Monday, July 1, 2013

Understanding the Millennial Generation and their Relationship with the Automobile

According to the press and the some analysts within the Detroit Three, the Millennial generation is not totally sold on loving automobiles. There are all kinds of rationalizations as to why this group of folks has avoided getting drivers' licenses and purchased motor vehicles.  And among the explanations is one connecting Millennials to electronic technology, especially cell phones, computers, Ipads, etc., etc.  Here are my notes from a recent article written for the New York Times and picked up by the Dayton Daily News:

Elisabeth Rosenthal, "Study: Americans buying fewer cars," Dayton Daily News, June 30, 2013, p. A10.

Recent studies suggest that Americans are buying fewer cars, driving less and getting fewer licenses as each year goes by.
That has left researchers pondering a fundamental question: Has America passed peak driving?
But America's love affair with it s vehicles seems to be cooling. When adjusted for population growth, the number of miles driven in the United States peaked in 2005 and dropped steadily thereafter, according to an analysis by Doug Short of Advisor Perspectives, an investment research company.  As of April 2013, the number of miles driven per person was nearly 9 percent below the peak and equal to where the country was in January 1995. Part of the explanation certainly lies in the recession, because cash strapped Americans could not afford new cars, and the unemployed weren't going to work anyway. But by many measures, the decrease in driving preceded the downturn and appears to be persisting now that recovery is under way.  The next few years will be telling.
"What most intrigues me is that rates of car ownership per household and per person started to come down two or there years before the downturn," said Michael Sivak, who studies the trend and is a research professor at the University of Michigan's Transportation Research Institute. "I think something more fundamental is going on."
Companies like Ford and Mercedes are already rebranding themselves "mobility" companies with a broader product range beyond the personal vehicle.
"Different things ae converging which suggest that we are witnessing a long-tem cultural shift," said Mimi Sheller, a sociology professor at Drexel University…. She cites various factors: The Internet makes telecommuting possible and allows people to feel more connected without driving to meet friends. The renewal of center cities has made suburbs less appealing and has drawn empty nesters back in. Likewise, the rise in cell phones and car-pooling apps has facilitated more flexible commuting arrangements, including the evolution of shared van services for getting to work.
On top of that, city, state and federal policies that for more than half a  century encouraged suburbanization and car use-- from mortgage lending to road building -- are gradually being diluted or reversed. "They created what I call a culture of automobility and arguably in the last 5 to 10 years that is dying out., Sheeler said.
Demographic shifts in the driving population suggest the trend may accelerate. There has been a large drop in the percentage of 16-to39 year olds getting a license, while older people are likely to retain their licenses as they age.
A study last year found that driving by young people decreased 23 percent between 2001 and 2009. The Millennials don't value cars and car ownership, they value technology -- they care about the devices you own. The percentage of young drivers is inversely related to the availability of the internet, Sivaks research found. Why spend an hour driving to work when you could take the bus or train and be online?
Also from 2007 to 2011, the age group most likely to buy a car shifted from the 35-44 age group to the 55-to-64 group.

So I am currently teaching a class of Meillennials, and asked them today if they prefer to communicate electronically or in person. The more I thought about it the more I began to think that if it is true that the Millennials do not prefer face-to-face interaction and instead want to text and email, the more I thought that can't be right.  Except for very long distance issues.  And indeed that is what my class told me.  So this thesis about the internet and the inverse proportion to young drivers doesn't make sense, except maybe on the West Coast or where there are very high population densities and superb mass transit options.

More on this later!

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