I bought a used car recently, and a few days after I brought it home, a friend asked me, "Do you think this is the last car you'll ever buy?"
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We talk a lot about self-driving cars, so I knew exactly where he was going with his question. He was hinting at the factthat both autonomous car technologies and ride-sharing services areadvancing so quickly that by the time I'd be in the market for another vehicle, I might not actually need to buy one.
Image source: Getty Images.
By 2035, the IHS estimates there will be 76 million cars on the road worldwide with some level of autonomy. Even now, semi-autonomous cars that can keep themselves in their lanes, automatically brake in emergency situations, and slow down to match the speed of the car in front of themcan be purchased for as little as $20,000.
And as genuinely driverless cars get cheaper and become ubiquitous, you and I may opt out of monthly car payments and opt-in to a monthly mileage subscription service instead.
Automakers are investing in this future
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To understand how it's possible that we could soon live in a world where most people don't own cars, we need to look no further than what the automakers themselves are doing.
Elon Musk's recently updated version of Tesla's(NASDAQ: TSLA)master plan includes details on a new service: When the company's vehicles become fully autonomous (by 2018 or 2019, according to Musk), Tesla owners will be able to allow their vehicles to drive themselves around and be rented out by other people.
As Musk wrote:
You will also be able to add your car to the Tesla shared fleet just by tapping a button on the Tesla phone app and have it generate income for you while you're at work or on vacation, significantly offsetting and at times potentially exceeding the monthly loan or lease cost.
Image source: Tesla.
Musk also said that Tesla would deploy its own fleet of driverless vehicles for rent in areas where there was more demand for Tesla vehicles than privately owned cars could meet, so that "you can always hail a ride from us no matter where you are." Remember, this isn't the catchphrase of a taxi company, nor even a ride-hailing service -- but rather the direction where Musk sees his automaker headed.
And just in case think this mentality is unique to the innovative Tesla, consider what General Motors(NYSE: GM)is doing. The giant automaker launched a ride-sharing service last year called Maven, which allows some GM owners to rent out their vehicles when they're not in use. The cars don't drive themselves yet, but the company sees it as a first step toward a future where people are less inclined to own cars.
In a press release at the time, GM said that more than 25 million of its customers around the world will use some form of shared mobility by 2020, and describe Maven as "a key element of our strategy to changing ownership models in the automotive industry." Maven has spread to 17 cities across North America in just 11 months, has 22,000 members, and has been used for 57 million miles of driving.
Not to be outdone,Ford(NYSE: F) has launched its own ride-sharing service, and is developing autonomous cars just like GM. Ford has made it clear that it intends to launch a "high-volume" driverless car paired with ride-hailing and ride-sharing services by 2021.The company is already testing 30 self-driving Fusion Hybrids in several states, and plans to triple the number of test vehicles this year.
Other automakers are moving in this direction as well. Fiat Chrysler (NYSE: FCAU) is working with Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google to test a fleet of 100 self-driving minivans that will be the basis for a ride-hailing service set to launch later this year. It's still unclear what the service will look like, or if Fiat Chrysler will play a critical role in it, but what is clear is that the automaker believes in the viability of Waymo's cars-as-a-service goal.
Will this really end car ownership?
It's hard to answer this question conclusively, of course. After all, most people haven't even seen a fully autonomous vehicle on the road, let alone ridden in one.
But John Zimmer, theco-founder and president of ride-hailing company Lyft, believes that by 2025 "private car ownership will all-but end in major U.S. cities."Lyft expects the majority of its vehicles to be self-driving by 2021, and rival Uber is testing similar strategies as well.
Others have set similar timelines for the demise of car ownership.Georg Bauer, who has held executive positions at Daimler, BMW, and Tesla told Business Insiderlast year that he thinks car ownership could be dead within five to 10 years.
Government regulations and our own apprehension about giving up control over our vehicles may preserve the widespread car ownership culture for longer than some expect. But what's crystal clear is that tech companies and automakers alike are betting on an automotive future that looks very different than today. Like many things, the transition from owning cars to renting driverless ones on an as-needed basis will likely occur in stages -- but let's be clear, things are certainly moving in this direction. And I, for one, would welcome a world without car payments.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Chris Neiger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Ford, and Tesla. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.