Having a car these days seems similar to “consuming content” on print; it is a behavior mostly seen as reserved for the older set. Because millennials’ and younger people’s interest in owning a car has been observed to be declining for over a decade now. And, recent studies show, it is a trend that — though not picking up too much speed — nonetheless remains steadily on cruise control.
In the 2020 paper “Young People and the Private Car: A Love-Hate Relationship,” researchers found a “simultaneous decline” in the number of young people holding a driver’s license and those using their private car in OECD member-countries — the most developed economies in the world. The study noted the behavior could “potentially persist into the future, leading to a significant shift in future car-driving demand.”
In the US, slightly less than 60% of 18-year-olds have driver’s licenses in 2022, according to data from the Federal Highway Administration. Some 40 years earlier, a full 80 percent of Americans of the same age possessed a driver’s license.
Mainstream media has been as observant on the trend. The Economist in early 2023 ran the headline “Throughout the rich world, the young are falling out of love with cars” while a Washington Post article from around the same time carried the title “‘I’ll call an Uber or 911;’ Why Gen Z does not want to drive.” It should be noted, though, that these articles were cited by Bloomberg in its own piece published weeks later; “Gen Z’s turn against driving is a mirage.”
So while there are indications to the contrary, with other groups pointing out there simply isn’t enough information about the phenomenon yet, some factors are emerging as probable reasons why car ownership is indeed losing its appeal among the young.
Chief among these are the cost of buying, maintaining and using a car, something prohibitive to “poorer” (compared to preceding generations) youths even in affluent societies; a genuine concern for the environment, in which going carless equates to reduced carbon footprint; and a change in lifestyle, given the rise in adoption of remote work set-ups, digital transactions, and online social interaction. Of course, there is also the more fundamental reason that cars are no longer perceived as status symbols as much as these were by generations past.
The availability of alternative forms of transportation appears to play a huge role, too. And, while this encompasses such options as using bicycles, e-bikes and scooters, if not pubic transportation itself, shared mobility has emerged as a dominant force in this space.
Interestingly, shared mobility addresses — or is linked with — the chief factors identified as likely causing the youth’s apathy toward car ownership. The “Shared Mobility’s Global Impact” report, released in 2023 by US consulting firm Oliver Wyman, noted “only half of the world’s population has access to public transport,” limiting a way into jobs, education and social inclusion. So those who can afford choose to commute by car, “in which case they are contributing to congestion, pollution and greenhouse gas emission.
“Shared mobility has emerged as a potential solution offering sustainable, efficient, safe and affordable transport on demand,” the report said.
Another option hailed by young people is the vehicle subscription service — gaining the right to use a car via a recurring fee, all without having to buy or lease it. The 2024 Global Automotive Consumer Study by Deloitte offers insights on this, particularly with youths in Southeast Asia. It cited that, due to economic uncertainties, “a significant number of younger consumers” are “somewhat interested in giving up vehicle ownership altogether in favor of a subscription model.”
Among respondents aged 18 to 34 years old from Indonesia, Malaysia, Singapore, Thailand, Vietnam and the Philippines who were polled for the study, listed as the top advantages drawing them are the convenience and flexibility offered by a vehicle subscription service — no car maintenance-related hassles, nor long-term commitments necessary. Major concerns, on the other hand, are the availability of models to choose from, and the waiting time for models desired.
What is more significant is the percentage of young people polled who are willing to give up car ownership altogether, and instead are interested in opting for vehicle subscription. The figure is highest in Vietnam at 60 percent, and lowest in the Philippines at 38 percent.
In all this, it appears that while most young people may not be inclined to buy a car anymore, they are not entirely giving up on using one. Which then leaves car purchases not in the hands of direct users, but to service providers. Or, Dad.
