1. Autonomous vehicle fleets will quickly become widespread and will account for the majority of Lyft rides within 5 years.
Last January, Lyft announced a partnership with General Motors to launch an on-demand network of autonomous vehicles. If you live in San Francisco or Phoenix, you may have seen these cars on the road, and within five years a fully autonomous fleet of cars will provide the majority of Lyft rides across the country.
Tesla CEO Elon Musk believes the transition to autonomous vehicles will happen through a network of autonomous car owners renting their vehicles to others. Elon is right that a network of vehicles is critical, but the transition to an autonomous future will not occur primarily through individually owned cars. It will be both more practical and appealing to access autonomous vehicles when they are part of Lyft's networked fleet.
Why? For starters, our fleet will provide significantly more consistency and availability than a patchwork of privately owned cars. That kind of program will have a hard time scaling because individual car owners won't want to rent their cars to strangers. And most importantly, passengers expect clean and well-maintained vehicles, which can be best achieved through Lyft's fleet operations. Today, our business is dependent on being experts at maximizing utilization and managing peak hours, which allow us to provide the most affordable rides. This core competency translates when we move to an autonomous network. In other words, Lyft will provide a better value and a superior experience to customers.
I'll have more to say on how the autonomous network will work a bit later in this piece.
2. By 2025, private car ownership will all-but end in major U.S. cities.
As a country, we've long celebrated cars as symbols of freedom and identity. But for many people — especially millennials — this doesn't ring true. We see car ownership as a burden that is costing the average American $9,000 every year. The car has actually become more like a $9,000 ball and chain that gets dragged through our daily life. Owning a car means monthly car payments, searching for parking, buying fuel, and dealing with repairs.
Ridesharing has already begun to empower many people to live without owning a car. The age of young people with driver's licenses has been steadily decreasing ever since right around when I was born. In 1983, 92% of 20 to 24-year-olds had driver's licenses. In 2014 it was just 77%. In 1983, 46% of 16-year-olds had licenses. Today it's just 24%. All told, a millennial today is 30% less likely to buy a car than someone from the previous generation.
Every year, more and more people are concluding that it is simpler and more affordable to live without a car. And when networked autonomous vehicles come onto the scene, below the cost of car ownership, most city-dwellers will stop using a personal car altogether.
3. As a result, cities' physical environment will change more than we've ever experienced in our lifetimes.
So why should you care about changes in transportation? Even if you don't care about cars — even if you never step into a Lyft or an autonomous vehicle — these changes are going to transform your life. Because transportation doesn't just impact how we get from place to place. It shapes what those places look like, and the lives of the people who live there.
The end of private car ownership means we'll have far fewer cars sitting parked and empty. And that means we'll have the chance to redesign our entire urban fabric. Cities of the future must be built around people, not vehicles. They should be defined by communities and connections, not pavement and parking spots. They need common spaces where culture can thrive — and where new ideas can be shared in the very places where cars previously stood parked and empty.
Taken together, this urban reimagination has the opportunity to deliver one of the most significant infrastructure shifts we have ever undertaken as a nation. And the good news is that we have to make these investments anyway. The American Society of Civil Engineers recently gave U.S. infrastructure a D+, estimating that our country requires $3.6 trillion in infrastructure investment by 2020. If we have to rebuild and revitalize our roads and cities anyway, let's do it in a way that puts people, not cars, at the center of our future.
Before we continue looking forward, I want to take a moment to look back at how we got here. Because there's something I haven't mentioned yet. This won't just be a transportation revolution: It will be America's third transportation revolution.
How We Got Here: America's First Two Transportation Revolutions
America looked very different in the early days. At the turn of the nineteenth century, the U.S. was made up of loosely connected, largely agricultural communities. If you wanted to travel over long distances, the covered wagon was pretty much your best option. The United States, in other words, were still pretty divided.
That all changed over the next several decades, as America constructed a massive transportation network of canals and railroads. By 1860, the first revolution was in full swing as more than 30,000 miles of railroad track spread out across the U.S. — and as tracks linked together, so did communities, economies, and people. Wherever these transportation networks went, small outposts were transformed into thriving cities. Chicago, Baltimore, and Los Angeles exist as they do today because of transportation innovations that helped spark their growth.
Now fast-forward into the next century, when the assembly line automobile came onto the scene. For individuals, this brought almost unprecedented freedom. But for our cities, car ownership started a vicious cycle: as more cars filled the streets, more roads had to be built to accommodate them. This second transportation revolution caused communities to spread farther and farther apart, which made having constant access to a car increasingly necessary — resulting in even more cars that needed even more space. In the process, our cities were dramatically reshaped to favor cars over communities.
Across the country, city planners wanted to make it as easy as possible for drivers to access metropolitan areas. That often meant building highways straight through the centers of our most vibrant cities. Neighborhoods were literally split in half, and many never recovered.
