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Why Are Fewer Americans Driving Cars?

Professor of Financial Economics and Part-time Value Investor, Transfin.
Jan 7, 2020 9:27 AM 2 min read
Editorial

The trend of decreasing automobile usage can be seen in many developed countries, including the US and the UK. It's a trend most prominent among younger generations - i.e., those below 30. 

 

Why Are Fewer Americans Driving Cars?

 

Why are fewer Americans driving cars?

Driving Downhill: Historically, Americans' driving habits ran in sync with their nation's economy. When there was a recession, people hit the road less; when times were good, they drove more.

 

Hit the Brakes: But in recent years, this trend has broken. Despite a healthy economy, the average number of miles driven per person has hovered around 9,800 miles a year, c. 2% fewer than the 2004 peak. In some states - including California and New York - the frequency of driving is actually climbing down.

 

This trend of decelerating automobile usage can be seen in many developed countries, including the UK. It's a trend most prominent among younger generations - i.e., those below 30.

 

But, Why?: What are the reasons behind this? A decline in migration to urban areas, preference of young adults to live close to their work places, the rise of online and work-from-home jobs, a major shift towards ride hailing, and a growing population of retirees who commute less. Increasing concern about the environmental effects of vehicular pollution is also a major factor.

FIN.

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