More People Are Saying Car Ownership is Unnecessary

In a recent study that would certainly please the Metropolitan Manila Development Authority (MMDA) and those favoring the unpopular HOV traffic scheme happy, more and more people are saying that while access to transportation is necessary, car ownership is not. Conducted by Cox Automotive on American consumers, the study has the potential to have global implications, as ride-sharing and ride-hailing services become more prevalent worldwide.

The survey, which asked a total of 1,250 participants, showed that 50 percent of the respondents believe that the cost of owning or leasing a vehicle is becoming too high. Meanwhile, 57 percent of the respondents living in urban areas said that private car ownership is not necessary to get to their destination.

The survey further showed that ride-hailing apps own the greatest momentum among the new transportation models in both usage and mindshare. The number of respondents who said that they use such apps now stand at nearly 40 percent–a 77-percent increase from a similar survey in 2015.

The growth in popularity of ride-hailing apps is even bigger in the suburbs than in the metro. While consumer use of such apps grew by 18 percent in urban areas, their growth in suburbia is up 21 percent from 2015.

These and other similar sentiments from the public are starting to cause massive disruption in the automotive industry, in which operations are deeply rooted in manufacturing, retailing, repairing, and maintaining vehicles. In response, brands such as BMW, General Motors, and Mercedes-Benz have begun experimenting with new business models including subscription and rental programs where commercial vehicle owners can simply charge consumers for use.

Isabelle Helms, vice president of research and market intelligence at Cox Automotive, said that these services create “a shift from personally owning a vehicle to consuming one as a service.”

“Miles traveled will shift toward fleet-owned vehicles, causing what we believe to be a potential 40 percent reduction in consumer vehicle sales,” she predicted.