Ride-hailing services such as Uber and Lyft might instill dramatic changes in the way people think about transportation in urban areas. But these disruptive mobility companies and others like them will have a minimal impact on traditional automakers and car sales. In fact, they may be more of an opportunity than an existential threat.
Those are the conclusions of a new report issued this week by the Center for Automotive Research (CAR), an Ann Arbor, Michigan–based nonprofit that examines auto-related trends.
Even as some city dwellers reject car ownership in favor of these alternative transportation options, researchers say overall vehicle demand will remain high, as these new mobility services develop and turn over their fleets. In the end, these services will contribute a net loss of 15,163 vehicle sales per year in North America, the researchers say, in an industry on pace to sell roughly 17 million vehicles, a 0.08 percent loss.
Worldwide, new mobility services hold the potential to make a more disruptive dent. But in the United States, where cheap gas and suburban geography still hold sway, personal economics still favor car ownership. For Americans who travel more than 2200 miles per year, ownership remains cheaper, though the break-even mileage point can vary based on make and model.
“New mobility services are far less adapted to sprawling and sparsely populated areas, where a majority of the United States population lives, and where the convenience of driving one’s car is greater than the appeal” of shared services, wrote Adela Spulber and Eric Paul Dennis, the study’s authors.
in aggregate traffic fatalities when its users make up such
a minimal share of total drivers.
Another reason that new mobility services pose a diminished threat: As they incrementally gain share, the automakers themselves have adapted, largely by investing in these same companies or creating their own. General Motors invested $500 million in Lyft earlier this year and launched Maven, its own car-sharing company. Ford created its “Smart Mobility” subsidiary and is experimenting with fractional ownership in Austin, Texas. Daimler owns car-sharing operator car2go, and cross-mode service moovel. Volkswagen invested $300 million in taxi service Gett, and Toyota and Uber have announced a ride-sharing collaboration. Those are a handful of many examples.
“Those can become new revenue sources,” the CAR authors wrote. “Importantly, these on-demand mobility services are a way to generate ongoing income and to engage more with customers more frequently than just through a vehicle sale every five to ten years.”
At the same time the researchers report the impact of new mobility services on auto sales will be minimal, another report suggests these mobility services won’t make much of a dent in another important area. While the likes of Uber and Lyft seem to hold much promise in reducing drunk-driving occurrences, a new study from the University of Southern California finds there has been no correlation between the advent of ride-sharing and a reduction in drunk driving.
Though there are rational reasons to believe such a relationship would exist, “our findings reveal that the deployment of Uber services in a given metropolitan county had no association with the number of subsequent traffic fatalities, whether measured in aggregate or specific to drunk driving-related fatalities or fatalities that occurred on weekends and holidays,” the researchers concluded.
Those findings differ from those touted by Uber and Mothers Against Drunk Driving, which highlighted a case study in Atlanta, where drunk-driving arrests decreased as Uber’s growth in the city increased. Further, 80 percent of riders surveyed by the company said it had helped them personally avoid drinking and driving. But as rapid as Uber’s growth may be, the Southern California researchers say the number of Uber drivers in a market may still be too small to have influenced the number of drunk-driving incidents that occur in the U.S. every year.