Q&A: Why are you so sure we’re past peak private car?

SLUFriAM

Q. Why are you so sure we’re past peak private car ownership?

A. There are a lot of things we can observe that suggest this is the case, from the number of car-sharing vehicles on the streets  to the changed driving habits of Millennials. But in this case  the underlying drivers (so to speak) may not be intuitive–but make it inevitable…

We can divide the market for “all then money people spend on access to  automobile transportation” into three buckets:

A. You can own a car that sits idle when you’re not using it.

B.You can not own a car and rely on “car-as-a-service” options like Car2Go, ReachNow, Uber, and Lyft, and others.

C. You can own a car that is available to others (for a price) when you’re not using it.

Here’s the thing: as the market share of B and C increase, A’s share has to decrease–unless people reduce spending on something else in order to spend more, in total, on access to automobile transportation than they have been spending in the past.

Leaving aside whether that’s plausible in general, in Seattle where the cost of housing is rising faster than inflation or earnings that’s doubly implausible.

But we know the fix is in against A because the companies that have made their money from it–the automakers–are investing like mad making B and C better. 

And B and C work in a self-reinforcing cycle: the more car-as-a-service options available, the more compelling it is not to own a car. The fewer people who own cars, the more demand there is for  car-as-a-service options.

To put it another way, the only big players with a stake in maintaining A’s market share  are working hard to grow B and C’s–because they’re in a race with companies like Apple, Google, and Uber that have no vested interest in the status quo.

Like them, the major auto companies are banking one way or another on c ar sharing or autonomous and semi-autonomous vehicles or both.

The bottom line is that A is going to become a progressively lamer option compared to B and C.

If there’s any way people will cannibalize their savings or spending on other things in order to willingly pay “more for less” then it’s possible we’re not past peak private car.

But the automakers don’t believe there is and neither should you.

Update: Self driving taxies on the road in Singapore More  More

Update: Delphi ups target date for autonomous car to 2019

Image: South Lake Union on a weekday morning

Update: Self-driving bus on the road in Finland

Update: Uber self-driving car now, fleet by 2021

Update: 2021 looking to be a big year

Update: Ford statement all-in on human-drive free fleet by 2021

Update: Ford says autonomous ride hailing fleet by 2021

Update: Ford doubles down

Update: Co-founder of Zipcar on autonomous cars and public policy

Update: Car sharing services taking cars off the road

Update: Very smart take by a telco executive & technologist

Update: BMW deal to make autonomous cars

Update: First fatal accident (Tesla on autopilot)

Update: The rapid growth of car sharing in Seattle

Update: Self-driving bus on the road in DC

Update: Self-driving bus on the road in Switzerland

Update: Tesla has 100M miles of autopilot data

Update: “Secret” testing centers mimic cities

Update: Volvo promises 100% autonomous car by 2020

Update: Good on the Feds: AI is a driver

Update: One analyst projects 40% drop in car sales over next 25 years

Links:

Here are all the companies racing to put driverless cars on the road by 2020

GM and Lyft will test self-driving cabs on the road within a year

Ford: Self-driving cars are five years away from changing the world

Apple’s $1 Billion Didi Investment Revenue Up Autonomous Car Push

 

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