Why buy the car when you can buy the trip? How the ‘Peak Car’ era is ending

Peak Car
If you live anywhere near a big city, chances are good that you’re already frustrated with traffic. The simple process of getting from home to work to the grocery store and gym and then back home again is a painful ordeal for most of us. What’s worse is the inability of American governments at all levels to even begin to agree on the nature of the problem, much less to implement any solutions.

One thing that is becoming obvious is that, at least in the bigger cities, the age of the automobile has passed its prime. Broad-based changes in the way we live and move around are emerging as people vote with their feet for alternatives.

If we’ve truly reached “Peak Car,” what’s next?

The urban renaissance

David Metz is a visiting professor in the Centre for Transport Studies at University College London, and formerly Chief Scientist at the UK Department for Transport. Metz has made a careful study of people’s transportation choices, particularly around London.

“The future of mobility is not about paying for the car, it’s about paying for the trip.”

“We had a 50-year period from about 1945 to about 1990 where cities were losing people, moving out to the suburbs,” Metz tells Digital Trends. “What we’re now seeing is a revival of cities – not everywhere, but in many places. Cities seem to be where the action is, economically and culturally.”

As people move back into cities, the rational choices they make are different than the ones their parents made a generation ago when they left for the suburbs.

“We’re seeing a phenomenon where younger people who finish college and get their first jobs in an urban area have accumulated a lot of student debt and they’re paying high rents,” Metz says. “They find that they don’t need a car for an urban lifestyle where they’ve got alternative means of transport available.”

Automobile travel is falling

Data published by the University of Michigan shows that Peak Car is happening in cities across America. Car ownership, miles driven, and fuel usage are all down from their peaks about 10 years ago.

Peak Car in a big city is easy to understand. Cars cost a lot of money, traffic is horrible, parking is nonexistent, and there are other transportation options readily available including walkable neighborhoods, mass transit, taxis, and car-sharing enterprises. Given all those options, more people are choosing not to own cars.


“I focused on London because we’ve got probably the best data on transport of any city in the world,” Metz says. “What you see in London is that car traffic has been flat for 20 years now, and in fact it’s declined slightly. But because the population is growing, that means the share of journeys by car has been falling. That’s also happening in many other cities, though the data is less available.”

No one can imagine London without the Tube, or New York without the subway, but even with legendary mass transit systems, these cities continue to experience some of the worst traffic jams in the world. It’s no surprise that in such an environment, many people decide not to invest their money and time in owning a car.

Growing alternatives

Even as large numbers of people make the decision to delay car buying or refuse ownership altogether, opportunities have flowered for distributed rental enterprises such as Zipcar and Car2Go, as well as freelance taxi services like Uber and Lyft.

Cars generally are sitting idle 95 percent of the time, which is a terribly inefficient use of the product.

“The future of mobility is not about paying for the car, it’s about paying for the trip,” says Lindsay Wester, Public Relations Manager for Zipcar. “It’s about access over ownership. Our customers report savings of up to $600 a month on average compared to car ownership.”

Both Wester and Metz reference data showing that the average car sits unused up to 95 percent of its life.

“That is a terribly inefficient use of the product. So if you can set up ways of sharing, that’s really quite attractive,” Metz tells Digital Trends. “People who share a car drive less than people who own a car. The problem is coping with peak use, where I think rail is the most efficient means. Even if you increase the occupancy of taxis, it’s still difficult to accommodate that number of people.”

The Millennial Shift?

It’s common to relate changes in driving habits to a generational shift, but Zipcar’s Wester reports that the trend away from car ownership has more to do with lifestyle than with age.

“Urbanites regardless of age are just as likely to adopt car-sharing as a millennial,” Wester tells Digital Trends. “Our customers range from age 18 to 93, and the average age of a Zipcar member is 36 years.”

There are two other trends driving Peak Car, and one of them may surprise you. The unsurprising force is the maturation of the Internet. Why go out and battle traffic to shop for specialty products when you can buy online and have exactly what you want delivered to your door? Every time you shop online, you’re eliminating at least one car trip, because delivery vans fulfill hundreds of purchases a day with just one vehicle on the road.

The less obvious trend pushing Peak Car is increased life expectancy. As people can look forward to more years ahead of them, they tend to put off personal transitions such as marriage and childbearing. Those transitions typically lead people to buy a car and a larger house, so the longer people wait the more likely they are to continue a car-free urban lifestyle.

“We think about life expectancy mainly in terms of an aging population,” Metz observes. “But it also allows people a longer time to mature. So instead of settling down in their twenties to family life, they settle down in their thirties. We see a steady increase in the average age at which women are having children. Wherever you look at developed countries, the portion of younger people holding driver licenses has been steadily falling.”

Related: In the rich world, people seem to be driving less than they used to

Even after marriage and children, habits that people have formed will tend to persist. “The historic relationship between growing car ownership and growing income has largely come to an end,” Metz tells Digital Trends. “Anyone who needs a car will have one, but if you do not own a car by choice, as your income goes up you probably won’t choose to acquire a car. At least not while you’re living in the city.”

What does Peak Car mean for you?

In practical terms, the notion of Peak Car is more interesting to city planners and automakers than to you as an individual. No one is going to force you out of your car if you choose to have one. Peak Car is simply a reflection of the aggregated decisions that millions of people make about how they get around.

“The key thing is population growth. Where population is growing, demand for all forms of transport will be growing,” Metz says. “Broadly speaking, if the extra people are accommodated in suburbs or rural areas, they’ll want cars. But if the additional people are housed at high density in urban areas, then the need will be to invest in transit because the scope for additional car use in urban areas is quite limited.”

Automakers are following the Peak Car phenomenon closely. A generation that enjoys a car-free urban lifestyle may never depart for the suburbs and become car buyers. A broad trend in this direction could lead to flat new car sales for decades.

To stay ahead of that curve, automakers as diverse as GM, Audi, BMW, Ford, and Smart have all test-marketed their own car-sharing subsidiaries, with varying levels of success.

We reached out to several automakers to get their perspective on this, but although they declined to comment, their actions speak louder than words. Ford, for example, stressed at this year’s Detroit Auto Show that it is a mobility company as well as an auto company. This was punctuated by the announcement of FordPass, one of many initiatives to interact with customers and experiment with car-sharing.

If you live in a city, Peak Car could mean that traffic will get better, or at least not get any worse, over time. Peak Car may also mean that if your city gets serious about effective mass transit and car sharing, you won’t ever need to own a car.

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