53°F
Sponsored by

More Car-Sharing Means Fewer Car Sales

CBSNews -- While U.S. auto sales were good last year, they might have been even better if it weren't for car-sharing services, which have cost automakers about 500,000 new car sales in the past decade, according to a new study. The report by AlixPartners says this number will increase as more people take advantage of these services and give up owning cars.

While U.S. auto sales were good last year, they might have been even better if it weren't for car-sharing services, which have cost automakers about 500,000 new car sales in the past decade, according to a new study. The report by AlixPartners says this number will increase as more people take advantage of these services and give up owning cars.

America's love affair with the automobile isn't what it used to be. From the 1960s until 2006 the number of families without a car declined every year. Then in 2007 it started to grow, from 8.7 percent to 9.2 percent in 2012, according to the University of Michigan Transportation Research Institute. Although the recession had something to do with that, the change began before the financial crisis. Fueling that shift has been car-sharing services -- like ZipCar, RelayRide and others -- which give people easy access to cars for less than it costs to buy a new one. 

In fact, 2007 was the year ZipCar -- the largest car-sharing service -- merged with No. 2 FlexCar, an event that some consider the tipping point for these services. In 2013 membership in them topped 1 million for the first time. Now, AlixPartners, a Michigan-based business advisory firm, predicts the number will be four times that size by decade's end.

According to the study, each car added to the fleets of these services means 32 fewer new car purchases by families and individuals. The company predicts that by 2021 these services will mean an 1.2 million fewer new cars sold in the U.S.

In an effort to see how much of an impact these programs are having on auto purchases, AlixPartners looked consumer behavior in 10 cities: Austin, Texas; Boston; Chicago; Miami; New York; Portland, Ore.; San Diego; San Francisco-Oakland; Seattle; and Washington, D.C. In those cities 43 percent said they hadn't considered car-sharing at the time of their last purchase, 18 percent said they had little to no interest in it and 25 percent said they would likely consider it in the future.

"We focused on the markets where car-sharing services have achieved a degree of scale," AlixPartners' Mark Wakefield said in a statement. "Our study suggests that Americans' willingness to avoid vehicle purchases due to growing car-sharing options is higher than many have thought, further suggesting that the auto industry ignores or minimizes this trend at its peril."

Younger people, households with children and those with higher levels of education were the most likely to use a car-sharing service instead of buying. This means carmakers are losing the battle with three key demographics. The biggest reasons for using these services were cost and convenience: More than half of all users said the cost of a new car was too high and that owning and upkeep were too much of a hassle.

More bad news for carmakers: This is a conservative estimate. The study didn't include the peer-to-peer services like Uber, Lyft, Sidecar and Wings, which connect drivers with riders via smartphone apps for taxi-type ride-sharing. And even though actual taxi companies are trying to get government to rein in these services, their growing popularity may make them unstoppable.

Page: [[$index + 1]]
comments powered by Disqus