Canadian Millennials would rather have a smartphone than a car

Last week the Ottawa Citizen ran a piece by Taras Grescoe, “Cars aren’t cool anymore,” that discusses the Millennial generation’s declining interest in owning a vehicle. The piece takes this theme that has sparked a lot of discussion in the US around the idea of transportation vs. technology. (By “technology” they mostly mean smartphones and Internet access.)

Most striking was the statistic that more than two thirds of 16 year olds in the US do not have a driver’s license.

We’ve found a similar trend in Canada; according to a 2011 study done by Abacus Data 47% of 18 to 20 year olds in Canada said they do not have a driver’s license. Even among those Millennials between 21 and 27 around 20% do not have a driver’s license.

Grescoe notes how carmakers are clearly nervous about this trend away from ownership as the Millennials are on track to make up three-quarters of the potential car-buying market by 2025.

The article identifies the year 2000 as the highest car sales peak in North America and indicates some reasons for the trend away from driving. “Technology, a weak economy and urban living are leading to fewer young people obtaining licenses.”

While I will not disagree that all three are influential factors in the shift away from driving I see the urban-Millennial culture as equally important. Grescoe described in his article, “..earbuds offer insulation from all but the most egregious commuting annoyances, and you can get some serious texting done when you’re not behind the wheel.”

Come to think of it, I don’t mind taking transit; it’s actually a good time for me to catch up on social media while listening to a new playlist. I would rather not have a car in the city; I like to bike and walk and not worry about parking.

Grescoe’s interpretation resonated, “…if they never buy that first car, they might not end up where cars tend to lead: office parks off freeways, malls and suburban driveways.” Most importantly, he says, Millennials would rather spend their money on other things, and they’re quite happy to find other ways to get around in Canada’s cities.

Another Reuters article published this month pointed out that in the US young people are ditching cars for smartphones. Researchers at the University of Michigan Transportation Institute have found, “the fraction of teen drivers tends to fall as a country’s level of Internet access increases.”

This trend noted in the US can be seen among Canadian Millennials as well. Millennials between the ages of 18 – 20 are more likely to have a smartphone than a driver’s license or a car. In our Millennial poll we found that among 18 – 20 year-olds 58% have a smartphone. This “secondary purchase” outweighs the need to buy a vehicle among most people in this age group.

Smartphones help us to navigate and find who or what we need where we are. To previous cohorts of young people the vehicle symbolized freedom. Today, Millennials are connected and devices like smartphones, laptops and tablets that help us stay connected throughout the day are a higher priority.

This shift towards other communications technology and away from vehicles threatens demand for the auto industry and increases demand for public transportation. Perhaps most importantly, this shows the need for Canadian cities to adapt and begin to move away from accommodation for automobiles.

Grescoe identified some of the ways Millennials can get around in most urban centres today by opting for memberships in bike-share programs or car share programs or monthly transit passes. While public transit is becoming easier to use the need to re-think our urban transportation systems to adapt to this generational shift away from vehicles is imperative.

Jaime is an Analyst at Abacus Data and a thought leader for its Canadian Millennials research practice.

Contact Jaime Morrison:

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