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Ride-sharing’s impact on car sales has been dramatically overstated

The idea of cars as a service — instead of something bought, owned and aspired to — seemed like a foregone conclusion to Silicon Valley.

A smartphone showing the Uber app on its screen being tapped by a finger


Zhang Peng / Getty

A version of this essay was originally published at Tech.pinions, a website dedicated to informed opinions, insight and perspective on the tech industry.


Amid this year’s many car-tech-related developments, few are receiving more attention than ride-sharing services such as Uber and Lyft. To their credit, these companies have managed to build up enormous valuations and continue to receive major investments from traditional auto industry players.

The primary reason for all the excitement isn’t their current business model — providing convenient means to transport people from place to place — but the bigger vision they have of turning cars into a service. The idea is that instead of buying and owning cars, people will turn to this type of automotive service for all their transportation needs, thereby dramatically reshaping the automotive industry and our transportation infrastructure.

In many ways, the concept is certainly an intriguing and vaguely appealing one. In fact, many in the tech and urban-focused Silicon Valley area seem to accept it as a foregone conclusion. According to a recent Technalysis Research survey of 1,000 U.S. consumers about automotive-related technologies, including autonomous driving and ride-sharing, however, the reality is different — dramatically so.

To participate in the survey, consumers had to both own a car and expect to purchase one over the next two years. While this precludes representation from people who may have already given up on owning a car (likely a tiny percentage anyway), their impact has already been factored into current car sales. The purpose of this portion of the study was to better understand any potential future impact of ride-sharing on car purchases.

The first key point that the study uncovered is that a huge percentage of the U.S. population still has little to no experience with any ride-sharing service. In fact, about 57 percent have never used a ride-sharing service, and another 23 percent have only used one once or twice. This puts ride-share users in the minority. In fact, only about 20 percent are regular or semi-regular users of ride-sharing. The top-level results are shown in Figure 1. (Note that the numbers don’t add up to 100 percent due to rounding.)

Not surprisingly, the numbers vary by home location, with 31 percent of city dwellers, 17 percent of suburbanites and 9 percent of rural dwellers saying they use ride-sharing at least once or twice a month. (FYI, city residents make up roughly one-third of respondents, suburban residents approximately one-half, and rural residents about one-fifth — a very similar mix to overall U.S. census data.) The numbers also vary by age, with 32 percent of those under 35 using it at least once or twice a month.

More importantly, even among those who use ride-sharing services, the reasons or situations in which they do use them strongly suggest occasional, supplemental usage to their regular driving. In fact, nearly 75 percent of ride-sharing users view it as a supplemental service for situations such as after drinking, while traveling, or other circumstances where they don’t have access to a car. That leaves just 5 percent of the total population (or one-quarter of all ride-share users) who actually use ride-sharing more than just occasionally.

As Figure 2 illustrates, just 4 percent of all ride-sharing users (6 percent of city-dwelling users) see their cars as either potentially or definitely being replaced by ride-sharing users — less than 1 percent of the total survey respondent base.

Survey respondents were also asked to rate the amount of influence that ride-sharing services would have on their next car purchase (from 0 percent influence or no impact, to 100 percent influence, or will definitely not buy a car because of them). The results showed that just 8 percent of the overall total said it would have a strong or greater impact (defined as at least a 50 percent impact), with 14 percent of city dwellers, 4 percent of suburbanites and 10 percent of rural dwellers selecting those same options. One interesting point to note is that not a single suburbanite said they would definitely not purchase a car because of ride-sharing services.

One last point the survey explored was the potential impact that autonomous vehicles would have on ride-sharing services. The largest group of respondents, 40 percent, said if ride-sharing services started using autonomous vehicles, it would not impact their usage of the services. (FYI, only those who had used ride-sharing services were asked the question). However, a combined 43 percent said they would either use ride-sharing a little less, a lot less, or completely stop using them if autonomous vehicles were put into service. Interestingly, the results were relatively consistent across the different location-based groups, but city dwellers actually had the highest percentage of respondents (15 percent) who said they would stop using the services completely if autonomous cars were deployed.

There’s no question that ride-sharing services have had an impact on the way that people think about cars, car ownership and transportation in general. But as the survey results dramatically illustrate, their influence on how, why, or if people actually purchase new cars is likely to be extremely small for some time to come. It’s certainly possible that we’ll see some dramatic changes in opinion over the course of the next several years, but for now, the obsession over “cars as a service” is definitely misplaced.


Bob O’Donnell is the founder and chief analyst of Technalysis Research LLC, a technology consulting and market research firm that provides strategic consulting and market research services to the technology industry and professional financial community. Reach him @bobodtech.

This article originally appeared on Recode.net.

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