Rising costs of vehicle ownership are moving consumers toward mobility solutions, such as ride-hailing, car-sharing, and subscription services. That’s the conclusion of a new study on the evolution of mobility by Cox Automotive.
In a May 2018 survey of 1,250 U.S. consumers, Cox researchers found that a shift away from car ownership has already begun, and that shift “will continue as younger generations find mobility services increasingly appealing and ownership too expensive.” This emerging trend means that the industry needs to “rethink existing business models, extending core capabilities with an eye toward mobility.”
“Private ownership still dominates the automotive landscape,” admitted Michelle Krebs, executive analyst for Autotrader, quoted in a Cox announcement. Eighty-one percent of consumers still rely on private vehicles as their primary means of transportation. However, 48 percent of survey respondents said that the cost of owning or leasing a vehicle is getting too high.
Attitudes toward ownership versus mobility have changed since Cox started studying mobility in 2015. Thirty-nine percent of respondents told researchers this year that mobility is necessary, but that owning a vehicle is not. This represents a four percent increase since 2015, a gradual change overall.
However, the research also found that attitudes toward vehicle ownership vary considerably among urban versus suburban and rural consumers; and according to age demographics.
Among urban consumers, 57 percent said access to mobility is more important than vehicle ownership, a 13-point increase over the 2015 figures. And answers to that same question for various age cohorts reveal a definite trend toward mobility solutions for younger consumers. When presented with the statement “Having transportation is necessary, but owning a vehicle is not,” those who agreed broke down this way:
- Gen Z (12-22) — 55%
- Millennials (23-36) — 45%
- Gen X (37-53) — 34%
- Baby Boomers (54-72) — 28%
The Cox study tracked consumer awareness of mobility services, and found that ride-hailing enjoys high visibility, whereas car-sharing is less well-known and less accessible. One factor is that market share in ride-hailing is more concentrated, with Uber and Lyft dominating. Car-sharing, on the other hand, is fragmented among lesser-known players like Zipcar, Car2Go, Enterprise CarShare, and Hertz 24/7.
On the other hand, car subscriptions are getting good traction in the marketplace, although the concept is in early stages of deployment. Cox described a car subscription service as:
“A service that gives you control of a vehicle (similar to leasing), but also offers the ability to swap your vehicle weekly or monthly. Users pay a one-time membership fee and a subscription payment for their vehicle access (either weekly or monthly) that includes all expenses except gas (such as insurance, maintenance, roadside assistance).”
The study found that 25 percent of consumers overall are already familiar with car subscriptions. Sixteen percent of Millennials and 11 percent of Gen Z consumers said they would opt for a subscription the next time they are in the market, in preference to owning or leasing.