Appeal of mobility alternatives to vehicle ownership grows among younger generations

While private vehicle ownership remains the most popular form of transportation and most people consider access to transportation to be important, a recent study finds that a growing share of people are interested in mobility alternatives such as ride-hailing and car sharing.

The study, entitled Evolution of Mobility Study, was conducted by the automotive resource company Cox Automotive. A total of 1,250 people were surveyed as part of the research.

Thirty-nine percent of respondents said that while access to mobility services is important, they don't consider owning a vehicle to be necessary. The share of people holding this opinion was up 4 percentage points from a 2015 survey of 2,464 respondents.

In urban areas, the share of respondents who said mobility was more important than vehicle ownership stood at 57 percent – up 13 percentage points in three years. Younger respondents were also more likely to feel this way, including 55 percent of Generation Z respondents (ages 12 to 22) and 45 percent of millennials (ages 23 to 36).

"Private ownership still dominates the automotive landscape, but options like ride-hailing and subscription programs are increasingly popular with young urban dwellers," said Michelle Krebs, executive analyst for the Cox Automotive company Autotrader. "The trendline for these programs could drastically alter this industry over the next five to 10 years."

RIDE-HAILING

In ride-hailing services, a driver registered with the service picks up fares who summon a ride using a smartphone app. Eightyeight percent of the survey's respondents said they were aware of these services.

Thirty-nine percent of respondents said they have used a ride-hailing service. This was up 17 percentage points from the 2015 study.

Fifty-one percent of respondents from "top mobility markets," or 10 major cities predominantly concentrated on the East and West Coasts, said they have used a ride-hailing service. This was up from 33 percent in 2015.

Although the popularity of ride-hailing was concentrated in urban areas, with 61 percent of city dwellers saying they have used such a service, the option was becoming more popular elsewhere as well. One-third of respondents from outside the top mobility markets said they have used a ride-hailing service, including 40 percent of suburban respondents and 19 percent of rural respondents. Use of ride-hailing services in these areas was more than double what it was in 2015.

The growth in ride-hailing usage was consistent across different age groups, although younger respondents were more likely to use these services. Fifty-five percent of millennials said they have used ride-hailing services, along with 43 percent of Generation Z respondents, 28 percent of Generation Xers (ages 37 to 53), and 23 percent of baby boomers (ages 54 to 72).

CAR SHARING

Car sharing services allow drivers to borrow a vehicle for a limited amount of time, ranging from brief errands to longer trips. Fewer people were aware of these services, with only 54 percent saying they had heard of them.

While car sharing usage saw some growth from 2015, it has remained relatively flat in recent years. Fourteen percent said they have used a car sharing service, an increase of just 2 percentage points from three years ago.

In the top mobility markets, usage of car sharing services shrank slightly from 20 percent in 2015 to 19 percent in the more recent survey. This was offset by a slight increase in car sharing elsewhere, with 11 percent of respondents outside the major cities saying they have used this type of service – up 3 percentage points from 2015.

Millennials were most likely to take advantage of car sharing, with one in four saying they had done so. Nine percent of Generation Z and Generation Xers also said they had used car sharing, while just 4 percent of baby boomers had done so.

Researchers said that

availability was one hurdle preventing the more widespread adoption of car sharing. Forty-four percent of urban respondents said they considered car sharing options to be accessible in their community, along with 34 percent of suburban respondents and 26 percent of rural respondents. In each area, this was less than half the share of respondents who considered public transportation, ride-hailing services, and taxis to be accessible.

Respondents were also likely to rate car sharing lower than ride-hailing in a number of areas. The survey found that respondents were 29 percent less likely to describe car sharing as convenient, 28 percent less likely to cite safety, 24 percent less likely to say it gave them peace of mind, and 22 percent less likely to say the overall cost was beneficial.

SUBSCRIPTION SERVICES

The survey also asked respondents about car subscription services, which it described as a relatively recent innovation. These services, which include a one-time membership fee and subscription payment, give drivers control of a vehicle in a manner similar to a lease. However, participants also have the option to switch out the vehicle they use each week or month, and the subscription payment covers all expenses—such as insurance and maintenance—other than fuel.

Just one in four respondents between the ages of 18 and 64 said they had heard of this option, and only 10 percent said they would be open to using a subscription instead of purchasing or leasing their next vehicle. Younger respondents were more likely to express interest in this option, with 16 percent of millennials and 11 percent of Generation Z saying they would be interested in the option.

Forty-four percent said the ability to access the latest vehicle technology would be a perk of a car subscription service, and this benefit was more appealing to younger respondents. Thirty-six percent agreed that it would offer convenience by minimizing the need to maintain or repair a vehicle, a factor that was more appealing to older respondents. Thirty-five percent said a car subscription service would be flexible or give them the ability to drive the type of vehicle they wanted.

There was no clear preference among respondents on who they would go to for a car subscription. Twenty-four percent said they would want to have the automaker provide the service, followed by 22 percent who would prefer it through a dealership and 7 percent who said they would want to rely on a third party.

VEHICLE OWNERSHIP

Despite the increasing awareness and usage of mobility alternatives, private vehicle ownership continued to be the most prevalent form of transportation among respondents. Eightythree percent of respondents said they drive a personal vehicle at least once a week, including 86 percent of suburban and rural respondents and 62 percent of urban respondents.

Among urban respondents, just 7 percent said they use ride-hailing services at least once a week. Thirty percent said they use public transportation with this frequency, while 12 percent said they carpool and 9 percent said they ride a bike. Only 4 percent of suburban respondents and 2 percent of rural respondents said they use ride-hailing services at The Day E3

least once a week.

Similarly, just 4 percent of urban respondents said they use car sharing services at least once a week. The share fell to 3 percent among suburban and rural respondents.

Eighty-nine percent said they consider private vehicle ownership to be convenient, while 87 percent said it was cost-effective or safe. Eightyone percent cited the freedom associated with vehicle ownership as a benefit.

However, nearly half of the respondents said it is becoming too expensive to own or lease their own vehicle. Forty-eight percent held this opinion, up 6 percentage points from 2015. Millennials were most likely to consider vehicle ownership to be too pricey, with 52 percent saying so.