A study concludes Work-From-Home Culture Will Cut Billions of Miles of Driving.
The research conducted by consultant KPMG International finds the cocoon culture Covid-19 has created is not going away — even if a vaccine is made widely available — and that will have potentially dire consequences for the auto industry.
“If two of the primary missions that the American public buys a car for are going to reduce in demand, we know that’s going to have an adverse impact on auto sales. It’s just like gravity.”
Key Findings
- During the height of the pandemic in April, Americans sheltering at home drove 64% fewer miles, an unprecedented decline in travel. Less driving is the new normal.
- Increased working from home and online shopping will reduce driving in the U.S. by up to 270 billion miles a year, a 10% permanent reduction of the almost 3 trillion miles typically traveled every year.
- Commuting decline will remove 14 million cars from U.S. roads
- Vehicle ownership will decline to slightly less than two cars per household.
- New car and truck sales will decline by roughly 1 million vehicles per year.
- Fewer miles driven and fewer cars on the road also means dealers and mechanics will have less money coming in from repairs and other after-market services aimed at keeping cars running.
Covid Accelerated a Trend
Covid did not cause a trend change. Rather, it accelerated trends in place.
- Online shopping was already making huge year-over-year increases.
- New technology made virtual meetings more productive. Companies needed a push to head that way quicker and got a big one.
- Retiring boomers are looking to downsize.
- Millennials do not have the same love for cars or driving as their boomer parents.
- Cars are getting more and more expensive, fewer people can afford them.
- In cities, Uber and Lyft are widespread enough for many to ditch cars.
On Demand Rentals
Big changes in the way car rentals work once self-driving takes hold. But self-driving interstate trucks will beat cars. For now, Covid delayed those trends. Congress is now overwhelmed with stimulus deals, immigration, and DACA.
Mish
I will be the dissenting voice and point out that one social science study cited at the MarginalRevolution site a few days ago said that working from home slightly decreases performance since people work a bit more intensely when co-workers are watching them. I guess you can mandate videoconferencing or “camera on at all times” policies to mitigate that…but the camera angle set to be from the neck up! 🙂
https://www.armstrongeconomics.com/armstrongeconomics101/economics/government-media-induced-psychological-terrorism/
There are HUGE consequences to society for imposing this propaganda-driven BS, and the establishment (govt, media and Mish) knows it’s a lie, just like they knew all of the Trump conspiring with Russia/Ukraine was total BS. Their self-interest is not only going to destroy the auto industry, but it will destroy our society.
If economics and personal choice change the way we get from one place to another, that’s perfectly acceptable. However, just as the gloBull warming propaganda was used to justify uneconomical alternatives to carbon-based fuels (when CO2 is 3-4% of our atmosphere), Govt and the billionaire nut jobs (i.e. Gates, Soros, etc.) are ramming their socialist green agenda down our throat by force using the age-old tactic of fear. This will not end well, because there are many millions of us who are not scared or ignorant (and I would say most are strong supporters of the 2nd Amendment & 10th Commandment).
Riddle me this…
Why can’t 3M provide forced air haz-mat suit to all at risk population of America?
Yet 50 years ago man supposedly walked on the moon.
Discuss
Insurance companies put premiums into a pool called float. Float is money for losses not realized yet. This float is invested in bonds and super safe funds to lower premium cost.
The reality is the huge drop in interest rates will raise insurance cost more than the lower risk from few miles.
ZIRP makes everything more expensive so if you expect your premiums to go down guess again. They are going up.
Future Headline: Mysterious increase in monogamy – Experts baffled.
More like polygamy. I am getting tired of my wife and it’s cheaper just to add another rather than get rid of her. Already got one picked out.
10% more wildlife not killed by motor vehicles.
It’s not just the businesses you mentioned that will be affected by a big shift to work at home. What about Menswear and Womenswear? If they aren’t going to work, do they need as many suits, etc? And the cleaners that clean those clothes? What about all the lunch spots? Then there are the coffee shops, and bagels/muffins. Lot’s of other shops that cater to workers shopping during lunch will also be affected.
You could go on and on. Few mechanics, tires, oil, windshield wipers, toll bridges, gas station revenue, mall spending, bank use, office supplies, copiers, IT techs, and on and on.
