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New mobility wave (MaaS) rises in response to declining auto sales
In the U.S., the gradual movement away from car ownership has caused ripples across the auto industry and other peripheral sectors with mixed results. Automakers have been contending with decreasing vehicular production the past few years, especially with more than half the millennial set opting against owning a car. On the other hand, participants in the car rental and ride sharing industries have noticed gains in revenue the past couple years, especially Enterprise, which posted record earnings in 2018.
But the drop in vehicle ownership isn’t unique to the U.S. According to the CBC, it’s also prevalent in Canada. And in a country that places more value in combatting climate change than its southern neighbor, even the rollouts of electric vehicles, with autonomous models around the corner, haven’t been enough to lure younger citizens to the four-wheel lifestyle.
One statistic recently unveiled by DesRosiers Automotive Consultants indicated that sales of light vehicles in Canada dropped in 2018 by nearly 10 percent over the previous year. A McGill study demonstrated that young people who drive has been dropping steadily since 2003, as low as 18 percent in the case of adults aged 25-29.
The evidence among automotive and demographic experts hints that there’s a movement among young Canadians to simply opt against not only car ownership but driving altogether. Reasons vary from inflation, reduced income in a gig economy, environmental consciousness and changes in urban planning and public transportation.
The changing faces of car ownership in Canada are slowly giving away to a new movement that’s being dubbed MaaS, short for Mobility as a Service. In this instance, the idea of mobility as an asset is dropping as a result of people deciding not to own a vehicle and be burdened by those extra costs including insurance and fuel. Correspondingly, that shift has much of the traffic heading towards public transport, ride sharing and even car rentals.
According to Statistica, Canada’s car rental market stands to gain from the move towards MaaS. Revenues in 2019 are predicted to hit US$806 million, with a growth rate conservatively estimated at 1.3 percent annually and slated to reach US$849 million by 2023. Major companies like Enterprise, Avis and Hertz, which also dominate the U.S. market, will continue to be heavy hitters in Canada.
And barring any additional impact from ride sharing competitors, if MaaS continues to gain momentum, those figures could be even higher.
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