Work-From-Home Will Reduce Driving by 270 Billion Miles Per Year
A study concludes Work-From-Home Culture Will Cut Billions of Miles of Driving.
The research conducted by consultant KPMG International finds the cocoon culture Covid-19 has created is not going away -- even if a vaccine is made widely available -- and that will have potentially dire consequences for the auto industry.
“If two of the primary missions that the American public buys a car for are going to reduce in demand, we know that’s going to have an adverse impact on auto sales. It’s just like gravity.”
- During the height of the pandemic in April, Americans sheltering at home drove 64% fewer miles, an unprecedented decline in travel. Less driving is the new normal.
- Increased working from home and online shopping will reduce driving in the U.S. by up to 270 billion miles a year, a 10% permanent reduction of the almost 3 trillion miles typically traveled every year.
- Commuting decline will remove 14 million cars from U.S. roads
- Vehicle ownership will decline to slightly less than two cars per household.
- New car and truck sales will decline by roughly 1 million vehicles per year.
- Fewer miles driven and fewer cars on the road also means dealers and mechanics will have less money coming in from repairs and other after-market services aimed at keeping cars running.
Covid Accelerated a Trend
Covid did not cause a trend change. Rather, it accelerated trends in place.
- Online shopping was already making huge year-over-year increases.
- New technology made virtual meetings more productive. Companies needed a push to head that way quicker and got a big one.
- Retiring boomers are looking to downsize.
- Millennials do not have the same love for cars or driving as their boomer parents.
- Cars are getting more and more expensive, fewer people can afford them.
- In cities, Uber and Lyft are widespread enough for many to ditch cars.
On Demand Rentals
Big changes in the way car rentals work once self-driving takes hold. But self-driving interstate trucks will beat cars. For now, Covid delayed those trends. Congress is now overwhelmed with stimulus deals, immigration, and DACA.