The trickle down is doing to be massive.
And yet the,markets are chugging along saying “no worries, mon”
But, there are also businesses that are unaffected, and businesses that benefit. Amazon is an obvious one that benefits. Same for residential toilet paper makers, but there are many others. When you look at just the index, it obscures the fact that there are some huge sector shifts going on.
At over 2.5 trillion you could still drive to Alpha Centauri in under ten years, just needs some infrastructure.
based on observations with my own eyes, the bar chart presented is a lot of hooie..
Do you expect a bigger or smaller drop?
Who needs an office when you have a 1Gbps connection from home.
There’s an article out there somewhere, and I can’t find it to post a link, anyway, Chicago businesses are thinking that employees need only report to meetings once every week or two… which to employees, translates to, “Thank you Jesus, I can move out of Illinois and just commute to the meeting once in a while”. You can bet your bottom dollar that Illinois will find a way to make up for any tax losses.
You need to be watched by your manager. So you need to be in office to make that easier.
No one is in the office. What universe are you living in ?
Add in a move to the suburbs, decline of the city core, reduced public transportation, impact on property taxes and tax revenues generally; and car mileage is the least of the problems.
And the winner is: ‘lifestyle’ environments like Utah….
Suburban home prices may increase though, as folks flee from city population concentrations.
They will, but the drop in city home prices will more than offset the rise in suburban home prices.
Seems as 10% slump in mileage – approx. I’m surprised such a modest change.
So Tesla will become the most valuable company in the world soon?
Say it ain’t so Mish. Supposedly tents are going up again at the company’s Fremont location.
And they are shutting down production to do it. Yeah right.
They taking a covid break.
Just think how many miles of driving will disappear from people not working at all (at home or at work).
Love online shopping and would love to be able to work from home.
Insurance companies will take losses as well.
Expect highway expansion plans to be abandoned.
High speed rail is toast.
The way it was in February will not return in our lifetime.
Also, highway maintenance is gonna suck for the foreseeable future.
Mish you forgot gas prices will go up because they will have to raise gas taxes to make up for lost revenue.
Soon, schools will be promoting smoking so as to make up for declining revenue from property tax reassessments.
Yeah right. They’ll just increase property taxes. These jackasses are one of the few groups that can keep what they have at your expense and will do everything they can to do so all in the name of children and overpriced services.
Taxes (state and federal combined) average about $.50 per gallon, less than a quarter of the present average price of $2.20
This is why we need a crash effort to replace human workers with robots. They will be a much cheaper solution long-term.
If the coronavirus is really airborne, we might be fighting it the wrong way
Airborne transmission would mean there are certain solutions we really need to focus on. https://www.technologyreview.com/2020/07/11/1005087/coronavirus-airborne-fighting-wrong-way
It is especially interesting that despite the trillions of dollars of damage globally, we still have no firm grip on the relative weight of different transmission vectors. There is still scepticism about asymptomatic spread as well as aerosol transmission. Apparently it is very hard to determine how much weight must be assigned to various vectors.
The efficacy of masks is hotly disputed by scientists and public health institutions. For aerosols, their efficacy is even less.
What has gotten very little attention is the fact that virions have been detected in sewage water weeks before outbreaks. Fecal shedding can occur up to 8 weeks into recovery. Fact is that respiratory diseases wax and wane like clockwork with the seasons because the absolute humidity increases with temperature and this decreases the chance of transmission (water particles collide, coalesce, and drop). Covid is not following the seasonal pattern and the fecal/oral route is probably vastly underestimated.
I have been addressing it as an airborne ever since the Diamond Princess, where it spread freely even when there was no physical contact. The most likely explanation was airborne. As a result I installed UV-C in March, and well as HEPA and MERV filtration.
And you stay in your house and don’t go out anywhere?
The UV-C I installed was at my business, in the customer service area. It’s impossible to prove that the UV-C has improved safety, but because no one has been infected there yet, I have no proof that it was ineffective, either. Yes, I spend most of my time at home or at work.
What does this have to do with the posted article?
What does this have to do wih the posted story?
Morning traffic is half of what it used to be. Afternoon traffic is almost what it was pre-Covid.