By: James Brehm
Over the past few years, there’s been talk in the industry that IoT-based car sharing services would be the end of the US automobile market. Many pundits believe that the growth of bicycle sharing in cities proves the case for car sharing. While services like Zipcar, Car2Go, and Enterprise CarShare are steadily growing services and garnering most of the press, auto OEMs, telematics providers and mobile network operators such as Verizon have been working on solutions to enable car sharing in every day passenger vehicles.
With the rise of the millennial generation, a new mindset about consumerism has been established. Sharing and getting a bargain are now perceived as cool, and ownership is not just about status anymore.
A recent poll conducted by Airbnb found that 67% of Americans have a favorable impression of it and fellow sharing economy services like Uber and Lyft. Support among millennials was even higher with nearly three-quarters saying they had a positive view of the industry.
Digitally controlled locks, video surveillance cameras in the home, automated learning thermostats, and vehicle telematics make the sharing of goods and services via the cloud almost second nature to millennials who are the first generation that has always been internet connected.
Millennials, people who were born from 1982 to 2004, are the largest generation in U.S. history, making up 83.1 million of the nation’s population, according to the U.S. Census Bureau. And while millennials appear to gravitate to ride-sharing services like Uber and Lyft more than their elder peers, a question lingers on whether or not millennial attraction to sharing means not buying, or just smarter usage of resources. Will portions of the economy die or will there just be new rules for money and new spending and consumption behaviors?
In examining usage, instead of replacing the everyday vehicle, millennials tend to use Uber and Lyft for specific reasons like going out for the evening or attending events where parking and traffic can be problematic. Usage is highest during business hours during the week or evenings on the weekend. For younger drivers, Uber is replacing cabs, not cars.
Recent statistics on automobile sales appear to refute the notion that millennials will give up car ownership altogether. Statistics from 2016 show that for the 3rd year in a row, millennials purchased more cars than Generation X, according to J.D. Power & Associates.
What’s more, Uber helps its drivers with vehicle acquisition-whether it’s through buying services, leasing or underwriting automobile loans. Where else can you apply for an auto loan and a job, and get both with no experience necessary?
This leads me to ask a few different questions:
If car sharing and ridesharing is not disrupting the automobile industry, is it fueling new car sales? Could the Ubers of the world be funding new vehicle purchases for drivers in the same way that “company cars” did so in the 60’s and 70’s?
Is the sharing economy less about disrupting industries and more about efficient utilization of assets?
Reprinted by permission of IoT Evolution