Disappearing Drivers

Photo credit: Flickr/Mike K

In 2005 we hit peak car according to Popular Science. In that year, the average American drove over 10,000 miles. It's been all downhill from there as Americans are driving less miles each year. We're currently driving about as many miles per year as we did in the late 1990s. We had bumps in the road before, but this is the longest downward trend on miles driven on record.

At the same time, Americans own fewer cars per capita than they have since the dawn of the 21st century. The economic downturn hit the American wallet pretty hard and might have changed the mind-set of Americans. It's not the only thing that has hit the American wallet, as rising gas prices have shifted the mind-set of the American car buyer.

The evolving American car
No longer are we buying the cool car to conquer the open road. Instead, we're buying the most efficient car and trying to be strategic about how often we drive it in order to save money on gas. That has caused automakers to refocus.

That new focus is found front and center in how carmakers advertise these days. A look at Ford's (NYSE:F) homepage highlights that its cars are "MPG savvy and tech smart." The focus of each car is its EPA-estimated rating of 32 MPG or better on the highway. It doesn't stop there for Ford. The company offers an array of fuel efficient and eco-conscious vehicles. From those with an Eco boost engine to those with an all-electric motor, as well as several options in between, Ford is focused in on saving consumers money on getting from point A to point B.

The question that still remains to be answered is if Ford and others will ever be able to do enough to get Americans back to exploring the open road. The most fuel efficient options, an all-electric vehicle, is limited by range. Even Tesla's (NASDAQ:TSLA) Model S is limited by its range. Model S owners are still limited by the availability of Supercharger stations, which only provide a half charge even after 20 minutes. While the company does offer a quick battery replacement option, at this point Tesla hasn't advanced to the point where its owners can easily explore the open road.

The evolving American workforce
There are a range of other factors that are keeping more Americans off the road these days. Unemployment is still stubbornly high. Further, demographic trends have more Americans living closer to amenities than ever before.

Not only that, but the connectedness of our society is also causing the disappearance of the American driver. Telecommuting is on the rise. According to a recent study by Global Workplace Analytics, 3.3 million Americans work from home, or 2.6% of the total U.S. employee workforce. That number is expected to grow to 3.9 million by 2016, which is a 21% increase. This trend is taking a lot of cars off the road.

I'm a prime example of that. My wife and I both work from home. I went from spending more than an hour and a half on the road each day to maybe spending that much time on the road each week. We also went from two cars to one.

This is one trend that really could empty America's highways. It is estimated by Global Workplace Analytics that 64 million Americans hold a job that's compatible to at least part-time telework. If those that have compatible jobs and the desire to work from home did so just half of the time, the nation would save more than $700 billion per year. A typical business would save $11,000 per person each year while the average telecommuter would save up to $7,000 per year. Not only that, but we could reduce our oil imports from the Persian Gulf by 37% and reduce the greenhouse gas equivalent of taking the entire New York State workforce permanently off the road.

Final thoughts
America is undergoing a massive structural shift in our driving patterns. We are driving less, and, thanks to technology, we could see even more American drivers disappear as they begin to work from home. That's actually not a bad thing as it's good for the economy, the environment and our wallets.


Matt DiLallo has the following options: long January 2014 $10 calls on Ford and short January 2014 $10 puts on Ford. The Motley Fool recommends Ford and Tesla Motors. The Motley Fool owns shares of Ford and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.