Why Having a Car is No Longer Cool

My take on five reasons to opt-in to on-demand mobility

For the past hundred years, car ownership has been a cornerstone of American culture. However, studies show the number of Americans interested in buying cars drops year over year. Millennials don’t even want to get a driver’s license anymore! It seems just like a matter of time when car ownership will no longer be mainstream, check out some statistics in Brad Tuttle’s article.

I moved to the US less than a year ago, but luckily managed to get a car on lease. Enjoying a car for personal use, I have never actually calculated the cost of ownership. With some simple math, I realized that I spend $300 for lease payments, $200 on fuel, and $120 for insurance per month, which together with maintenance and parking ends up being roughly $700–800 a month of car expenses.

Meanwhile I came across a piece on Jonathan Matus’s TechCrunch discussing on-demand mobility. It covers a whole set of services allowing you to use a car only when and where you need it. Just like if you want to enjoy a salmon, you don’t buy a fishing-rod. Or a boat.

And then I got curious, what are the reasons I should abandon my own car? Or how can technology remove the cool factor of car ownership?

Car Sharing

Long a convenient option for travellers, everyday car sharing turns into an option for commuters. Cited in TravelPulse, a recent study shows that one in five corporate Zipcar members sold a personal car after joining the program, and another 20% avoided buying a car in favor of car sharing.

Research by the Shared Use Mobility Center (SUMC) estimates that one shared car can replace as many as 70 personal cars in urban environments. Along with less parking hassles, if those cars are electric, it would mean lower emissions.

Are there any challenges? Sure there are. What if you want to take your car abroad or lend it to a fellow rider? With car sharing, in most cases you can’t do this. Also the price can add up: over $80 a day.

But the key issue is, as always, in people’s minds. Owning a car has long been part of the American dream that making people opt-in for car sharing sounds like a tricky shift. But tying it in with more technology (think of sharing a Tesla!), and more drivers might be on board.

Taxi Apps

Even with a car, I’m a heavy Uber and Lyft user. They are convenient, fast, and serve most of the locations I need. And it seems like Wall Street shares my feelings. Morgan Stanley just gave a stock price target for Tesla, with a 90% increase! Such a bullish forecast is based on something called “Tesla Mobility, an app-based, on-demand mobility service.”

It sounds like a blend of Tesla and Uber. Or, Tesla, Uber, and Google. And it seemingly leaves Elon Musk speechless. His non-answer about working with Uber on the recent conference call was louder than if it was an answer. I can only assume that Tesla Mobility will be a bit more costly than your favorite UberX.

That said, frequent use of existing taxi apps could put a big dent in your budget. The trick behind it is that you don’t actually feel like you are paying. You just get out of the car, while the money is deducted from your account. But think for a second — if an average short trip in the Bay Area is $15, a daily commute might end up at $30–50. And that’s almost $1K a month.

Carpooling

Despite the initial battle between Uber and Lyft (the two announced carpool services within few hours of each other a year ago), it is still far from mass market. Both are operating in San Francisco, New York, Los Angeles, and Austin; additionally UberPool is available in Boston and Paris.

I’m not underestimating that scale, but it is still only five and seven cities. And despite more than half of Uber and Lyft rides in SF currently running as carpool, other American cities are slow to embrace the carpool option — especially compared to their European counterparts.

Does this mean there is no place for carpooling in the mobile on-demand world? I’d say, it depends on the technology behind it: it must be truly smart! Carpooling is all about saving money. Why else would you get in the backseat with a total stranger? At the same time, it needs to bring money to the company, otherwise why would they invest in such a service?

The magic is the match rate, or “the percentage of rides requested on the carpooling service that actually end up being paired with another ride,” says Forbes. Just like betting — when the match is found, the company wins, when not — the passenger.

As for me, carpooling is hardly an alternative to owning a car. If car sharing presumes you have some privacy in the car, carpooling is almost on the “dark” side of public transport.

Public Transport

I’m not that much against public transport. Especially in the Bay Area, where you can cover a decent distance with BART or Caltrain for a neat $10. And even catch up with your work or sleep on the way! Plus, apps like Citymapper, Moovit, or Maps.me can help you get around.

But how long will public transport stay the cheapest option? Depends on how bad Uber and Lyft will want to undercut taxi prices. And on electric car development. And on competition in the car sharing market. Often, price stops being a factor for public transport. Instead, people take it to save time avoiding traffic. I know I do.

Driverless Cars

Now, let’s move from existing options to the future. Both the auto and technology industries are putting their best minds behind driverless car projects. Rumor has it that Apple is already secretly testing its self-driving car. And I recently spotted one of Google’s cars in the wild — the future is closer than it seems!

As big and attractive the idea of self-driving cars is, it has a long way ahead. Even the US market is not ready for those cars on the streets in terms of regulation. And even if regulators will work with them, public trust still needs to be won. Because nobody wants to end up like Jared in “Silicon Valley” show.

To sum it up, owning a car (or two, or three) per household is seriously not cool anymore. It causes carbon dioxide emissions, dead traffic, and lots of waste. And it’s good to hear that San Francisco is in the top ten US cities where people are abandoning their cars.

Still car ownership will exist. Not because of the middle-class (who will eventually seek out areas with accessible on-demand transportation). But because of those who admire the cars as collectibles, who can spend hours reading specs of BMW i8 and Tesla, and who want their car doors to open “like this”, not “like this”!

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