What it is: For decades, people have thought that mass transit would solve the problems of traffic congestion, but the real answer may be ride-sharing.
Detroit is known for protecting the auto industry at all costs. Yet even Detroit can see that the future of cars will no longer be selling cars to individuals. That’s because the future points to a time when people will simply pay for a subscription service to a ride-sharing service. When it becomes far cheaper to rent a car for a ride rather than buy and maintain your own car, why will many people want to buy and own their own car? Owning a car means paying insurance, maintenance, and parking in addition to dealing with the daily frustration of driving through rush hour or unfamiliar parts of town.
Ride-sharing means having a car pick you up and take you to your destination while you sleep, read, chat on a phone, or simply stare out the window and relax. Compare ride-sharing with mass transit and you can see the huge advantage of ride-sharing.
Ride-sharing picks you up where you’re at and drops you off where you want to go. Mass transit forces you to get to a station and then it drops you off near your final destination but you may still need to walk or ride to get there. Mass transit also shuts down at night while ride-sharing can go on 24 hours a day. Given the choice between mass transit or ride-sharing, it’s far more convenient to use ride-sharing and far less expensive too.
Cities don’t need to invest billions in mass transit systems when they can use existing roads more efficiently with ride-sharing. The people who will suffer in the future will be:
- Auto makers who will sell fewer cars to individuals
- Parking lots that will see fewer customers (think Blockbuster Video, K-Mart, or Borders Books)
- Mass transit operators who will see fewer customers while wrestling with maintenance costs
- Insurance companies that will lose customers who no longer own cars
The future is the Third World. The Third World never could afford the massive infrastructure needed to develop a telephone system, so that’s why in many parts of the world, landline telephones are expensive and rare. When cellular telephones arrived, the Third World immediately jumped on this opportunity. In comparison, the First World already had landlines so they had less of a pressing need for cellular telephone networks. Go to many Third World countries and you’ll find that their cellular phone network is far more extensive and reliable than in major cities in America. That’s the future of ride-sharing as well.
In many Third World countries, they can’t afford the massive infrastructure of subways or trains. They can afford dirt roads so when ride-sharing becomes feasible on a large scale with self-driving cars, you can be certain the Third World will take full advantage of these features first because they have to.
That’s the reason why Kenya leads the world in mobile payments. In Kenya, banks are nearly non-existent so when the idea of mobile payments through cell phones became possible, Kenyans leaped at the opportunity while Americans did not since they already had banks they could rely on. In many ways, the First World is falling behind the Third World because the First World remains hampered by ancient technology.
So watch ride-sharing. It’s the future and car ownership is not. Detroit already knows the future isn’t car ownership. The big question is whether they’ll do anything about it before it’s too late.