Monday, August 26, 2013

Economy: Has Driving Peaked?

(Drivebycuriosity) - The media love peaks. You could find headlines about "peak oil", claiming that the global oil production will soon reach its peak and will start shrinking, "peak live expectancy", claiming that the average life span in the U.S. is already sinking, "peak income", "peak wealth" and more (driveby).

Recently I found another peak: "peak car" (theatlanticcities). The magazine "The Atlantic" uses this term to unite terms as "peak driver’s license" "peak registered vehicle", "peak gas consumption", "peak miles traveled". They refer to statistics that show falling numbers for driver licenses, registered vehicles and more car related topics in the U.S.

I believe that most of those peak claims are wrong and just a tribute to the gloomy zeitgeist. And the recent reports that the U.S. car sales are booming again don´t confirm this "peak car" thesis. (Don´t those Atlantic journalists read the news?). But anyway, those statistics have some interesting tidbits.

The statistics show that in the U.S. car related numbers, for instance miles driven per car or per household, have peaked in the year 2004 and have been falling since then. This was exactly the year when the price of oil - and gas at the pump - started their steep rise (crude-oil). Today oil and gas cost around 3 times their average price in the 1990!

It would be surprising if the consumer would not respond to this triple and would not drive less.

And there could be more responses. Studies show that people have started to migrate back from the rural areas to the cities, reversing a trend that has been popular for decades (driveby). This could be a reaction to the gas price explosion.

High gas prices work like a tax on commuting from rural areas to working places, shops and leisure spots. Today´s gas prices make living in cities more attractive because the commuting ways are much shorter - and cheaper. Some people, who migrate to the cities might even give up their cars.

Until last year I had lived in the periphery of Bonn, a sleepy town in Germany. There I needed a car for going to the gym, shopping in discount markets and spending leisure time in the centers of Bonn and the nearby Cologne (Köln). Now I live in Manhattan, New York City. I don´t need a car anymore because there are a lot of shops, cafes & restaurants around the corner and the gym is just  7 minutes walking time away. For longer distances I use the dense and cheap public transportation network (subway & buses).

I don´t think that the more than 100 years old success story of cars has found a sudden end. But as long as oil & gas stay expensive they will slow down the demand for cars and their use.

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