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Is Gen Y abandoning the car, or simply can't afford to drive?

A decline in driving for those between 16-34 years old (Gen Y), as well as an across-the-board decline in car ownership and driving, may show a long range market trend away from car ownership and towards livable walkable cities, or may simply be due to the recession and tight budgets.

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It's been noticed by marketers that "Gen Y," the 80 million Americans currently between 16-34 years of age, are driving a lot less than their predecessors. This trend has been going on for some time, but recently garnered big attention due to a Reuters article which looked at the federal government's National Household Travel Survey, which showed a rapid decline in the annual vehicle-miles-traveled for people aged 16-34. Does this foretell the ending of a major part of the American lifestyle, car ownership and car dependency? Or is it simply a temporary condition due to the current financial woes in the U.S.?

The key factoids, reported by Reuters, are that between 2001 and 2009, the last year for which the Travel Survey data is available, vehicle-miles traveled by people aged 16-34 dropped 23 percent from 10,300 to 7,900. Between that factoid, and the rise of bicycling and public transit use, as well as increased cell phone and social media use, led to a conclusion the consumer trend for Gen Y is the abandonment of cars.

The same cluster of people, Gen Y, ages 16-34, are adopting social media networking services and smart phone usage like wildfire. The theory would be that by connecting with friends, via an online social network, without bothering to drive to meet them, that ones social life can occur without the baggage of driving a car around. Bob Lutz, former head of General Motors, and no doubt keenly interested in the fate of the auto industry, wrote on Forbes claiming it's long been his contention that "electronic interactivity" and "ever more convincing, more satisfying, levels of virtual reality" would diminish the "human need for actual travel" and render us even more sedentary than we are today, and instead chatting away on the Internet.

The automakers seem to be responding by integrating internet connectivity services into the automobile driving experience. The advertising campaign for the Toyota Prius C is a blatant attempt to reach out to Gen Y and sell them on automobile ownership. A Deloitte survey from last winter suggested that Gen Y would lead the way to hybrid cars, and more digital connectivity features in cars. Both Ford and Daimler had major presences at CES last winter, despite that event happening the same week as the North American International Auto Show in Detroit, showcasing the fact that some automakers are looking to increase the presence of modern digital electronics in cars.

Another trend is the Urban Repair movements which aim to develop livable walkable cities. It is the same Gen Y who are flocking to urban areas in pursuit of lively city life, seeking walkable cities and good quality mass transit. The car dominated suburbs while designed to make car driving easy, had the unfortunate side effect of being hostile to pedestrians, and poor quality mass transit service.

But is this the best interpretation of the Travel Survey data? Another trend is the economic downturn, and one must recall that 2009 was characterized mostly by the depths of the recent recession. A lot of people were out of work that year, and a careful read of the Travel Survey data shows that there was an across the board decrease in automobile use.

Annual vehicle miles traveled per household declined from 21,187 in 2001 to 19,850 in 2009, with accompanying declines in the areas of travel to/from work, shopping, family, and other social activities. Over the same period use of mass transit and walking increased, with the greatest increases occurring in urban areas. The average number of daily trips per person declined, for all age groups, between 2001 and 2009. The number of households owning zero vehicles increased from 8.1% in 2001 to 8.7% in 2009, and the numbers owning two or more vehicles decreased considerably over the same time frame. The largest increases in not owning a vehicle occurred in metropolitan areas. While there is a decline of vehicle miles traveled for people aged 16-34, the decline is more profound for those who live in urban areas, and almost nonexistent for those who live in rural areas. Finally, while the annual expenditures for gasoline by both rural and urban households have risen dramatically (obviously due to the higher cost of gasoline), the increase was much less for those living in urban areas.

The year 2009 was a deep recession year, and because a lot fewer people were driving to work that obviously affected these statistics. With less personal income, would it not make sense to skip the expense of owning a car? Urban areas with good quality mass transit systems make it more possible to live a car-free lifestyle, as does the rise of car sharing services like ZipCar and car2go. Smart phone apps with mass transit schedules make it easier to navigate bus and train services than it was in the day of paper schedules.

One wonders what will happen if the general economic conditions improve. Our cities are designed to be hostile to pedestrians, in the name of making it easier to drive. Will Gen Y'ers with more money in their pockets choose to buy cars?

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Aaron Turpen    July 8, 2012 - 10:45PM

It's also telling that Gen Y (ages 18-25) in adults has the highest rate of unemployment and has through most of the recession. I think that has a lot more to do with any of this than anything else.

More than half of the jobs lost during 2009 were to those under 30 and many are currently underemployed or still unemployed.