Survey Indicates That Uber May Be Encouraging Delay Of Car Purchases

Are ride-sharing companies having a detrimental effect on car sales?

Although auto sales in the U.S. for September came in at their highest monthly level since 2005, some Uber passengers said that they’re waiting to buy a car because of the ride-hailing app, according to a new survey conducting by consulting firm Frank N. Magid Associates. Of the 2,000 Uber users that participated in the study, 22 percent said that they were holding off on a car purchase because of the service.

Uber is like a “Mack truck just rolling down the street gaining speed,” said Mike Vorhaus, president of Magid Advisors, a unit of Frank N. Magid Associates. “So I do think we’re eventually going to see this in the numbers of auto sales. Uber is not only disrupting the taxi and limo industries, but potentially disrupting the entire car industry.”

For many years, Uber CEO Travis Kalanick has said the company’s true competitor isn’t taxis or Lyft, but is actually the auto industry. He would like to see ride-hailing replace car ownership, saying in February that the company’s intention “is to make Uber so efficient, cars so highly utilized that for most people it is cheaper than owning a car.”

Andrew Hare, Magid’s director of digital research and strategy, thinks the study results indicate Uber is making progress along these lines, and that the auto industry should be concerned.

“It’s rare that a brand transforms the way we live in such a short amount of time but that’s exactly what Uber has done,” Hare wrote in a statement. “As the company continues to grow, it is threatening to redefine traditional notions of transportation with innovations like UberX and UberPOOL. Even if only a modest number of consumers begin to prioritize car ‘sharing’ over ownership, the car industry is in trouble.”

While the study findings may be cause for some concern, it’s important to realize that Magid didn’t survey non-Uber users to find out what percentage are waiting to purchase a car, so there isn’t a benchmark to compare the data points. At the same time, since Uber users were specifically asked if they’re holding off on buying a car because of Uber, the results can still be considered significant.

Although Uber has been heralded by some as a big winner in the tech world, with its $51 billion valuation, leaked financial documents actually show that the company is far from profitable at this point.

Will the company succeed in its goal to significantly disrupt auto sales? Although there’s no way to guarantee the future, it appears that this has not yet occurred. “At this time, we have not seen any data to support the claim that increased use of Uber is negatively impacting U.S. auto sales,” said Stifel Nicolaus auto analyst James Albertine. “But as GM management mentioned at their Global Business Conference on Thursday, we agree that there are likely incremental opportunities for brands to connect with consumers that would otherwise not have been in the market for a vehicle.”