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#28 - Is car ownership over?

#28 - Is car ownership over?

šŸ’” One idea: Is car ownership over?

šŸ“ˆ One data figure: -0.4% fewer cars every year in London

āœØ One success: Zipcar, car-sharing for everyone

šŸ’” Is car ownership over?

Let's not deny it: transportation models are already disrupted by the climate crisis, and it will only get worse. Car ownership in particular is highly sensitive to oil prices, carbon taxes, and environmental and health policies aiming to reduce air pollution. Many argue that owning a personal car is now a concept of the past.

In large cities, owning a car is becoming a liability. There has been a persistent global trend towards urban living, with no signs of deceleration. According to The World Bank, 56% of today's global population lives in a city. This ratio should go up to 70% by 2050. Moreover, to the despair of the automotive industry, young generations drive far less than baby boomers, if they get a driving licence at all.

This slightly cocky report by RethinkX (2017) actually went as far as predicting the replacement of individual car ownership with a Transport-as-a-Service (TaaS) model by 2030. Right.... how do we get there?

  • Car leasing. Although this model has been around for a while, the novelty is the emergence of short leases. Companies are increasingly offering cars on a monthly, daily and even hourly basis.
  • Car sharing. I am referring here to peer-to-peer models such as ride-sharing (BlaBlaCar) or peer-to-peer rental (Hiyacar).
  • Non-auto transportation. Cities across the world are facilitating cycling and public transportation.
  • Travel less. Even without going down the degrowth route, are we going to continue to go on long road trip weekends, when we could instead support local festivities and build relationships in our neighbourhood?

With 1.4 billion cars in the world and a puny 4% annual replacement rate, any change will take a very long time to materialise. Ugh, turns out you don't get out of car addiction that easily! But tech improvements and cost drivers should accelerate the movement:

  • Autonomous vehicles progress and driverless taxis in particular will soon make owning a car even less relevant. Check out Google's Waymo and Cruise in San Fransico, and Appolo's Baidu in China, already available to the public. I can't wait to see them in London!
  • Using TaaS, rather than owning a vehicle that stays idle in the garage most of the time, will help households save up to 10% of their disposable income.
Forget Uber, call a Waymo

There are obviously cultural roadblocks and many people will not be getting rid of their personal car anytime soon. Some are simply not ready to share stuff with people they don't know, and others still rely on their car to express who they are (or who they would like to be).

But having fewer cars on our streets would make our cities cooler. Not only would we get more space for other purposes, but we would also get a break from all that noise and pollution. Cities are becoming more about people and less about cars. It's all happening right outside your door!

šŸ“ˆ -0.4% fewer cars every year in London

London (UK) has arguably one of the world's most restrictive legislation when it comes to driving in the city centre. The current mayor, Sadiq Khan (Labour), was elected in 2016 and has reinforced and implemented often contentious measures such as the congestion charge and the ultra-low emission zone.

Number of licensed cars in London, UK (in 1,000) (source)

The number of licensed cars in London increased by 18% between 1995 and 2016, culminating then at nearly 2.7 million vehicles. It has since been decreasing at a sluggish -0.4% annual rate. The decline is still timid but this trend reversal could be of structural importance. Who knows how far it will go and how it will impact the local economy?

P.S. Interestingly, we can notice the dip following the 2008 crisis. Nothing better than a good recession to slow down the growth of something bad for the planet...

āœØ Zipcar, car-sharing for everyone

Founded in 2000 in Massachusetts, the pioneering pay-as-you-drive car-sharing company had a bit of a bumpy start. Zipcar eventually expanded out of the US in 2006 and now also operates in Costa Rica, Iceland, Taiwan, Turkey and the UK. A successful IPO in 2011 valued the company at $1 billion before the share price fell dramatically. Zipcar was then acquired by the car rental agency, Avis Budget Group, in 2014 for $500 million. Long story short, it proved a successful venture and Zipcar now offers 10,000+ vehicles to its hundreds of thousands of clients across the globe.

You rent on an hourly or daily basis and unlock the car simply with your phone. There is no depot: the vehicles are scattered across the city, directly parked on the street. Because you more or less always use the same one, the nearest car eventually feels yours; you simply share it with your neighbours. Zipcar covers the cost of fuel, insurance, maintenance and parking, making it an extremely convenient and solid alternative to traditional car ownership.

You want to try it? Here is a referral link to get a unique $25 credit (I get the same).

The company's market capitalisation now approaches $1.5 billion (September 2023). This business model surely has beautiful days ahead. What else could we share the same way?

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Thank you for reading!
ā€” Colin Rebel