In my recent post-hiatus brain dump I had a lot to say about challenging assumptions. One of the assumptions that I said needed to be evaluated was the article of faith in the auto industry that if they can survive to 2011 or 2012 the uptick in standards of living in the auto industry will pull them back to prosperity. That’s not a given, and an interesting project for a new model for urban and suburban automobiles is being evaluated at MIT and recently featured in Forbes.
Sharing cars would cut the world’s outlays for vehicles, as well as for parking lots. Racks everywhere would solve the “last mile” problem of having to hoof it to and from public transit stops. More people using buses and trains would take cars off the road. Zipcar, a shared rental service in 13 cities, says each of its vehicles replaces 15 others.
The basic concept is that small, light “stackable” electronic cars would be distributed throughout cities (and probably dense inner suburbs) at stands. These cars would serve a similar purpose to ZipCars today for short-term, short-range car rentals. These cars would serve as the “last mile” extending the convenience of mass-transit.
Environmental concerns are obviously a strong driver for this as a preferred alternative to outright car ownership. I also expect that the current global recession is actually going to delay the march towards the global middle class of China and India, the very trend upon which prosperity in the automotive industry is dependent.
A trend I am seeing more often among my friends in their 20s and 30s is the recognition of what a pain and expense car ownership is. Many of my friends living in the city and closer-in suburbs who don’t have long commutes are deciding that public transportation, ZipCars and Hertz are good enough to deliver cost-effective transportation options. When you consider the cost of car payments, maintenance, parking and insurance this trend is rationality taking hold for those who only need a car for occasional, short-term use.
Much of this is contingent upon density and the availability of public transportation. Going car-less really is not an option for exurban dwellers such as myself or those living in more sprawl-prone cities like Los Angeles or Phoenix. For those in dense cities like Washington, DC (and Arlington, VA or Silver Spring, MD), New York City or Chicago this is a valid option for a large proportion of the global middle class. Take that model global and you can see how residents of London, Shanghai or Mumbai might find this a cost-effective alternative model to car ownership with most of the benefits and none of the pain.
So how could I be wrong about this? Henry Ford held to the Model T because he didn’t realize the potential of the car as a vehicle (pun intended) for personal expression and identity. High end automobiles might continue to be that tangible evidence that “I have arrived.” Among the upper middle class around the world the premium auto will continue to fill that role and the wealthy will drive their Bentley’s and their Rolls. So it could be among the middle class that ownership of their Toyota Camry or Tata Nano will also be used as a signal that “I’ve arrived… sorta.”
