Like so many public automotive exhibitions, Las Vegas' Consumer Electronics Show (CES) has been taken over by the marketers. Just five years ago, what was once a never-ending fount of actual information sharing — threatening to oust Detroit as North America's premier auto show — has become just another home for the blathering glitz of MBAs seeking angel investors. Every dreamy keynote speaker who takes to the stage spouts some version of the same tired pledge: Technology will be our savior, sharing is the new economy and the public is literally chomping at the bit to get its hands on autonomous automobiles.
Dig a little deeper — into the actual statistics said futurists are trying desperately to ignore — and the news isn't quite so rosy. Certainly it's a lot less clear-cut. Indeed, while some of the news may be good, some of it is actually quite bad and still more of it is, well, just real.
Ride sharing is dead
Not that it was ever really alive — Motor Mouth
has long detailed the fallacy
that communal cars are the future of mobility — but what little momentum ride sharing might have once had seems to have long since dissipated. According to a new study by Cox Automotive, car sharing is actually down in America's top mobility markets — large urban sprawls such as New York, Los Angeles and Seattle — over the last few years. There's been a slight uptick in sharing in secondary markets, but overall, Cox research indicates that, despite all the hype in the media about an impending car-sharing revolution, car sharing is only up a few percentage points since 2015. And that's not because people don't know about car-sharing services; Cox says almost three-quarters of Americans are aware there is an available alternative. They simply choose not to use Zipcar, Car2Go and the like.
Uber is booming, but growth is slowing
I don't think I need to tell you about the incredible impact ride-hailing has had on mobility. Taxi ridership is down, ride-hailing apps continues to steamroll — there are an estimated 60,000 part-time Uber and Lyft drivers in Las Vegas serving a whopping 42 million visitors each and every year — and according to Cox, usage is up some 75 per cent in just the last three years. What makes Uber et al truly unstoppable is that, while the traditional urban markets continue to grow, both suburban and rural usage have also doubled over the last three years. Hailing a ride through a smartphone app has truly become ubiquitous …
… but not routine. According to Pew research released just last week, while 36 per cent of U.S. adults say they have used a ride-hailing service at some point in time — more than double the usage from three years ago — 'a mere four per cent of the U.S. adult population today uses ride-hailing apps on a weekly basis.' That share, says Pew, is largely unchanged from 2015, when three per cent of Americans reported being weekly riders. In fact, according to Pew's numbers, less than one in 10 ride hailers use their apps weekly, another 22 per cent are monthly users, but the vast majority — 67 per cent — utilize Uber and Lyft less than once a month. What this means is that …
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… Uber desperately needs a monopoly
The scuttlebutt on Wall Street, at least according to Bloomberg
, is that Uber wants US$120-billion from its highly anticipated IPO. Now, never mind that, with the scandals surrounding high-tech — Mark Zuckerberg is having as much trouble staying out of the press these days as Elon Musk — some analysts say it may only generate US$90-billion, neither of those numbers are going to be sustained by three or four per cent consistent market penetration. Nor are electric scooters or grocery delivery likely to make up the shortfall. No, what Uber needs, if it's going to justify such astronomical evaluations — equal roughly to the market caps of GM and Tesla combined — is a monopoly.
Which is exactly what it wants. As Motor Mouth
has previously detailed
, Uber (and Lyft as well as other ride-hailing services) are signatories on a program called Shared Mobility Principles for Livable Cities
, which states, with amazingly bland equanimity, that in the future all 'autonomous vehicles in dense urban areas should be operated only in shared fleets.' In other words, if we are to believe the futurists' claim that, in the not too distant future, all automobiles will be autonomous, Uber and its mini-me ride-hailing clones would have a complete monopoly on all the cars operated in all the big cities in North America. That, my friends, is how you justify a US$120-billion IPO evaluation.
Subscriptions are the paradigm shift to bet on
For those worrying that private 'ownership' automobiles are set to disappear, Cox's research seems to point to the new subscription-based model sweeping the industry as the salvation. For instance, though car subscriptions are barely a year old, Cox's research indicates that fully one-quarter of consumers are aware of their existence, heady numbers well ahead of ride hailing or car sharing in their infancies. More importantly, fully one-sixth of Millennials told Cox that they are already prepared to switch from the ownership model to a subscription. Overall, 10 per cent of consumers — including eight per cent of Baby Boomers — are ready to subscribe to, rather than own, a car.
Perhaps, the most important news out of Cox's study, however, was the (almost buried) little tidbit that…
… Millennials don't hate cars after all
As it turns out, one of the primary motivating factors for those Millennials willing to sign onto an automotive subscription agreement was the ability 'to drive a variety of vehicles.' In fact, jumping from car-to-car ranked second only to access to the latest in-vehicle technology as their reason to subscribe rather than own a car. More importantly — certainly, more surprisingly — Millennials were more than twice as likely (35 per cent versus 15 per cent) than supposedly car-loving Boomers to agree they'd 'prefer to drive a variety of vehicles.' Perhaps there's hope for our youth yet.