“Young Americans Lead Trend to Less Driving.” That was the headline of a May 13th article in the New York Times, reporting on the publication of a report called “A New Direction: Our Changing Relationship with Driving and the Implications for America’s Future.” The report, produced by the anti-highway, anti public-private partnership (P3) organization called Public Interest Research Group (PIRG) cites data on recent trends in vehicle miles of travel (VMT) to argue that America has probably passed an all-time peak in VMT per capita and that future decades will see markedly slower growth in overall driving, despite continued population growth.
The Times report, which included skeptical comments from Ken Orski and me, was generally favorable to PIRG’s thesis that today’s teenagers and young adults-the Millennial generation-aren’t driving as much as their predecessors. And that this may be the leading edge of a trend that will throw traditional transportation planning into a cocked hat.
This debate matters a great deal, since state DOTs, road builders, and companies signing long-term highway P3 concession deals all rely on forecasts of VMT. If those forecasts are seriously flawed, the implications for future traffic congestion, highway and bridge reconstruction needs, and toll revenues will all have to be rethought. And which party will bear traffic and revenue risk-taxpayers or investors-will be even more important if the risk of much lower VMT is very real.
The PIRG report first presents historical data on VMT and VMT per capita from 1946 through 2012. There’s nothing new here, since it is widely recognized that each decade from the 1950s through the 2000s saw a lower VMT growth rate than the decade before. Less well known is that VMT per capita has actually decreased by an average of 1% per year between 2004 and 2012. How much of this decline is due to the Great Recession and how much to a more fundamental change is unclear-except to PIRG, whose analysts portray it as a leading indicator of reduced driving by the younger generation, especially the Millennials (chapter title: “What Comes Next? How the Millennials Will Determine the Future of Transportation”).
The money shot of the report is PIRG’s three scenarios of the future. “Back to the Future” assumes the slightly reduced VMT per capita trend is reversed by 2020 and that driving among each age group then resumes at those levels through 2040. “Enduring Shift” assumes that Millennials will keep their lower driving rate as they age, and that this shift will be adopted by successor generations. This dramatically reduces overall driving through 2040. And “Ongoing Decline” spins out a fantasy scenario in which an even broader anti-driving shift is adopted. In each case, the resulting numbers are a mathematical exercise, driven by the driving assumptions and current Census forecasts for the various age groups. Under Back to the Future, total VMT in 2040 would be 24% higher than today; under Enduring Shift it would be just 7% higher, and under Ongoing Decline it would be 19% less than today. Even Back to the Future projects dramatically lower 2040 VMT than the US DOT, the US Energy Information Administration, and the 2009 Infrastructure Financing Commission.
Since the PIRG projections depend critically on the thesis that younger people are losing interest in driving, it behooves us to take a more careful look at the evidence for this proposition. In a recent presentation in Washington, DC, commuting expert Alan Pisarski dug into the data. The fraction of people ages 15-24 soared from 19% in 1960 (when the Baby Boomers began learning to drive) to a peak of 27% around 1980, but has declined since then to around 21%. Young people have much lower incomes than people with careers, and minorities (more likely to be low-income and to have unemployment in their family) are 34% of this age group (compared with 31% of 35-44 year olds). A lot more young adults are living at home today than in 1960, so they are likely to have a driver in the household.
A critically important change over the past two decades is the advent of “Graduated Licensing” in nearly all states. Instead of being able to get a license at age 16, a young person typically must progress from learner to intermediate to full driving privileges. And 49 states ban night driving during the intermediate stage; 45 of those states restrict carrying passengers during that stage. Moreover, driver-education is rare in high schools these days, so those who seek it must pay market rates for it. In addition, car insurance rates increased by 30% overall from 2000 to 2010, and adding a young male to a family’s insurance policy can cause the rate to double.
Also critically important is youth unemployment. In April 2001, unemployment for those aged 16-19 was 13.3%; in April 2012 it was 24.6%. And a February 2010 Pew Center study found 37% of young respondents either out of work or underemployed, the highest rate in three decades of surveying. Figures from the National Highway Transportation Survey find that annual miles driven per person age 16-24 differed considerably by employment status: employed males in that age group drove about 12,000 miles in 2009 versus about 6,000 miles for unemployed males.
The Economist has also weighed in on this issue. Just five months after having published a three-page article on “peak cars,” the magazine’s April 20, 2013 issue carried a 16-page Special Report on cars, taking a far more skeptical view. It cites the increased cost of car insurance and the absence of free driver-ed in school (in addition to the Great Recession) as factors that have reduced young people’s driving. But it also notes that people in their 60s (the Baby Boomers) are driving more than people that age used to: “What may be happening in rich countries is a one-off shift in the timing of people’s driving careers, so that they start later but then continue well into old age.” Hence, “It is not clear that declining car ownership among young urbanites will have more than a marginal effect on overall car sales.”
Finally, technology-including steps toward greater vehicle automation-will also affect driving trends. “In the rich world, some of the economic factors that have deterred young people from taking up driving will fade away; as cars become increasingly self-piloting and accident rates fall, insurance rates should decrease, and in time there will be little or no need to take expensive lessons.” Thus, “peak car,” The Economist, now concludes, “still seems quite a long way off.”
While PIRG’s vision of an America with considerably less driving 30 years from now is poorly supported, the organization has done a service by raising challenges to conventional VMT forecasting. Everyone doing or using long-range VMT projections needs to be aware of these factors and take them into account in stress-testing their traffic and revenue projections.
Robert Poole is director of transportation studies at Reason Foundation. This column first appeared in Public Works Financing.