By John Rees
Since the darkest days of the recession, the fortunes of US automobile manufacturers have rebounded. Nonetheless, a long-term threat to their profitably is increasingly drawing attention. Today’s young professionals aren’t driving as much as their counterparts in years past. And the carmakers are nervous.
Last week, for example, Ford hosted a panel in New York to bust misconceptions about Millennials and their relationship to the automobile. Specifically, Ford’s goal was to “use data, trends and expertise to show that Millennials aren’t just a bunch of PBR-drinking hipsters who spin vinyl and ride bikes.”
So open a Michelob Ultra, turn off that turntable, and let’s look at the data.
Many of the panel participants, as well as several audience members, cited the growing burden of student loans and diminished economic prospects as the primary obstacle to car ownership. Of the two-thirds of students that graduate college with student loans, the average debt accumulated is $23,000. Which is nearly $10,000 more than the cost of the Ford Fiesta, the focus of Ford’s efforts to create a “movement” of young car owners. As soon as the economy fully recovers, the thinking goes, hipsters are going to ditch their fixie bikes in favor of a Ford.
There’s just one problem with this line of thinking—car ownership rates among young people have been declining for 30 years. In 1981, nearly 80% of people between the ages of 15 and 29 had a driver’s license. In 2001, this figure was barely 72%. Today, just 70% of eligible drivers under 30 have a license. According to a recent report by the US PIRG Education Fund, if these trends continue, “total vehicle travel in the United States could remain well below its 2007 peak through at least 2040—despite a 21% increase in population.”
Reduced demand for four-wheel transport has been compounded by Millenials’ clean, urban and carbon-free lifestyle choices. According to consumer research conducted by RCLCO, a land-use economics firm, 77% of young people plan to live in an urban core. As a result, many communities that have embraced live/work development patterns served by alternative transportation networks have succeeded in luring young professionals en masse. In Washington, DC, for example, young professionals have fueled virtually all of the city’s growth during the past decade. DC has helped spur continued growth through efforts such as its celebrated bike share program. In its first year, the bike share program was responsible for more than 1 million rides—50% more than originally forecast.
Communities with active talent recruitment and retention campaigns, take note: The success of communities and companies alike will in part be determined by their ability to provide appealing lifestyle options. Multimodal transit investment will pay off.