4 Ways Young Americans Are Saying No to Car Ownership

The headlines have been optimistic: Car sales are back and the Big Three are in the black while going green. But a lingering recession and shifting priorities among younger adults reveal that the shine is fading on America's car culture.

New car sales to those under 35 years of age have dropped by 30% between 2007 and 2012 according to the automotive consumer guide Edmunds.com. This trend may be about more than just economics: many in this demographic group are in no hurry to get drivers licenses, according to University of Michigan researchers.

Thirty years ago, 87% of 19-year-olds were licensed to drive; today it's under 70%. The number-one reason non-drivers are giving for not getting licenses isn't the ownership costs—it's because they're too busy (37%). Obviously, there is a major shift in priorities going on here. The same survey also indicated that 22% of those without licenses would rather bike or walk than own a car; 17% said they preferred public transportation; and 9% said they were concerned about how cars impact the environment. Of unlicensed young adults, 22% said they plan on never getting a driver's license. Meanwhile, the number of miles driven by Americans continues to drop. This trend is led by drivers 16 to 34, who drove 23% fewer miles in 2009 than they did in 2001, according to the US PIRG Education Fund.

Overall, it's safe to conclude that car ownership is much less of a priority than in years past, soft economy or not. And while the automotive industry is banking that millennials will resume the love affair with cars once the economy starts hitting on all cylinders, America's transportation landscape has changed dramatically since the recession began in 2008. Car ownership no longer the most convenient or attractive transportation option for these young adults.

Here's four ways young adults in America are getting around without owning a car.

1. Bikes. The bicycle is the millennials' equivalent of the hippies' Volkswagen Beetle. They've become part of the lifestyle, and a symbol of independence and counter-culture.

Over the past decade, a bicycling boom has taken hold, and many roads in major urban centers have dedicated bicycling lanes. Dozens of U.S. cities and colleges have implemented bike-sharing systems, allowing riders to quickly get from Point A to Point B without the hassles of bike ownership.

Not only are young adults bicycling for recreation, they're leading a dramatic increase in bicycle commuting. The U.S. Census reports that commuting by bike grew by 9% last year, bringing it to a historic high. Nearly 900,000 people, or about 0.6% of the commuting public rides a bike as the primary method of getting to work. Since 2000, bike commuting has grown 61%.

2. Public transportation. Every mode of public transportation is booming in the U.S. Last year, ridership hit its highest level since 1956 — the year President Dwight Eisenhower signed the law that created the Interstate Highway System.

Americans took 10.6 billion trips by public transportation in 2013, a 1 percent increase over 2012 (also a year marked by significant ridership growth). Subways and heavy rail systems saw a 2.8 percent increase in ridership, while light and commuter rail both saw increases near 1 percent.

American Public Transportation Association CEO Michael Melaniphy says this is not a statistical blip, attitudes regarding travel are changing. “There is a sea change going on in the way that people look at transportation,” Melaniphy says. “Americans want travel choices; they want to be able to choose the best travel option for their lives.”

Industry observers say that the economic downturn spurred public transportation ridership, but many people are finding it a preferable way to travel and commute and are not returning to cars as the economy improves.

3. Regional bus lines. Long-distance bus travel is also back from the brink. Curbside-pickup bus lines, such as Megabus and BoltBus, are thriving in major cities on both coasts and in some Midwest travel corridors. Young riders, who aren't old enough to remember the stigma associated with cross-country bus travel, are flocking to the services. These new lines travel between cities that are typically three to seven hours apart by car, and not convenient or inexpensive enough for airline or train travel.

Young riders are the core constituency for these inexpensive lines, which offer amenities such as comfortable coach seating, WiFi and plug-in capabilities for electronic devices. In keeping with the convenience and high-tech makeup of these companies, customers can buy their tickets online with a few quick clicks. Even the personalities of the bus drivers are part of the charm of these lines, as they try to create a good rapport with their customers.

On top of that, high fuel costs are making these bus lines even more attractive. While a motorist might spend between $30 to $55 in gasoline and tolls to drive one-way between Boston and New York City, a ticket to ride that route ranges from $25-$40, depending on the line and time.

However, there are concerns that some of these lines might scrimp on safety after a string of accidents involving smaller bus lines and the crash of a double-decker Megabus outside Chicago in August 2012 that killed a passenger and injured dozens others. In the wake of the accident, Megabus is requiring additional safety training for its drivers.

4. Car sharing. Services such as ZipCar, HourCar, Car2Go, and Hertz 24/7 became popular in large cities, at airports and at college campuses in the last seven years. These services are now moving rapidly into smaller metropolitan areas as well. Car sharing is a model of car rental where people rent cars for short periods of time, often by the hour. It's been popular for decades in Europe, and is only starting to catch on in the U.S. Young adults, especially urban apartment dwellers, find the services attractive since they only pay for the occasional use of a vehicle and don't have to worry about overnight parking, maintenance and car-loan payments.

An estimated 1 million people are members of car-sharing services in the U.S. Analysts attribute their success to the shifting generational mindsets about car ownership and the increasing ownership costs. Car sharing also contributes to sustainable transportation because it reduces car ownership at an estimated rate of one rental car replacing 15 owned vehicles, according to the Economist.

Zipcar, the largest of these services, says it has the millennials to thank for its success. “There is a fundamental shift going on with regard to car ownership for this generation,” says ZipCar president Kaye Ceille. “More than half of these kids find ownership too costly — this includes the cost of the car, fuel, insurance and parking.”

Most car-sharing services require members to be at least 21 years old. The services also run a driving-record check before they approve a membership. There are various monthly rate plans offered, varying greatly between services, so it pays to shop around. In addition to the monthly fee, members of car-sharing services pay by the mile and hours used.

Cars are reserved online and parked at designated parking areas and are unlocked with a corresponding membership card containing an RFID chip. Cars are returned to the same parking spot. Gas and insurance costs are covered through your membership and usage fees.

Possibly on the horizon for car-sharing is one-way rentals, allowing for regional travel between cities. Without the burden of having to return a car to its original location, this might make car-sharing much more attractive for extended periods and distance trips, perhaps even for travel to urban areas, where parking is often an issue. Some transportation analysts say one-way rentals will be a big step forward for car-sharing, making it even more convenient than car ownership for many living in urban areas.

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