The number of cars per 1,000 people in the United States is 809. That is the highest of any large rich country in the world. By comparison, Canada is 607, Japan 588, Germany 582, and the U.K. 519. Depending on whose numbers you believe the number of vehicles per household in the U.S. is either slightly more or slightly less than two.
The automotive industry is the largest manufacturing sector in the country. It is the largest retail business. And it accounts for 4.5% of private sector employment in the U.S.
But there are many recent statistics that suggest that car ownership has peaked and may be on a downward slide. According to Advisor Perspectives, an investment research company, the number of miles driven in the U.S. peaked in 2005 and has declined every year since. There are other studies that show a decline in interest in owning cars or in even getting a driver’s license.
Not all of the stats are headed in that direction. Industry sources predict that car sales in 2015 will be 2.4% over last year. And in the developing world it appears that folks in Africa, Asia and Latin America are buying cars as soon as they can afford them.
What is particularly noteworthy is the apparent lack of interest in car culture among younger Americans. The consumer group US PIRG found that driving by young people (16-34) decreased 23% between 2001 and 2009 (Millennials in Motion). The AAA Foundation for Highway Safety reported that between 1996 and 2010 the percentage of high school seniors with drivers licenses dropped from 85% to 73%.
There are some compelling reasons why society at large might welcome a decline in car ownership. Transportation is the second largest producer (behind power plants) of gas emissions. Cars take up more space per person than any other form of transit. In 2013 (most recent DOT stats), 32,000 people died as a result of motor vehicle accidents. The Economist estimated that one rental car can take the place of 15 owned vehicles (Seeing the Back of the Car).
But the reasons cited for what appears to be the beginning of a decline in car ownership are more personnel. The redevelopment of urban centers as attractive places to live, particularly for young people, makes car ownership both more expensive and less necessary. More young people socialize online and shop online. Most of us hate the traditional car buying process and we all hate traffic.
There are also some pretty substantive economic issues like the cost of vehicles, gas and insurance, the later being especially high for young drivers. For college graduates, the growth in student loans may have put the squeeze on other types of loans. The rise of telecommuting has lessened the need for the car-based commute.
At this point what we are seeing is what has been termed “car peak.” But there are also some things on the horizon which could totally transform private car ownership: technology and the rise of the on-demand, sharing economy.
Automotive technology is clearly headed in the direction of the driverless car. A study by the University of Michigan Transportation Research Institute predicts that driverless cars would cut car ownership in half. Their conclusion is largely based on calculating the number of two-car and multi-car households that would no longer need more than one vehicle.
But even without the autonomous car, ride-sharing services like Uber and Lyft and car sharing services like Zipcar are beginning to raise questions about the value of owning your own car. For urban dwellers in particular, who in addition to car payments, insurance, maintenance and gas, also may have to pay a couple hundred dollars a month in garage fees, ownership is starting to look like a less-advantageous option.
By the end of last year, Uber said it was providing a million rides a day. Zipcar now has 900,000 members using 10,000 vehicles.
At some point these two developments, driverless cars and ride sharing services, will merge. If you can, with a couple of clicks on your phone. summon a driverless car that will show up in a couple minutes and economically take you wherever you’re going, it starts to look a lot better than bringing your own car in for an oil change every few months.
I am part of a two car family, despite the fact that neither my wife nor I drive to work. If I were to add up all the costs associated with these two cars and compare it to having one or both of us use a ride sharing service I’m not sure it would make sense. I’ve probably never gotten over the 17-year-old view, that an available car means freedom. Pretty soon I might have to think this through again.