Work-From-Home Will Reduce Driving by 270 Billion Miles Per Year

Mish

More shop-at-home and work-from home will make a significant dent in the total number of miles people drive.

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.”

Key Findings

  1. 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.
  2. 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.
  3. Commuting decline will remove 14 million cars from U.S. roads
  4. Vehicle ownership will decline to slightly less than two cars per household.
  5. New car and truck sales will decline by roughly 1 million vehicles per year.
  6. 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.  

Mish

Comments (45)
No. 1-17
IA Hawkeye in SoCal
IA Hawkeye in SoCal

Morning traffic is half of what it used to be. Afternoon traffic is almost what it was pre-Covid.

numike
numike

If the coronavirus is really airborne, we might be fighting it the wrong way
Airborne transmission would mean there are certain solutions we really need to focus on. https://www.technologyreview.com/2020/07/11/1005087/coronavirus-airborne-fighting-wrong-way

Rbm
Rbm

Mish you forgot gas prices will go up because they will have to raise gas taxes to make up for lost revenue.

Six000mileyear
Six000mileyear

Insurance companies will take losses as well.

txvoluntarist
txvoluntarist

Love online shopping and would love to be able to work from home.

Webej
Webej

Just think how many miles of driving will disappear from people not working at all (at home or at work).

tokidoki
tokidoki

So Tesla will become the most valuable company in the world soon?

Say it ain't so Mish. Supposedly tents are going up again at the company's Fremont location.

Fl0yd
Fl0yd

Seems as 10% slump in mileage - approx. I'm surprised such a modest change.

Captain Ahab
Captain Ahab

Add in a move to the suburbs, decline of the city core, reduced public transportation, impact on property taxes and tax revenues generally; and car mileage is the least of the problems.

And the winner is: 'lifestyle' environments like Utah....

Casual_Observer
Casual_Observer

Who needs an office when you have a 1Gbps connection from home.

quixote2u
quixote2u

based on observations with my own eyes, the bar chart presented is a lot of hooie..

Anda
Anda

At over 2.5 trillion you could still drive to Alpha Centauri in under ten years, just needs some infrastructure.

Carl_R
Carl_R

It's not just the businesses you mentioned that will be affected by a big shift to work at home. What about Menswear and Womenswear? If they aren't going to work, do they need as many suits, etc? And the cleaners that clean those clothes? What about all the lunch spots? Then there are the coffee shops, and bagels/muffins. Lot's of other shops that cater to workers shopping during lunch will also be affected.

Mr. Purple
Mr. Purple

10% more wildlife not killed by motor vehicles.

gregggg
gregggg

Future Headline: Mysterious increase in monogamy - Experts baffled.

TimeToTest
TimeToTest

Insurance companies put premiums into a pool called float. Float is money for losses not realized yet. This float is invested in bonds and super safe funds to lower premium cost.

The reality is the huge drop in interest rates will raise insurance cost more than the lower risk from few miles.

ZIRP makes everything more expensive so if you expect your premiums to go down guess again. They are going up.

RayLopez
RayLopez

I will be the dissenting voice and point out that one social science study cited at the MarginalRevolution site a few days ago said that working from home slightly decreases performance since people work a bit more intensely when co-workers are watching them. I guess you can mandate videoconferencing or "camera on at all times" policies to mitigate that...but the camera angle set to be from the neck up! :)


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