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Archive of posts published in the category: Shaping
Apr
26

Demographic Shifts: Shaping the Future of Car Ownership

Cars have been at the heart of American culture for more than a century. Until recently, getting a license and buying a car were considered rites of passage, and the car you chose was widely regarded as an expression of your identity, reflecting your priorities and revealing your status.

All that is now changing. The advent of car sharing, ride-hailing and self-driving vehicles presages a radical transformation in consumer behavior. The future of personal transportation will be determined by technological advances, informed by the needs and desires of the people who use them. Our understanding of who those consumers are and what choices they are likely to make is changing in surprising ways.

Car-loving Boomers Are Headed for Cities

Consider baby boomers, the generation born between 1946 and 1964. They may no longer be the largest generation in the U.S. (their kids, the 19- to 35-year-old millennials, now outnumber them slightly), but boomers are likely to continue playing a major role in shaping the future of the auto industry and the rapidly evolving “sharing economy.”

Given the boomers’ affection for cars, it’s not surprising that adults over 50 bought nearly two-thirds of the new cars sold in the U.S. in 2011, according to an AARP study. Unlike earlier generations, today’s seniors “are refusing to follow their parents’ lead and go quietly into the car-buying night,” according to a 2013 article in Bloomberg News. In fact, nearly 93% of Americans between 60 and 64 had driver’s licenses in 2011, up from only 84% in 1983.

What is surprising is that seniors are participating in the well-documented mass migration to urban centers. Despite the common assumption that millennials will dominate the urban landscape in the coming years, recent studies suggest that boomers are also locating there in droves. “Instead of migrating south en masse to retirement communities in the Sunshine State or the wilds of Arizona,” wrote Realtor.com, “more and more baby boomers — a particularly urban-savvy group of Americans — are moving back to the metro areas they abandoned when they began raising families.”

And these older urbanites are anything but sedentary. Rather than retiring, 87% say a shorter commute to work is a major reason for their move to the city, according to a recent Zipcar study. Moreover, when they are not working, the study said, “An overwhelming 90% are seeking to boost their cultural experiences, with easy access to a variety of restaurants, shops and fitness facilities.”

“Millennials have a lower rate of car ownership than previous generations at their age.” –Sam Abuelsamid, Navigant Research

All this activity makes urban boomers active consumers. “Between 2015 and 2030, the 60-plus age group in the United States, for instance, is projected to contribute 40% or more of consumption growth in categories such as personal care, housing, transportation, entertainment, and food and alcoholic beverages,” reported a 2016 study by the McKinsey Global Institute titled “Urban World: The Global Consumers to Watch.”

For boomers who keep their cars in the city, ride-hailing offers