Generation Yers showing less demand for cars

Digital revolution?

Vilas Bhuchar, Jun 07, 10.

William Draves, president of consulting firm Lern, proposes that digital media and technology are making public transportation more relevant and useful than cars to Americans under the age of 30, helping to explain the generation’s slowing interest and demand for automobiles, according to an article in Advertising Age.

The story notes statistics showing that various age groups under the age of 30 are showing less interest or need for driving. Draves believes part of the reason is that public transportation is more conducive to the usage of digital media and technology:

Texting while driving is dangerous and increasingly illegal, as is watching mobile TV or working on your laptop. All, at least under favorable wireless circumstances, work fine on the train. The internet and mobile devices also have made telecommuting increasingly common, displacing both cars and public transit.

Furthermore, a changing job market and ability to save time by being able to work while taking public transportation appeals to Generation Yers, according to Mr. Draves:

This demographic will be working on “intangibles” in professional jobs, not on tangible things that require physical presence, Mr. Draves said. “Time becomes really valuable to them,” he said. “You can work on a train. You can’t work in a car. And the difference is two to three hours a day, or about 25% of one’s productive time.”

While the faltering economy may have impacted younger people’s ability to purchase and afford automobiles, Draves believes the shift “began well before the recession,” and predicts a “resurgence in urban living in denser housing surrounding train stations.” This could have a significantly negative impact on big-box stores like Walmart, which relies on customers driving away with big-purchase items, adds the story:

Walmart has yet to find a highly profitable small-store concept that fits densely packed urban areas; it’s disproportionately strong in rural and suburban areas and has had trouble penetrating big cities with mass transit.

When gas prices dropped sharply in late 2007, Walmart started posting its best same-store sales results in years. The rebound in gas prices was just as tough on Walmart as the drop was favorable. The retailer’s year-over-year customer traffic turned negative last year just as gas prices shot past their 2008 levels, U.S. Chief Operating Officer Bill Simon said in a March speech to analysts.

Draves sees both main streets and e-commerce benefiting from the changing demographics and predicts that U.S. miles driven will be cut in half by 2020.

(Photo credit: Miles Skorpen)