Weekly Brief: Coronavirus Could Turn Uber Users into Car Owners

The COVID-19 crisis could attract new car owners and be a boon for the automotive industry.

That’s according to a new global survey published by Capgemini Research Institute last week that found, while the pandemic has delivered a damaging blow to the industry, an investigation of current customer attitudes suggests that carmakers could find a silver lining as consumer activity resumes.

The survey included consumers from across North America, Europe, and Asia. Participants numbered 11,000 in total and hailed from 11 countries, including some of the hardest hit by the pandemic like the US, the UK, France, Spain and China. The survey was conducted entirely within the timeframe of the pandemic — the first of its kind for the auto industry — and thus provides interesting insight into what consumers are thinking right now.

For one thing, the idea of using a car instead of relying on public transportation or ride-share apps has become far more appealing. Nearly half of the 11,000 participants said they planned to use their cars more regularly and will avoid buses, subways, Ubers and other ride-share vehicles, where they can’t control hygiene and the risk of brushing up against unknown diseases is elevated. The study found that 75% of consumers who plan to buy a car in 2020 are motivated, first and foremost, by being able to create a safe and hygienic environment for themselves.

Capgemini found that younger people are particularly keen on the idea of vehicle ownership in a pandemic or post-pandemic world. Keep in mind, this is the same age group that has overwhelmingly avoided car ownership for the past decade. They live in cities by and large and use ride-sharing apps to get around. They rent a car or car-share when they need to get out of town. The survey found that 85% of 18- to 24-year-old participants in the survey have never owned a car and 79% of 25- to 35-year-olds have never owned a car. Set against the backdrop of COVID-19, 45% of those same participants under age 35 are now interested in buying their own cars.

This is a fascinating reversal that could give the auto industry a much needed boost heading into next year. It also could pose a threat to companies like Lyft and Uber, which were already losing billions of dollars a year and struggling to show any path toward long-term profitability before the pandemic hit.

Granted, this is just one survey from one moment in time. With so much uncertainty during the COVID-19 crisis, it’s hard to project a month into the future, let alone a year or two. The automotive industry is hurting badly right now, as evidenced by the corporate offices that are shuttered, the car dealerships that are closed, the factories that are out of commission and the thousands of employees who have been furloughed or fired. Twenty-six million people in the United States alone have lost their jobs in the past two months. A seismic shock like that won’t dissipate quickly. Every industry including the auto industry will feel the after shocks for a long time to come.

That being said, as consumer activity returns to normal in 2021 (let’s hope), the shifts in attitude that the Capgemini research found could reshape the future of ride-sharing, robo-taxis and automobiles — the auto industry could reap the benefits.

Leave a comment

Your email address will not be published. Required fields are marked *