Advertising Age magazine reports (May 31, 2010) statistics from the U.S. Department of Transportation that show an overall decrease in driving by Americans under the age of 30. For example, in 1978 no less than 92 percent of 19-year-olds had a driver’s license; by 2008, that number slipped to 77 percent.
The magazine also reports the share of miles driven by younger people has fallen over the past 15 years. In 1995, the percent of automobile miles driven by people aged 21 to 30 was 20.8 percent. But by 2009, that share fell to 13.7 percent even while the demographic segment grew disproportionately (data is from the Federal Highway Administration’s National Household Travel Survey, released in 2010).
“The automobile, once a rite of passage for American youth, is becoming less relevant to a growing number of people under age 30,” opines Jack Neff, who wrote the Ad Age story. “That could have broad implications for marketers in industries far beyond insurance, gasoline and retail.”
Exactly why this is happening is subject to debate. And that analysis is important, because it can help identify if this is a full-out cultural shift or just an anomaly of current economics or demographics.
The causes might be any, several, all or none of the following:
It’s the Internet: “Almost everything about digital media and technology makes cars less desirable and public transportation a lot more relevant,” says William Draves, co-author of “Nine Shift,” a trend tracking book that says the two decades of 2000-2020 will involve significant changes in living and working due to technology. He notes that texting and watching mobile TV can be done while riding public transportation, and that telecommuting to jobs have replaced the need for going anywhere.
It’s the economy: The comments string under the Ad Age article strongly attributes the trend to the recession. “It’s economics, stupid,” said mikeginsburg of Clovis, California. “Ten percent of the population is unemployed. Another 20 percent is underemployed. There is less money to purchase cars. Families are less likely to allow, let alone encourage, young members to get licenses to keep auto insurance costs down … you are too eager to give credit to the ‘digital age.’” Commenter bronze4073 adds, “To buy even a $15,000 car means a $300 car payment. Add insurance, gas, tolls, parking and it’s not unrealistic for your average 23-year-old college grad to be facing $500 a month to stay rolling.”
It’s the culture: Research by J.D. Power & Associates finds that Gen-Y talks less about cars on social media than do Baby Boomers. Sheryl Connelly, who manages “global trends and futuring” for Ford Motor Company, says “I don’t think the car symbolizes freedom to Gen Y to the extent it did baby boomers…part of it is that there are a lot more toys out there competing for the hard-earned dollars of older teens and young adults.”
Paul Taylor, chief economist with the National Automotive Dealers Association, agrees with the economic argument. Compounding this, he says, are stringent restrictions on young people driving by states, colleges and high schools.
Taylor told the magazine that this demographic segment will end up driving eventually. “That age cohort may eventually get married and have children. Living near work is something you do when you’re young and single, and when you start picking out schools and amenities you want for your children’s development, people are less willing to live near the office.”
Keep in mind, the Gen-Y age segment is large, including a significant immigrant portion produced by a higher-than-average birthrate culture.
So while their non-driving habits may be alleviating stress on crumbling road infrastructure now, look out. There could be a big leap in driving as this cohort ages into the minivan phase of their lives.