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Abandoning Car Ownership

Apps like DriveNow and Uber might just be doing to vehicles what the Internet did to newspapers (well, biased and misguided reporting certainly has not helped newspapers). There are multiple studies which have shown that people want to reduce their ownership of cars and rely on ridesharing apps like Lyft and Uber now.

This is certainly the case in large cities but for people living in areas that are not congested, owning your own car/s is still the way to go.

 

To Own or to Not Own

Some people tend to stick to Lyft and Uber in certain urban areas where these services are available and even in the areas where they aren't in some select few cases, people tend to switch to similar apps rather than buy cars. It is cheaper after all.

If you don't want to look at studies and prefer looking at real-world statistics, the picture isn't any different. As for actual vehicles on the road, manufacturing has fallen by 14 percent this year as per official sales stats. This is the third straight month of decline as far as new car manufacturing is concerned. This is despite the fact that the economy is growing and unemployment is at a record low and these outstanding numbers will only continue when the ACA health care law is redacted, competition is brought back into the mix, and when taxes are lowered.

Even new sales of new cars are on their way down. New car registrations have been declining for four months straight and an increase in excise duty on vehicles has only made matters worse.

While consumer vehicle finance debt continues to grow, it has slowed down quite a bit in recent times as per stats put together by the Bank of England.

 

Traffic Woes

Of course, apps like Lyft and Uber have only been in use for a very short period as compared to how long we've been driving cars for and it's not fair to make any assumptions just yet. These apps aren't really available throughout the US either.

Until recently, many people had feared Uber was doing nothing but adding to the large number of cars already on the road. But, the fact of the matter is that the number of vehicles on the roads is not increasing as rapidly as the number of drivers. The number of licensed drivers on the road has gone up from 65,000 to 117,000 while in the same period the number of cars on the road has gone up from 50,000 to 87,000.

The only way this is possible is if there are more Uber-style ride-sharing cars on the road. Overall, this is decreasing the aggregate demand for cars and resulting in fewer cars on the road.

On the plus side, the biggest advantage of so many people opting for ride-sharing instead of buying cars is that it has reduced the traffic on the roads. It has also gotten rid of the parking problems that have plagued so many cities and really still does.

There are multiple ways in which these issues could have been addressed but this seems to be the one which is working the best – just let the private sector figure it out. When government intervenes, you get cases like Solyndra and small business killing laws like Dodd-Frank. There is no reason why ride-sharing apps aren't going to take over in the long run.
One last benefit of ride-sharing is that it gets rid of all risk involved with drunk driving; you also may even get a driver that speaks proper English and cares about your safety. The ease with which a cab can now be booked ensures most people don't drive after drinking anymore. Let's hope this trend continues.

 

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