Millennials: generation (car) sharing

Millennials: generation (car) sharing

Ownership is no longer a priority: the younger generations prefer sharing, but it’s not just for financial reasons. Car sharing is now replacing an ownership model that seemed set in stone

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“Imagine no possessions.” John Lennon could see far ahead into the future but perhaps not even he could have imagined that his utopia would become reality, thanks to the generation born after his death.

It is a phenomenon that Forbes magazine calls NOwnership. The younger generation appears to value access over possession and experiences over ownership. This is the case for cars, homes and more: buying goods does not have the same value for millennials as it did for their parents or grandparents. And when it comes to music and films: how many of the generation that grew up with peer-to-peer technology now own a CD or DVD? This tendency has inspired law professors Aaron Perzanowski and Jason Schultz to posit “The End of Ownership” and the end of the concept of private property.

 

Not only digital

The concept of sharing was first broached in the digital world, later spreading to the physical realm but always maintained a strong connection with technology. “The sharing economy was made possible thanks to the extraordinary efficiency of the digital market and the decision by young, rather sceptical adults to trust systems of peer-to-peer valuation,” explains Paul Taylor, author (with the Pew Research Center) of a wide ranging research paper on the younger generations. Taylor believes that the sharing economy “Will keep growing, even if I don’t believe that people will abandon the idea of property completely.”

Rachel Botsman, the British author of the ‘bible’ of collaborative consumption “Who can you trust?”, says “My generation is moving from a culture of ‘me’ to a culture of ‘we.’” This sharing culture is spreading fast because of technology, in particular “Sharing through the smartphone in the era of being permanently connected.”

 

Experiences, not goods

Caren Maio is a successful Millennial: she is the founder and CEO of a real estate leasing company. She explains: “In just a decade, the American Dream of homeownership has lost a good deal of its lustre. In its place, renting, long considered a stopgap solution, is quietly emerging as the new American choice.”

Renting, however, is not the only option. It is a sign of the times that the Copenhagen-based, SPACE10, a spin-off of IKEA, and the American company Anton & Irene have launched the One Shared House 2030 co-living project, which has involved over 80,000 people worldwide to date. According to the Financial Times, “From New York and London to New Delhi and Shanghai, millennials are increasingly blurring the lines between home, work and play - sharing spaces to save money and time as well as make new friends.”

The younger generations appear to prefer spending money on concerts, sport, wellness, restaurants and travelling rather than purchasing a single ownership home with a multi-decade mortgage. Even the idea of a futuristic walk in space attracts millennials far more than the other generations. Experiences are considered the essential ingredients to wellbeing, and these are even better when shared with others. There are young but wise: they have realised that nobody can steal their memories, nor will they lose value in a financial crisis. It is therefore not surprising to learn of the significant drop in residential real estate sales in the United States in less than 10 years, while the amount spent on events and entertainment has grown. A tendency that has been dubbed the “Experience Economy”: following on from goods and services, experiences are now up for sale.

 

The car is no longer a status symbol

This trend is even more evident in the automotive industry. The car was a status symbol, a fetish, for many an extension or an addition to one’s identity. The purchase of the first car was an event to remember, a rite of passage, like becoming an adult, graduating from school or getting one’s driving licence.

Now the “car obsession” (as the American sociologist Gary Cross calls it) is disappearing. Taking its place, the growing use of car sharing, ride sharing or car-pooling. The younger generations are pragmatic: it costs approximately $30,000 to own a car, which loses value with every mile travelled and is generally left unused for 90% of the time. In addition, there are the costs of upkeep, insurance, fuel and parking to consider. So, it is preferable to pay for it only when you use it (pay per use) or to ride a bicycle. A social model that has survived economic crises and world wars once seemed unbreakable but is now disintegrating before our eyes.

All the signs point not to a passing fad but to a tendency destined to become mainstream. This is being confirmed by the post-millennials, those born after 2000 that are coming out of adolescence now and demonstrating many similarities in habits to their older siblings. “In 25 years' time, car sharing will be the norm and owning a car will be an anomaly,” states the economist Jeremy Rifkin.

The preferences and behaviour of young consumers have sparked a profound change in the automotive industry. The most far-sighted companies have foreseen the future tendencies of the market. The big car manufacturers, from Mercedes to General Motors, from FCS to the Chinese Lynk & Co, are already participating in car sharing initiatives and producing car series that are already fitted out for sharing; with a careful eye on the youth market, of course.

 

The cities of the future

What are the consequences of this revolution? There is much optimism for the future of urban development. Fewer private cars on the roads will mean a reduction in traffic and an improvement in air quality in the larger cities with a consequent increase in quality of life for their inhabitants. There will be less need for parking spaces and many urban areas could be recovered and used to provide green spaces. After all, care for the environment is one of the reasons, albeit not the main one, leading millennials away from the old model of car ownership. It’s clear why: it is their future at stake, their world.

The environmental advantages of car sharing will be further enhanced by the use of electric vehicles, already a popular combination among the younger generations. Likewise, car sharing can encourage the use of sustainable mobility: the shift to electric vehicles will no longer be left to individual choice, but will be decided for entire fleets. The environment and our health will be thankful.

Just one step further ahead and we are in the realm of autonomous vehicles. Science fiction? The technology already exists and there are many tests on-going around the world: in this case too, the car manufacturers have been preparing for the change. In 2016, for example, Daimler CEO, Dieter Zetsche, announced a corporate emphasis on the CASE model: “Connected, Autonomous, Shared, Electric.” The cities of the future will be filled with fleets of autonomous vehicles that are shared rather than owned: removing the exertion of driving and, with less traffic, reducing the time it takes to get from one place to another as well as the number of accidents.

We are only at the start of this revolution and, already, it is changing habits and lifestyles in our cities. Thanks to generation (car) sharing: the grandchildren of John Lennon.

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