The global ridesharing king Uber is racking up some pretty impressive numbers. A recent blog post revealed Uber had reached the 1 million rides per day mark. So what does this mean for the new and used car market?
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Auto Market Trends To Watch
In a recent CNBC interview, Benchmark Capital general partner Bill Gurley brought to light some fascinating data. For instance, the number of licensed drivers under the age of 18 has dropped from 43 percent to 28 percent over the past ten years. During this same timeframe, car ownership for 18 to 30 year olds has dropped by 30 percent.
The impact of Uber cannot be denied as the company’s value currently stands at $18.2 billion, making it more valuable than Hertz. So does this mean that Uber CEO Travis Kalanic’s prophecy will come true, that is, car ownership becoming a thing of the past?
Not So Fast
Even despite the heady numbers, the automaker stocks don’t seem to be worried. Perhaps they don’t believe the hype, or maybe the impact has already been priced in.
The most reasonable explanation is that people will just keep buying cars. Every major city already has taxis, buses, trains, and subways. But even the most advanced urban centers also have a lot of cars circulating.
People typically don’t own automobiles because it’s the cheapest option. Car owners, in general, like to be exactly that – owners. Sure, many will continue to take advantage of ridesharing advantages such as not having to park, but car ownership is not going away anytime soon.
Used Car Inspection Services And Market
Just like the new car market, the used car market will pay close attention to the ridesharing trend. If new car sales take a hit, then the used car market may follow. For buyers, it’s wise to get as much information about a used car as possible before making a purchase or an offer. With one million Uber riders per day, many vehicles are seeing heavier use than usual.
A used car inspection service can help detect abnormal levels of wear and tear. So this type of service may become more popular as former Uber cars make their way to the used car market.
New Markets, New World
Both the new and used car markets are certain to keep evolving, and in some cases may give birth to new industries. For example, Breeze is a startup that rents cars to Uber drivers who are not car owners.
In the end, cars will always have owners, sellers, buyers, and – in most cases – drivers (read about self-driving cars here). If we pay close attention to these trends, we can avoid risks and capitalize on new opportunities.
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Published in CARCHEX Vehicle Inspection Resources by CARCHEX on May 22, 2015