In some cases, neighborhoods were demolished to make room for cars. In Los Angeles, for instance, engineers built structures like the Four Level Interchange, which connects the 101 with the 110 and hosts 425,000 cars a day. The builders made room for it by knocking down 4,000 houses and apartment buildings that were there before.
In addition to widespread demolition, there was also a more subtle way that cars began to reshape our cities. Streets themselves used to look very different than they do today. Most were more narrow, leaving room for sidewalks, front yards, and places where people could come together outside.
Back then, people used city streets as public spaces. Streets were where children could play. A place for shopping, where you could stop at a cart on the way home to pick up everything from dinner ingredients to shoes for your family. People spent a lot of time outside on the street, making friends, seeing neighbors, and living their lives within a true community.
But when streets began to be redesigned for more and more cars, all of these other benefits suffered. As time went on, streets became a place solely for cars. They encroached closer to homes. Yards disappeared. People were left with narrower sidewalks — or no sidewalks at all. That meant less foot traffic, which made it harder for small businesses, shops, and restaurants to flourish. Development patterns changed dramatically and the strip mall was born. And with fewer people outside, neighborhoods also became less safe because we lost the benefit of having "eyes on the street" most hours of the day. For the first time in history, cities were no longer centered on human social interaction.
All of this made it harder for a community to thrive. And as changes like this played out across the country, the face of America's cities was transformed for generations.
The Problem with Cars
At this point we should probably take another step back to answer a simple question: Why is a company built around cars complaining about cars? The answer is that vehicles themselves aren't the problem. The problem is how we use them — and just as importantly, how we don't.
I studied hospitality in college, so sometimes I can't help looking at the world through the lens of a hotel. What's the occupancy? Are you getting great service? And it's actually interesting to think this way about transportation — to imagine that our ground transportation is being run like a hotel.
To measure the health of our transportation hotel, let's start by looking into how much money we spend on car ownership and how often we actually use our cars. It may shock you, but Americans spend more than $2 trillion every year on car ownership — more money than we spend on food. What's even more staggering is that for all the money we spend on them, the 250 million cars in America are only occupied 4% of the time. That's the equivalent of 240 million of the 250 million cars being parked at all times. For the most part, your car isn't actually a driving machine at all. It's a parking machine.
Can you imagine a hotel where almost every room is empty? A hotel that spends an enormous amount of money maintaining those empty rooms, no matter how little they're used? It would go out of business tomorrow. And if you think about occupancy of cars the same way, the observation is simple: America is running a failing transportation business.
Plus, think about where all those unused cars sit while they're idle. In 2011, researchers estimated that there are at least 700 million parking spaces in the U.S. That means our country has more than 6,000 square miles of parking — bigger than my home state of Connecticut.
We can't be this inefficient anymore, because we're about to hit an inflection point that will strain our cities' resources like never before. The U.S. already has ten cities with more than a million people. And our urban population is growing fast. By 2050, almost 100 million more people will move to American cities.
We don't have enough space, housing, or public transit to accommodate this population influx, especially while keeping cities livable and desirable places to be. And while fixing transportation won't solve all these problems, it certainly doesn't help to continue devoting so much of our space to unoccupied cars.
The Third Transportation Revolution
The good news is we don't have to keep building our country around car ownership. Technology has redefined entire industries around a simple reality: you no longer need to own a product to enjoy its benefits. With Netflix and streaming services, DVD ownership became obsolete. Spotify has made it unnecessary to own CDs and MP3s. Eventually, we'll look at owning a car in much the same way.
A full shift to "Transportation as a Service" is finally possible, because for the first time in human history, we have the tools to create a perfectly efficient transportation network. We saw this potential in 2012 when Lyft became the first company to establish peer-to-peer, on-demand ridesharing, which is now what the world knows simply as ridesharing. What began as a way to unlock unused cars, create economic opportunities and reduce the cost of transportation, has today become the way millions of Americans get around.
Ridesharing is just the first phase of the movement to end car ownership and reclaim our cities. As I mentioned before, the shift to autonomous cars will expand dramatically over the next ten years, transforming transportation into the ultimate subscription service.
This service will be more flexible than owning a car, giving you access to all the transportation you need. Don't drive very often? Use a pay-as-you-go plan for a few cents every mile you ride. Take a road trip every weekend? Buy the unlimited mileage plan. Going out every Saturday? Get the premium package with upgraded vehicles. The point is, you won't be stuck with one car and limited options. Through a fleet of autonomous cars, you'll have better transportation choices than ever before with a plan that works for you.
Using the Lyft network will also save you money. Here's why: We don't often think about it, but owning a car and making monthly payments also means paying retail prices for every aspect of getting where you need to go — fuel, maintenance, parking, and insurance. In a future subscription model, the network will cover all of these costs across a large network of cars, passing the savings onto you. We cut the hassle and you get the one thing you really want: the true freedom to ride.