By Marcus Gamo, Senior Vice President and Global Automotive Specialty Lead, Allison+Partners
A short time ago, the auto industry viewed millennials as the lost generation. Automakers expected car sales to plummet and prepared for change. But that didn’t happen. Instead, millennials delayed their adoption of cars until they started getting married, having children and discovering the suburbs.
Simultaneously, the growth of the smart mobility movement with the introduction of rideshare, car share, e-bikes, high-speed rail, scooters and automaker-backed subscription models have transformed how we define transportation. This dramatic change has birthed a mobility culture. The “me” foundation of car culture – where a car takes “me,” how it makes “me” feel about myself and how it represents my values – has been replaced by a “we” perspective.
Allison+Partners’ latest U.S. study called “The Birth of Mobility Culture,” found Generation Z (those under the age of 24) will drive this new culture forward in part due to an inherent comfort with connected technology. Gen Z has grown up hand-in-hand with new technology: it is not scary or intimidating to them and they welcome rapid change as the norm.
The tipping point for mobility innovation won’t be determined by how quickly the technology arrives. The true tipping point will be when Gen Z arrives at a life stage when their consumer spending behaviors (and ability to spend) match values synonymous with mobility culture.
The Allison+Partners study revealed Gen Z consumers view cars more like appliances and nearly 56% agree a car represents essentially no more than a means of transportation. Some 70% of Gen Z consumers do not have their driver’s licenses and 30% of this group has no intention or desire to get one. In fact, Gen Z survey respondents actually ranked alternate reality, VR and smart homes higher in interest than autonomous vehicles.
However, those who make up Gen Z do see autonomous vehicles as an eventual reality. Some 60% of those we surveyed believe they will use autonomous vehicles by 2029.
The implications of these insights are far reaching. We need to immediately rethink how we excite Gen Z consumers about transportation options. Automakers should complement or replace attributes of car coolness, such as horsepower, tow capacity and even fuel economy, with new features such as productivity, shared time, or total experience.
Gen Z has shown an early willingness to invest money and loyalty in brands that demonstrate an ability to align marketing with these new values synonymous with mobility culture. The latest example is in Madrid, with more than 5,000 electric scooters – the largest fleet globally – available for on-demand use as a means to cut down on traffic, noise, emissions pollution, and parking issues. Younger Spaniards flock to these options, with companies increasing the size of the fleet more than fivefold in the past year.
Inverse to this lack of interest in driving comes the acceptance of autonomous technologies. With its high trust level of technology, Gen Z will fuel the adoption of autonomous vehicles.
The combination of autonomous transportation with “we” values core to mobility culture suggests a reimagined way to use time while on the road. In fact, data from Allison+Partners’ The Birth of Mobility Culture report shows nearly half of Gen Z consumers (45.5%) are comfortable with shared ride experiences in an autonomous vehicle.
This new mobility culture also calls into question the commute and opens new options for city planning and commute patterns. Our study found almost two-thirds of Gen Z consumers would be willing to accept a longer commute in a self-driving vehicle. While the single driver commuter experience is generally perceived as bad, unhealthy, and stressful, the “we” commute of mobility culture could be a positive and healthy experience similar to today’s train commutes.
This is where it gets really exciting. The combination of being open to longer commutes and shared experiences allows us to reimagine the urban-to-suburban relationship, broaden access to affordable housing, offer solutions for a work-life balance, and improve relationships with each other.
Case in point: researchers at the UK’s University of East Anglia found British workers who commute to work by bus, train or bicycle were happier compared with those who drive their personal car each day. So, if those who make up Gen Z view cars as little more than appliances, treating a self-driving vehicle experience as a form of alternative transportation might have the same effect.
A new forecast released in June 2019 from the International Data Corporation (IDC) indicated that global spending on smart cities initiatives will reach roughly $190 billion over the next four years.
Three of the top five areas that will experience the most spending by 2023 will include smart grid (given the rise of electric vehicles), advanced public transportation systems, and intelligent traffic management.
The output of these investments made by forward-thinking city planners – cleaner forms of personal vehicle transportation, improved transportation usage and reduced traffic congestion – directly addresses “we” values expressed by emerging mobility consumers.
It may also be easy to forget that less than a decade ago, ridesharing did not even exist. In 2019, Lyft went public with more than $25 billion in market cap, as has Uber with a market cap of just under $80 billion. All despite historically disappointing earnings reports.
Our study found one-third of American consumers report regular use of rideshare services (31%) as an alternative to using their own vehicle – an astounding market penetration for such a relatively young service within the marketplace. And Gen Z is only a relatively small portion of the rideshare market. As they age and enter new life stages, the potential for rideshare service growth is massive. The same is true for all new mobility technologies, which are expected to change massively as autonomous options begin to come to market.
If the dramatic and rapid growth of ridesharing is an indicator, mobility culture will accelerate the transition of how cities and denser suburban areas get designed, particularly space allocated for traditional vehicle parking.
Commercial real estate and larger residential housing are expected to convert existing parking spaces to pick up and drop off areas, solar facilities (to enhance vehicle charging options), or even micro green spaces for local communities which could decrease urban heat-island effects in densely populated areas. Similarly, new construction developments will take these smaller footprint opportunities into consideration.
While streets will continue to play a critical role advancing most mobility options, there will be opportunities to narrow them. A decrease in personal transportation won’t require the wide boulevards seen in many cities today, and those that exist can be converted to accommodate cars, micro-mobility solutions, charging infrastructure, pedestrians, and safer dedicated bikeways.
Developers and city planners will see opportunities to convert larger parking structures into infrastructure that can positively impact urban areas. This will include housing options (condos) to address reported shortages or even indoor growing facilities – with the growth of vertical, indoor growing methods – to bring fresh, affordable produce and healthy food options to communities.
The birth of mobility culture and the rise of “we” values suggest future journeys will not be quiet and alone, but ambient rides that are shared with others.
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