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Why Millennials Prefer Ride Sharing

  • by: Conor McKeon
  • On: 7, Dec 2018
3 min read

With rising concerns about the environment, expensive fuel costs and increasing congestion in urban areas, it’s no surprise that younger generations like Millennials and Generation-Z are turning away from traditional models of car ownership.

The rise of ride sharing apps like Uber and Lyft mean there is always a cheap alternative to get you where you need to go, with no further commitments or payments. Millennials make up over half of the rideshare market, and in cities the number of millennials buying cars is falling whilst ride shares are growing every day. While it initially took Uber six years to reach 1billion rides, six months after its ride shares doubled to 2billion. Lyft has even boasted that 250,000 of its customers have given up on owning a car entirely.

What does the increased popularity of ride-sharing mean for the Automotive industry?

Why Do Millennials Prefer Ride Sharing?

1. Ride Sharing Is Green

Hybrid and electric cars make up the vast majority of ride share vehicles, meaning they’re a viable alternative to traditional models for the environmentally concerned. This is a big factor for millennials, as society is made increasingly aware of the impact of fossil fuels on the environment and the limited options for ethical travel.

Ride sharing services reduce carbon footprint in terms of fuel used and should in theory reduce the number of cars in circulation and on the road.

2. Ride Sharing Is Cheap

All ride sharing services operate on a low-cost pricing model, competing for lower costs. Saving money is a key concern for millennials, with 40% reporting that saving money as the main reason they use ride sharing services. 78% of millennials say owning a car is difficult due to high costs. It would take thousands of rides to equate to the cost of buying, insuring, and maintaining a personal car. On average, a car costs around $30,000, loses value over time and goes unused for the vast majority of its life. Ride sharing is an obvious solution.

3. Ride Sharing Is Easy

Why Millennials Prefer Ride Sharing

Millennials are most likely to engage in the sharing economy, prioritising ease of access at a lower cost over compete ownership. As populations in urban areas continue to grow, our roads are becoming more congested, parking spaces more expensive and time more valuable. Ride sharing eliminates the need to worry about anything other than the journey, which is easy to arrange and allows the customer full control.

With all this contributing to the move away from traditional ownership models, it might be surprising that some car manufacturers are choosing to diversify into the ride sharing market. More millennials are seeing cars as an appliance instead of a long-term investment, so Automotive manufacturers are responding by creating fleets of cars that exist purely to service those needs.

Here’s How A No-Deal Brexit Would Impact the Automotive Industry.

Why Car Companies Are Investing in Ride Sharing

Automotive manufactures such as Mercedes are choosing to get ahead of the curve and enter the ride sharing market to generate new streams of revenue, but also to ensure their brand is synonymous with the green market to a younger audience. Almost all ride sharing services operate on hybrid or fully electric vehicles, which is a big pull for environmentally aware millennials.

As more and more people move away from owning a car, Automotive businesses companies will be adapting to new business models.

Discover How Car Design Has Changed, or read about the Strength of the UK Automotive Industry.

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