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Driving isn’t cool any more.

Once upon a time, getting your driver’s license was the best thing that could happen to a teenager: It meant freedom, fun and escape. These days, however, apps, videogames and virtual reality seem to be more appealing.

The percentage of young people with a driver’s license has plunged during the last several years, according to a new study by the University of Michigan’s Transportation Research Institute. In 2008, for instance, 65.4% of 18-year-olds had a driver’s license. Now, 60.1% do. The trend has been underway for decades but seems to have intensified since the recession that began at the end of 2007.

In all age groups from 16 to 69, the percentage of Americans with a license has fallen since 2008. Above 70, it has inched up from 78.4% to 79%. This table shows all the changes:



Auto sales have been strong during the last few years, hitting record levels in 2015. Analysts expect a slight increase in sales for 2016, for another record year. But that may be largely due to pent-up demand among consumers who put off buying a car when the economy was weak and are only now catching up.

Fewer licensed drivers, meanwhile, portends fewer car buyers in the future -- a problem General Motors (GM), Ford (F) and the other big automakers are all aware of. Technology is part of the reason: Smartphones and social networks now provide a sense of connectivity that the automobile provided before the digital revolution. And they’re way cheaper.

More people these days live in cities, where cars are often more hassle than they’re worth. Many millennials lack the cash for such a big purchase anyway, since the job market for twentysomethings is still soft and the average student-debt burden is near a record high. And many millennials who do drive prefer leasing over buying, since there’s no down payment and you can upgrade your ride more often.

More than 90% of people between 45 and 69 drive, which means car sales probably aren’t about to fall off a cliff. Cheap financing and easing credit help. But automakers are also racing to get ahead of demographic trends by investing in businesses that provide an alternative to car ownership.

GM has invested $500 million in ride-share company Lyft, and it just purchased the remnants of a bankrupt competitor, Sidecar, for an undisclosed sum that's less than the $39 million investors plowed into the startup. Ford is experimenting with a Zipcar-style car-renting program in a handful of cities and is reportedly teaming with Google on a self-driving car project. And most automakers are partnering with tech titans such as Google (GOOGL), Apple (AAPL) and Microsoft (MSFT) on new software that syncs the car’s entertainment system with smartphones, allowing drivers to bring many of their favorite apps into the cabin and use them straight from the dashboard.

Automakers, nonetheless, are still dogged by worries that Peak Auto is upon us and it’s all downhill from here. Shares in GM and Ford have flatlined during the last two years—despite record sales and strong profits—with investors concerned there’s no growth ahead for car companies. It doesn’t help that emerging markets such as China and Brazil are wobbling, too. There's no shortage of young people in the world, but there may be a shortage of young drivers.
 

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Is it no wonder that younger people aren't getting licenses. The insurance rates for people under 25, or people that have less than 9 years of continued car insurance experience, pay through their nose. That along with high levels of student loans and low paying jobs and low availability of good paying jobs make the decline of car ownership and home ownership inevitable.
 

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Is it no wonder that younger people aren't getting licenses. The insurance rates for people under 25, or people that have less than 9 years of continued car insurance experience, pay through their nose. That along with high levels of student loans and low paying jobs and low availability of good paying jobs make the decline of car ownership and home ownership inevitable.

In addition to the above, the introduction of services like Zipcar, and many employers offering the combination of such a service along with prepaid transit passes as standard employee benefits, reduces the need among those with licenses to own their own cars.

I suspect that a good percentage of millennials that don't currently drive or own cars eventually will, but based on the behaviors established as twenty-somethings, we'll probably see a lot more one-car households than previous generations, equating to an eventual shifting of the demand curve, at least within certain markets. Definitely something for automakers to consider in their strategic planning and long-term forecasting.
 

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Probably one of the statistic tables that's encouraging investment into automaton cars. Reopens the youth market.


Young drivers don't want a 15 year old, beat up. 1 Litre car.
They want street cred.


Insurers argue that an old 3 litre car still has the engine performance, but probably not the handling (brakes, suspension and such) that match. So it's still expensive.


Good news, it doesn't get much better as you get older.
I pay less than those teens, but I pay more (even with discounts) than I did when I first started out.


The desire is not driven by driving, it's standing out from the crowd.


More stripes, anybody?
 

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I gotta wonder if Apple is working on an iShareCar.
I'm assuming that you at least have your tongue in your cheek? However, this is one of the potential outcomes that comes with the widespread adoption autonomous vehicles. It does make sense to some extent, in that the majority of cars are parked up for most of the time. There would be a massive increase in utilisation if the car was shared between users that had time-spaced or phased requirements.

There cannot be an ever increasing number of vehicles on the road, that model just doesn't work out in the long run.
 

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In the future with driverless cars will you even need a licence? Perhaps these statistics are one of the "drivers" for this technology for car manufacturers!
 

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I so look forward to getting into an auto taxi, on a Friday night after a bunch of hoons used it last.


They'll have to find a way to ensure the car is clean and tidy after every use.


Of course, they could adopt the approach of the modern public wc's.
Steam clean after every user.


Can't wait for the tube vids showing some poor sap, stuck in the car, but freshly laundered.
 

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In the future with driverless cars will you even need a licence? Perhaps these statistics are one of the "drivers" for this technology for car manufacturers!
For sure the car manufacturers discuss and are aware of the key issues. No doubt these stats figure in their thinking.

As for the driving license question, that has not been resolved yet as far as I know.

To me, needing to have a qualified driver on board ready to seize control (and assume responsibility) in the event that the autonomous system is unable to cope, is a pretty useless premise on which to go forward.

To start with: How does one become a qualified driver for a driverless vehicle?
 
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