Transportation & Mobility

When it Comes to Transportation, Gen Z Wants Options

For Gen Z, the car is no longer the means of choice when it comes to getting from A to B, but rather one option among many. While the baby boomers helped define car culture as we know it, Gen Z is creating an entirely new mobility culture. Automakers and mobility providers will need to adapt to the demands of these coming-of-age digital natives.

From ownership to usership

In the age of the subscription model, of Netflix and Spotify, almost everything is shared rather than possessed. This trend is also reflected in how we get around – the industry is seeing a significant shift from mobility ownership to usership. In the UK, for example, the number of young adults (aged 17 to 20) with drivers’ licenses has fallen by 40 percent since the 1990s. The car is increasingly losing its importance as a status symbol, especially for Gen Z. This comes down to a variety of reasons, with one main factor being cost – with rising living expenses, many young adults simply can’t afford to buy a car. Location also plays a part: a larger proportion of Gen Z live in urban areas, where cars are less necessary. Third, younger generations are choosing to start families much later than their parents and grandparents, reducing the logistical need for a vehicle.

Digitization and the emergence of new mobility services are also influencing this shift. Ridesharing providers like Uber and Lyft, last-mile products such as e-scooters and on-demand services are increasingly changing mobility, albeit mainly in cities, and are closing the last gaps in the public transport infrastructure. Growing environmental awareness among young people also plays a significant role in choice of transport, as sustainability proves to be a primary concern for this generation, making the ecological digitization of mobility an increasingly interesting concept.

Gen Z live their lives online. They prefer to switch between digitally offered mobility solutions on an ad hoc basis, with transportation options permanently at their fingertips. This explains why the market share of new mobility providers is growing rapidly. Innovative business models in the form of integrated apps that include services such as public transport, car sharing, taxi services, rental bikes, scooters and others, are the financially more attractive option for many Gen Zers, and at the same time, are better combined with their interest in environmental protection.

Urban versus rural living

Change in Gen Z’s transportation preferences will come when they start families. Many will need the reliability of owning their own car, the safety and space that owning a vehicle provides, and many will move to the suburbs where personal transport is more of a necessity. But once at this life stage, preference for digital experiences won’t go away. Regardless of age or location, vehicle owners will expect connected features, just as they do from other products and services.

But until then, there are clear differences in modes of transportation for those residing in urban, suburban and rural areas. Rural areas often lack reliable infrastructure, public transportation options and can mean long commutes to work, shopping and other amenities for those that live there. Here, owning a car will remain the most convenient means of transport for many Gen Z residents purely due to lack of other available options. Sharing models or similar alternatives cannot currently be operated profitably outside urban agglomerations.

Cities tell a different story. Most municipalities in Europe and many in North America are pursuing the goal of reducing carbon emissions and eventually banning or curbing individual car transport from main areas of cities within the coming decade. For example, the UK government announced the Future of Mobility Grand Challenge, and in Paris, the 15-minute city proposal. The combination of high fuel costs, insurance costs, lack of parking and a wide range of cheaper, more convenient transport options further thwarted by a sharp rise in living costs present high barriers to car ownership.

So far, despite environmental benefits, electric vehicles (EVs) have not been particularly attractive to younger consumers due to vehicle cost, as well as cost and lack of charging infrastructure. In short, owning an EV is inconvenient for this demographic in both urban and rural areas. The car as a status symbol no longer has the same significance as it did for previous generations. In an age where experience is everything, monetary investments have lots of competition among Gen Z and their millennial elders. Today, rather than investing in a car, many are choosing to save for things like education and instead spend on experiences, essential products and technology.

Mobility as a service

Individual mobility services must be consolidated into holistic mobility platforms so that the user doesn’t have to switch between various apps, and autonomous driving will generate new opportunities for innovative business models. To stay afloat in a world of digital disruption, the automotive industry must adapt. Consumers will want their cars to have as many technical innovations as possible, making their lives easier and more convenient. In turn, high levels of safety and sustainability will be of utmost importance. Personalized experiences, connectivity and comfort will be the key to success for the future of mobility as a service.