When ridesharing becomes our only choice
Picture this: it’s a gorgeous, sunny, fall Saturday. You’ve got a barbeque with friends and family 25 minutes down the road. It’s perfect driving weather. You grab your potato salad and keys, throw on your sunglasses and head out the front door and into your driveway.
Then you stand there and wait for a Honda Civic.
You haven’t owned or leased a car in 10 years, and your license expired half a decade ago. You’ve replaced turning on the ignition with glancing back and forth from the street to your Uber app.
Does this sound like you? If not, could it soon be? With the near-record-high cost of vehicles, which remain steady despite recent drops in interest rates, coupled with rapidly rising insurance costs, more people are turning to on-demand ride sharing options.
With Canadians’ cost of living increasing 40% between 2021 and 2024, remaining disposable income may not be enough to splurge on a personal vehicle. Want to finance? How’s a rate of 7.49% sound?
These factors all make us wonder; will things continue this way? More and more, these conditions are causing predictions of a drastic drop in personal car ownership over the years to come (though just as many, if not more, cars on the road), with some studies saying that by 2030, 95% of miles travelled will be in self-driving, shared vehicles.
As we know, studies predicting how the world will look in a decade have a high chance of being unreliable, but the structural changes are hard to ignore. As autonomous driving continues to advance (Uber and Waymo are expanding their partnership to more cities and Tesla recently unveiled their purpose-built Robotaxi and Robovan), it sure looks like we’re headed for a future where we simply call a driverless car to pick us up and drop us off, before it heads off to its next passenger.
CEOs within this space say self-driving cars will drastically drop ride prices in the long term, making even more financial sense; perhaps with an ultimate cost that’s “less per mile than a bus ticket.”
"Given how successful tests of self-driving cars have already been and just how quickly we are seeing AI applied to various types of operational technology, it doesn't feel like a stretch to imagine that in nine or 10 years, it may seem very odd that we ever trusted people to drive cars," says Ron Cirillo, SVP, Platform Engineering, AI and Advanced Analytics, OMERS. Ron joined OMERS in 2024 after serving as Oxford Properties’ Head of Technology, and has held a number of leadership roles across all areas of enterprise technology in the financial information services sector throughout his career.
It’s a numbers game
Even today, the numbers make sense for many. If you live in a busy area and drive less than 16,000 kilometres per year, rideshare services tend to be cheaper. For those who live and work in a busy city, parking costs get added to the equation. And as more and more make the choice to become full-time ride sharers, additional options are likely to become available, further driving down costs.
While this obviously won’t be the case for everyone (families transporting multiple kids to sporting events loaded with equipment are just one such example), we could soon find ourselves in a world with fewer parking lots and more vehicles whizzing by with the only occupant watching a movie or even sleeping.
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The Relatable Economist is an ongoing written series focused on how the economy, geopolitics, markets and more are impacting our day-to-day lives, discussing topics that matter to you, even if just to share with your friends at your next get-together or in the stands at your child’s or grandchild’s soccer game. Have a topic you want to learn more about? Write to us at therelatableeconomist@omers.com.