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Does Transportation as a Service Spell the End of the Family Car?

By Danny Vena and Jason Hall - Feb 19, 2021 at 1:00PM

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Will self-driving and autonomous vehicles soon account for the majority of cars on the road?

There's little doubt that personal conveyance is changing. The gradual emergence of self-driving cars courtesy of Tesla (TSLA 4.53%) and Alphabet's (GOOGL 5.11%) (GOOG 5.20%) Waymo and the growing adoption of ride-sharing services like Uber Technologies (UBER 2.95%) and Lyft (LYFT 2.90%) add to the mounting evidence that we might only be a generation away from something many believed was unthinkable just a few years ago: The family car might soon be a thing of the past.

On this clip from Motley Fool Live, recorded on Feb. 8, "The Wrap" host Jason Hall, Fool analyst Auri Hughes, and contributor Danny Vena discuss the changing transportation landscape.

Jason Hall: Get Real's question here. "Ran across acronym TaaS, Transportation as a Service, did a bit of research." This is the bottom line. This is transportation as a service. Tesla, General Motors (GM 5.55%) with their way thing, Lyft, Uber, Alphabet, NIO (NIO 4.47%). The list goes on and on. This is the future.

I was actually, you know what? I did. I skipped this one. I skipped this one in pointless prognostication, guys. Let's do this one here because this ties right to it. Speaking of Tesla, the future prospects of that company are tied autonomous fleets. Here's what I want to do. Here's the prognostication that I want to do.

Let's just stay in America. Something like 91% of American of driver age either own or have access to a family-owned car. What year will fleet-owned autonomous cars outnumber family owned automobiles in the U.S.? We got to reach out here, guys. We got to reach on this one. Who wants to go first? I'm going to let you guys pick. You know what? I'm going to go first. I'll go first, 2050. I'm going to say 2050. Twenty-nine years from now.

Auri Hughes: That was my guess, 2050.

Hall: Okay. Go with it, 2050. [LAUGHTER]

Hughes: It was exactly my guess. [LAUGHTER]

Hall: Danny?

Danny Vena: I think probably a decade from now, I think we're going to have a much larger proliferation of self-driving cars on the roads. I think we're still going through the early stages, the developmental stages. I think we're going to see a lot more on the roads in a decade. I think probably 20 or 30 years from now is probably a good range of time. But I don't know if they're going to outnumber the family-owned car.

I think it's going to be when the younger generation is in their prime earning years that that's going to happen. Primarily because right now, it's the millennials and the Gen Xers that are driving adoption of Uber and Lyft and accelerating it. Once you get all us old fogies off of the road with our personally owned vehicles, then I think you'll see that that flop happen, that change.

Hall: It's going to take a long time. Cars just last a lot longer now than they ever have. I think the average American car is like 12 or 13 years old. I have a 2004 Ford F150 with 190,000 miles on it that I might get buried in. [LAUGHTER] It's going to take a long time. I think that's the big takeaway for me.

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Stocks Mentioned

Tesla, Inc. Stock Quote
Tesla, Inc.
$737.12 (4.53%) $31.91
Alphabet Inc. Stock Quote
Alphabet Inc.
$2,359.50 (5.11%) $114.66
General Motors Company Stock Quote
General Motors Company
$34.82 (5.55%) $1.83
Alphabet Inc. Stock Quote
Alphabet Inc.
$2,370.76 (5.20%) $117.07
Uber Technologies, Inc. Stock Quote
Uber Technologies, Inc.
$23.03 (2.95%) $0.66
Nio Inc. Stock Quote
Nio Inc.
$24.08 (4.47%) $1.03
Lyft, Inc. Stock Quote
Lyft, Inc.
$16.34 (2.90%) $0.46

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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