Electric car maker Tesla Inc. has delivered on its CEO’s promise to build a lower-priced car at a rate of 5,000 per week by the end of June. CEO Elon Musk sent an e-mail to company employees Sunday praising them for producing 5,000 Model 3s, a compact car that’s designed to shift Tesla from a niche manufacturer to a mainstream automaker. “We did it!” Musk wrote. “What an incredible job by an amazing team.” Last summer, when the first Model 3s began rolling off the assembly line, Musk promised to build 5,000 per week by December and 10,000 per week in 2018. But he also warned at the time that Tesla was entering at least six months of “manufacturing hell” as it tried to hit the targets. Every day there’s more news about the inevitable arrival of autonomous vehicles. At the same time, more people are using ride-hailing and ride-sharing apps, and the percentage of teens getting their driver’s license continues to decline. Given these technologies and social changes, it’s worth asking: Should Americans stop owning cars?
Dave Sullivan, manager of product analysis at the market research firm AutoPacific Inc., wasn’t impressed. “Reaching it is one thing,” Sullivan said. “Consistently producing 5,000 per week with outstanding quality is another. I don’t think producing 5,000 once is anything to get excited about until it’s repeatable.” And this viewpoint is very important as we see the changing world of transportation as it pertains to personal car ownership. With the continuing use of ride-sharing apps such as Uber or Lyft, we see more and more consumers opting out of the idea that a personal vehicle is absolutely necessary to live. A recent study by the ride-hailing service Lyft and a similar study by a group of American universities pointed to the positive impact ride-sharing services not only have on consumers, but on the surrounding communities they service. These studies found that ride-hailing services aid in reducing congestion, increase individual consumer mobility, and found that in 2017 alone, Lyft passengers spent over $2 billion more in communities where ride-sharing services exist. But, the studies and more also point to the negative impact ride sharing services has on individual car in the same areas. Lyft’s study found that the availability of ride sharing services do impact car ownership, both due to commuters’ decision to replace existing cars and their decision to sell their cars altogether.
Lyft found that in 2017 alone, almost 250,000 of their ride sharing passengers using Lyft have sold their personal car or abandoned replacing their current car due to the availability of ridesharing services. Additionally, over 50 percent of Lyft users report driving their own car less because of ride-sharing availability, and 25 percent of users state personal vehicle ownership is not important anymore. Lyft’s president John Zimmer agrees. He predicts personal car ownership in major cities will be extinct by 2025 — as long as autonomous vehicles emerge as a dominant force as most tech companies expect. Leading experts such as Peter Diamante have announced similar predictions to these based on the findings listed above. Diamante makes the bold yet insightful claim that soon parking garages will become obsolete as most consumers will not have a personal car. Soon you will be able to commute via Uber helicopter. How long before you decide it is easier to ignore personal car ownership and embrace ride-sharing as your main form of transportation.
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