The private vehicle ownership model continues to erode in the minds of Americans, according to a survey of consumers by Cox Automotive.
Half of the respondents to the survey said that the cost of owning or leasing a vehicle is becoming too high — a sentiment that is driving more interest in on-demand and shared transportation services.
Nearly 40 percent of the 1,250 consumers Cox surveyed said that while access to transportation is necessary, owning a vehicle is not. For urban respondents, 57 percent said private vehicle ownership is not necessary to get from point A to point B.
Such findings continue to sound an alarm to an industry deeply invested in manufacturing, retailing and maintaining privately owned cars and trucks.
The auto industry is experimenting with new models. Mercedes-Benz, BMW and General Motors, for instance, have launched subscription programs and short-term rental services, where commercial owners own the vehicle and charge consumers for use.
These services create "a shift from personally owning a vehicle to consuming one as a service," said Isabelle Helms, vice president of research and market intelligence at Cox Automotive.
"Miles traveled will shift toward fleet-owned vehicles, causing what we believe to be a potential 40 percent reduction in consumer vehicle sales," Helms predicted.
According to the survey responses, ride-hailing services, such as Uber and Lyft, have the greatest momentum among the new transportation models — in both usage and mindshare. Nearly 40 percent of respondents said they use ride-hailing services. That is a 77 percent increase from a similar survey in 2015.
While ride-hailing is most popular in major metros, its growth is also taking place in the suburbs. Ride-hailing usage in suburbia is up 21 percent from 2015, compared with the 18 percent uptick in urban areas.
Car-sharing is seeing more muted growth and is fueled by millennial and Gen Z consumers. Although this short-term rental model has been around for two decades, it has experienced pocketed growth, with awareness at 54 percent, according to the Cox study. Inadequate access to sharing has put the brakes on mass adoption. In urban areas where car-sharing is most prominent, 44 percent of consumers find it accessible, compared with the 85 percent of consumers who find ride-hailing accessible.
The short-term rental market is fragmented, giving consumers a lot of options and leaving no clear leaders in usage. The top five players account for less than half of the total market. By comparison, the ride-hailing space is more consolidated, with Uber and Lyft controlling 97 percent of that segment.
But a new transportation model — vehicle subscription programs — is being powered by younger and more tech-savvy consumers, Cox reports.
Instead of forcing consumers to buy one vehicle that attempts to meet every driving need, subscription programs give customers access to different vehicles for changing needs — an SUV for when extended family is in town; a convertible for a weekend getaway; and a compact for the downtown commute.
A fourth of the consumers surveyed said they are now aware of vehicle subscription services offered by automakers and dealer groups.
Subscription services are most appealing to young males and new-vehicle buyers. One-tenth of those asked said they would be open to a subscription service, instead of purchasing or leasing a vehicle.