OEMs have been concerned for some time that the rapid rise of mobility services such as Uber and Lyft will lead to a fall in the number of vehicles purchased by consumers. However, a new report has found that, for current vehicle owners, this assumption may simply not be true.
Strategy Analytics’ new report ‘Impact of Ride Sharing Frequency on Vehicle Purchase Intention’ discovered that, for current vehicle owners, increasing ridesharing usage actually raises the likelihood they will purchase another vehicle within the next five years. This is in part because current frequent rideshare users, who also own their own vehicle, have greater transportation needs than those that do not.
The ridesharing service therefore fills a niche of convenience, but does not supplant the user’s need for their own personal vehicle. This may be due to mindset – for example, with a user used to the comfort of cars preferring to use a service like Uber rather than public transport in situations when using their own car is not possible (such as due to a lack of parking or when intoxicated).
However, the report does follow consensus evidence that desire for car ownership is weakening at the lower, younger end of the market, with millennials with no children that use ridesharing at least once a week being much less likely to purchase another vehicle within the next five years, compared to all respondents that had children.
Report author and director of syndicated research at Strategy Analytics’ UXIP (User Experience Innovation Practice) Chris Schreiner said:
‘The question of how emerging transportation options like ridesharing and car-sharing will impact vehicle sales is a very complex one to answer. Issues of cost, convenience, usability, privacy, type of journey, and length of journey all impact transportation choices.
‘Frequent ridesharing users do not seem likely to delay their next vehicle purchase, but it is still possible that they might choose a less expensive or lower class vehicle.’
This could lower the residual values of more premium vehicles, and raise demand in the volume segment. This is because private consumers tend to buy used cars (with fleets buying new).
Read more: Autovista Group