Companies like Uber and its myriad competitors, including Lyft and Sidecar, turn car owners into taxi cab drivers for people who cannot afford a car or do not want the responsibility of owning one. Moreover, Getaround and RelayRides turn car owners into car renters. Car owners can rent their cars out to people who can drive but don’t want to own a car.
Studies show that the millennial generation is shying away from total car ownership. On its website, Ford Motor Co. (NYSE: F) highlighted a study from Penn Schoen Berland, indicating that 33% of millennials want to rent out their stuff for cash and half of that generation is willing to share rides. The L.A. Times cites the Vice President of Gartner research “who estimates that by 2025, 20% of the vehicles in urban centers will be dedicated to shared use.” Rightfully, millennials want to do this as a way to reduce the cost of car ownership and in an effort to save money.
Notably, Ford acknowledged this changing transportation dynamic last week when it announced two new initiatives: Peer-2-Peer Car Sharing and GoDrive. The Peer-2-Peer Car Sharing program, an experimental program, allows people in select cities who financed their cars through Ford Credit to rent their cars to other people “to pick up extra cash.” Interestingly, Ford partnered with Getaround and London’s easycar to provide the mobile software to enable this program. GoDrive essentially offers drivers the opportunity for short-term car renting offering minute to minute pricing.
Studies from AlixPartners show huge growth in car sharing, to the tune of 30% per year. Car manufacturers simply cannot ignore this new transportation dynamic and will need to invest considerable sums of money in these types of programs in the future. The days of car ownership as a symbol of status and identity may not be gone, but they have certainly faded.