As a twenty-something living in Brooklyn I, like most of my fellow Brooklynites, don’t own a car. Easy access to public transportation and a pedestrian-friendly city make owning a car a luxury, not a necessity. I am a millennial (those between the ages of 18-34) and my generation is forging a new relationship with the auto industry.
Nielsen reports that millennials are currently living in urban areas more so than preceding generations. Due to numerous factors (maintenance costs, gas prices and environmental reasons), millennials living in urban areas are less likely to own cars—giving way to a decline in vehicle ownership. From 2007 to 2011, the number of cars purchased by people aged 18 to 34, fell almost 30 percent , according to the AAA Foundation for Traffic Safety. The reason? Millennials are re-prioritizing what’s important to them—and income and technology are outweighing home and car ownership.
Millennials are not only redefining life priorities, they are also redefining the whole notion of ownership and demanding (or pioneering) new kinds of customer experiences—forcing brands to become more innovative. In response to this shift, Interbrand’s Best Global Brands 2014 report introduced the idea of the Mecosystem: an interconnected environment where integrated experiences are reorganized around individual consumers like you and me. We now live in a world that expects responsiveness and more tailored products and services from brands, and that trend is only going to accelerate. So, if millennials are not looking to own vehicles, then the auto industry must reassess its offerings to better suit its customers’ evolving wants and needs.
Enter car2go; brainchild and subsidiary of Daimler AG , and car sharing service extraordinaire. The company exclusively uses Smart fortwo vehicles, which are available in 29 cities across Europe and North America. And its newest location happens to be Brooklyn. Unlike other car sharing companies, car2go offers the benefit of no subscription fees or required reservations. The driver is billed by the minute, which makes the business model ideal for on-the-go planning and one-way trips. Cars can be reserved via an app, online, or by simply walking up to a car and unlocking it with a membership card. In addition to being environmentally friendly, drivers can rack up free minutes for re-fueling or re-charging the cars.
As car sharing services gain popularity, a larger picture of millennials and their behavior as consumers is emerging. Are car sharing services the future of the auto industry? The answer is both yes and no. While it seems disrupters like Uber, Lyft, Zipcar, and Hertz 24/7 are the preferred brands of the urban dweller, it will take new tech features, such as Wi-Fi and in-car connectivity, to ultimately attract the millennial customer. Millennials tend to gravitate towards brands that demonstrate corporate citizenship—and car sharing is a responsible answer to the growing demand for more sustainable products and services. Underscoring the appeal of brands that embrace the sharing economy, a recent Bloomberg enterprise valuation statistic revealed how many years it took for certain brands to reach the $10 billion mark: 16 years for Starbucks, but only six years for Uber and only five years for Airbnb, proving there is great value in shared assets—especially ones that are tech-driven.
Millennials are responding to brands that are making their lives easier and fit seamlessly into their tech-centric world. Connectivity is key. Automakers must reevaluate their relevancy and be able to update their products at a faster pace. By looking at their consumers in segments, they can create better products to fit the evolving lifestyles and needs of their consumers.