Ride-Sharing: Is It Really the Future of Transportation?

Don’t believe everything you see on the news folks! There is an overwhelmingly common misconception that consumers (Millennials especially) are ditching their own ride and hopping into someone else’s! This simply is not true! As Millennials age into the next phase of their life they progress into the same structure people before them always have… owning their own home AND owning a vehicle (which is most likely a crossover or SUV).

One fact still remains consumers like having a choice. It's all about "freedom and flexibility" of owning a personal vehicle to ride-hailing services, says NADA’s Jonathan Collegio. He continues by adding, “This sentiment cuts across all demographics and is a durable, fundamental desire of most consumers, even millennials. Ride-hailing will continue to supplement personal vehicle ownership going forward, but it will not supplant it.”

In March of this year NADA commissioned a survey of 1,200 consumers fielded by Luntz Global. The ultimate goal was to see whether having grown up with mobile and on demand apps, whether there would be a noticeable difference between interest in owning a car between younger consumers and the remainder of the population. Collegio, NADA’s senior vice president of public affairs, did note that the survey was over-indexed for Millennials. Ultimately the vast majority of consumers still wanted to rely on a vehicle of their own versus depending on a ride share app to get them from point A to point B.

Key findings from the study include:

Nine out of 10 respondents (89%) said they would rather continue owning a car, versus one out of 10 respondents (11%) who said they would prefer using ride-hailing as their exclusive mode of personal transportation. This question was asked after presenting the strongest arguments for the safety, affordability and accessibility of autonomous ride-hailing services.
This sentiment is overwhelming even among millennials, who prefer vehicle ownership by a 80-20% margin. Importantly, millennials in the suburbs or rural areas were six points less interested in ride-hailing than their urban counterparts.
Consumers overwhelmingly view vehicle ownership as convenience, not a cost-drag or nuisance to own, as several studies suggest. Only 6.5% of consumers in the survey viewed owning a car as a hassle or costly nuisance.
Consumers view wait times as a significant drawback of ride-hailing services. More than 88% of consumers said they would need to save at least $15 per day to incur an hour of aggregate waiting for ride-hailing services over a day. Half of consumers in the survey said they would need to save $50 per day to incur an hour of aggregate waiting time.
Consumers are generally open to autonomous vehicle technology. 56% of consumers said they would purchase a fully or highly autonomous vehicle, while 44% said they would not.
Consumers by an 80-20 margin would prefer to capture 80% of the safety benefits from semi-autonomous vehicles they can still drive, as opposed to 100% of the benefit from fully autonomous, driverless vehicles.

In summary it looks like people still love to drive a good bargain and drive their own car off the dealership lot. Convenience is not king in the automotive market just yet. Study findings found here: https://blog.nada.org/2018/03/27/consumers-overwhelmingly-see-personal-vehicle-ownership-as-key-to-future-mobility/

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automotive