find ridesharing benefits them in many more ways than owning a car would.
By the same token, millennials may be buying more cars precisely for ride sharing apps. Recent research shows about 15 percent of millennials are planning to drive for services like Lyft of Uber. Millennials are generally thought to be worse off than generations before them. While recovery from the recession is underway, millennials have had a difficult time finding jobs and getting a decent wage. This combined with increased housing costs, make affording a car a much more feasible solution.
Despite ride sharing apps like Uber and Lyft contributing to the decline of car ownership, 75% of millennials still prefer owning a car. Services like Uber and Lyft also prompt people to buy cars for the purposes of having a side hustle. So car ownership decline appears to be a combination of many factors that include millennials but also technological and environmental innovations. The car peak will be ultimately responsible for the car ownership decline. But it may also open the door to new vehicles.