Trends in the Auto Industry: Will Car Ownership Soon Be Regarded as a Disease?
My colleague Jon LeSage has just published another edition of his Green Auto Digest, this one attempting to answer an important question: Why is Apple investing $1B in Chinese ridesharing giant Didi? Jon provides several good answers, some rather blatant, others well hidden.
There seems no doubt that the auto industry is moving away from the paradigm that has defined it since its inception, i.e., car ownership. Many young people today just don’t see the attraction of owning an expensive piece of steel that sits dormant all but a fraction of an hour a day. The existence of mobility services like Uber, as well as car-sharing, has enabled a brand new way of looking at this facet of our lives.
While there is no doubt that this is very good news for users of such services, it can’t possibly be good for the entire auto supply chain, which employs a significant percentage of the U.S. workforce. IMO, this is yet another reason that the U.S. needs to join the rest of the developed countries in a recognition that cleantech is destined to be the dominant business arena of the 21st Century. There is a great big beautiful world out there, full of opportunities to wrest the environment from the cataclysmic end to which its currently headed.
I do not believe that car ownership will ever become obsolete. However, if adequate and convenient alternatives become more readily available, a decline in car ownership is likely. Right now, the convenience of car ownership makes it worthwhile despite the cost.
Note that there are many people who buy cars which are much more expensive than necessary. A Nissan Sentra, Toyota Corolla, or similar inexpensive car would easily serve their needs, yet they still buy Mercedes and BMWs for which they have to pay far more. Probably those people would never give up car ownership regardless of convenient alternatives.
I think this depends on the situation of the person wanting transportation.
Take the example of London. Public transport is frequent, relatively fast and convenient through many areas of the city. By contrast, driving a car is terribly inconvenient, slow, and unpleasant – especially in the daytime. Parking can cost a fortune (Up to around £4.80 / $7.00 per hour in central areas). There is a weekday congestion charge of £11.50 a day (around $16.60) and through much of the day, you are lucky if you move faster than pedestrians. On top of this, fuel costs £4 / $6 per US gallon. Finally, if you are under 25 and an inexperienced driver, insurance can cost 1 to 2 months wages.
Given all the above, it seems likely that a large proportion of young people in places like London will increasingly find it more convenient to use public transport, especially as self driving cars become available for occasional use where trains and buses are not suitable.
Excellent point.