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Ridesharing: The Millennial Effect

rideshare

Ridesharing services like Lyft and Uber are here to stay. According to a recent report from SharesPost, consumers are using ridesharing services more than ever before. In fact, U.S ridesharing adoption jumped 15 points to 53% in 2017. This is in part due to the continued popularity among millennials, who make up 57% of all rideshare passengers. They have embraced ridesharing more than any other demographic, driving the growth in the ridesharing economy. Love ‘em or hate ‘em, millennials are spurring changes to industries across the board.

Purchasing a car was once considered a rite of passage, however, studies are showing car ownership has declined in the past five years, particularly among the millennial generation. Millennials have a lower rate of car ownership than previous generations at their age, and only 76% of 20-24 year-olds possess a driver’s license, down from 82% in 2008. The millennial generation has grown up with a more ambivalent relationship to cars than previous generations, in part due to having other transportation options, such as ridesharing. Rather than purchasing a car and dealing with the upkeep and maintenance, many millennials prefer to treat transportation as an on-demand service.

While it doesn’t seem like much at the time, the $10-$20 trips add up. According to a study done by the U.S. Department of Transportation, Americans who use ridesharing apps spend an average of $4,000 a year on them. An investment firm did an analysis and calculated that the average millennial will spend $323,190 on ridesharing over the next 25 years!

By 2025, millennials will represent 75% of the workforce and 46% of total US income. Rideshare companies are capitalizing on this and targeting millennials by partnering with credit card companies. The Uber Visa is one such partnership: a no-fee, cash-back card, which has a reward program tailored to millennials. The rewards include 4% back at restaurants (including UberEats), 2% on online purchases (including Uber rides), and $50 off subscription services such as Netflix and Hulu.

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Rudly Raphael
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