How the concept of vehicle ownership is quickly becoming obsolete
Since the end of the second world war, fuelled by the global economic boom in the western world, cars have stood as a symbol of our individual freedom and status in society. The generation of baby boomers was the first to reach new independence and horizons thanks to the mobility allowed by cars.
Today, however, at the end of one the longest periods of continuous car sales growth on record, car ownership – as a concept and as a model - has begun its journey towards obsolescence. Driven by millennials, urbanisation and growing environmental attention, our society is slowly, but steadily, veering towards a car leasing and sharing model.
Indeed, Octo Telematics subsidiary Omoove, a leading shared mobility technology provider, has recently extended its car-sharing platform – Sharemine – by opening up the community to managers and the public at large.
More than any other generation before, Millennials are transforming the world. This generation of digital natives has taken to the Internet for shopping, learned to transition from job to job or work from home, and has single-handedly re-invented the sharing economy.
Millennials no longer look at cars as a symbol of coming of age and independence; quite to the contrary, they perceive vehicle ownership as an expensive burden. Leasing not only costs less than purchasing a car, but also comes with the added bonus of having no fixed vehicle maintenance and insurance costs.
According to a recent survey, over 34% of millennials in the United States are leasing vehicles. Led by a legion of consumers aged 35 and under, the number of car leases has doubled since 2011 and reached a milestone of 2.2 million in the first semester of 2016.
Millennials don’t need cars because they are prevalently an urban generation. Indeed, major cities around the world that offer the promise of a job are currently being referred to as millennial magnets; living in an urban area makes it easier to shop on-line, enjoy public transportation and fully take advantage of the sharing economy.
By the next decade, one billion individuals are expected to move to cities worldwide. Considering that traffic congestion already is a key issue in many cities, the outlook does not bid well. In fact, many cities have already begun tackling this issue with measures that will further discourage citizens from owning private vehicles.
Congestion charges are now implemented in many large cities. In London, traffic decreased by 28% between 1994 and 2003, and when the congestion charge was introduced in 2004, there was a further 12% decrease. In Paris and New York, less than half of the residents own private vehicles and Paris has recently announced that it will ban all non-electric vehicles by 2030. And this trend will only be accelerated by the introduction of new car sharing services, private transportation networks, and the continuous improvement of public transportation services.
Improving public transport and discouraging the use of private vehicles – especially ones driven by petrol and diesel – is our main solution to reduce not only air pollution, but also to control noise pollution and curtail many stress-related illnesses. Governments have been focusing on how to reduce the environmental impact of vehicle transport for decades now. And recent progress in the production of electric vehicles - and the upcoming promise of self-driving cars - has driven countries to take firm measures to reduce vehicular traffic in urban areas.
In Europe, the United Kingdom and France are scheduled to ban all vehicles powered by fossil fuels by 2040, while Finland will end the sale of diesel cars by 2030. Norway is set to become one of the top ecological countries worldwide with its proposal that all cars in the country run on green energy by 2025.
In Asia, China is not only one the world’s largest vehicle markets, but also a country afflicted by an acute air pollution problem, especially in its major cities. Indeed, public authorities are heavily incentivising public transport and studying how to end the production and sale of all fossil-fuel-powered vehicles.
According to various surveys, sales of private vehicles have plateaued in the United States and in the United Kingdom; in Australia, France, Germany, Japan and Sweden, the automotive market began shrinking even before the economic crisis in 2007. And while the market is still flourishing in China and India, the trend is changing, especially in major cities. Industry analysts claim that the maximum sale of vehicles - Peak Car - has been reached, or will be very soon, in most industrialised countries.
Last but certainly not least, we are on the very verge of witnessing a world of self-driving vehicles promising immediate, cheap and safe rides to any destination, while we work, read or simply kick back and let the driverless vehicles deliver us to our destination; not to mention, the many added value services made possible by telematics.
Indeed, the self-driving car market is expected to grow to over $87 billion by 2030, completely revolutionising transport. And once we can book a car to pick us up at any given time and place, and drive us to our destination, without even having to worry about parking, why would anyone want to own a private vehicle and have to drive it?
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