How Many Times Can Silicon Valley Be Wrong About Cars?

Is the car really disappearing, or is the high tech sector selling another story?

byEdward Niedermeyer|
Car Tech photo

Having enjoyed more than a hundred years of dominance over mobility and development, cars have undoubtedly lost a lot of their cool in recent decades. In fact, the car's world-changing appeal was already starting to wear off as early as  1958 when John Keats wrote in The Insolent Chariots that "once upon a time, the American met the Automobile and fell in love. Unfortunately, this led him into matrimony, and so he did not live happily ever after." Sure enough, the intervening 60 years have been punctuated by regular ventings of dissatisfaction with our mobility mate and predictions that our marriage to automobility would end sooner rather than later.

The latest such rumbling comes from no less than the dean of high-tech journalism, Kara Swisher, who predicts in the New York Times opinion page that "Owning a Car Will Soon Be as Quaint as Owning a Horse." Proclaiming that her turbocharged, manual transmission Ford Fiesta (a commendable choice!) will be her last car, Swisher insists that her decision to go car-free locates her "at the front end of one of the next major secular trends in tech." She compares this automotive sacrifice to giving up her land line in 1998, when she predicted everyone else would follow suit and was proven right. 

Every generation has its own ideological reason for predicting the end of cars, and in 2019 it's entirely fitting that the ideology of technological progress should be marshalled to take the place of environmentalism, anticapitalism, urbanism and all the other ideologies that supported the Peak Car prediction in their bygone heydays. After all, what stronger ideology is there in these faithless times than the one that Swisher so succinctly summarizes as "everything that can be digitized will be digitized"? The recent revolutions in information and communication technology have so fundamentally changed our lives in such a short amount of time, that Swisher's creed doesn't even seem to require faith any longer. Like all the best and most effective ideologies, this belief in the inevitable digitization of everything presents as a dispassionately rational conclusion based on all the available evidence rather than the article of faith it actually is.

Indeed, Swisher is so convinced that the decline of automobile is at hand that she doesn't seem to need any actual evidence of this "secular trend." The central factual claim in the piece—"Private car ownership declined globally last year, and it is a trend that I believe is going to accelerate faster than people think"—is supported only by a link to the recent BusinessWeek cover story by Keith Naughton and David Welch, which never presents evidence that private car ownership is actually declining. Nor do Naughton and Welch, two experienced auto industry journalists, claim that "Peak Car" is anything more than a "possibility" made more likely by a trend toward urbanization, the rise of smartphone-enabled on-demand mobility, worsening traffic and swelling car prices. 

The closest thing to evidence that "private car ownership declined globally last year" in the piece Swisher cites is the fact that global new car sales fell by about one percent last year, with 94.2 million vehicles sold. That's a modest slowdown after years of annual growth in the three to four million unit range, and not even close to evidence of the decline in actual vehicle ownership that Swisher claims is already underway. Slowing sales could possibly reflect a high-water mark for the global auto industry, but even that doesn't prove that growing numbers of people are choosing to give up car ownership.

Meanwhile, this decline in car sales looks a lot more like economic cyclicality than the "digitization" of car ownership that Swisher sees. After years of driving the bulk of global auto industry sales growth, China has stumbled into a slowdown that has hit the overheated auto sector especially hard. But the same downturn has also slammed the high-tech companies who are supposed to be replacing car ownership: bike sharing companies Ofo and Mobike and ride-hailing giants Didi and Yidao are all facing cash crunches and layoffs as regulators move in to protect consumer rights. To the extent that there is any visibility inside these companies, losses appear to be running into the billions and torrid growth claims have proven to be wildly exaggerated.

Here in the US, growth at the major ride-hailing companies is slowing even as they try to maintain that growth by subsidizing rides to the tune of billions in annual losses. With IPOs looming, both Uber and Lyft are trying to compensate drivers with stock in hopes of improving their unsustainable unit economics, showing how hard it will be to maintain low prices and high growth as public companies. Meanwhile ride-hailing is helping automakers sell sedans, increasing traffic in the cities where it operates, and competing with public transit more than car ownership. In the American cities where Uber and Lyft are used the most, private car ownership has actually grown.

I bring this up not because I love cars and hate Kara Swisher, but because I have extremely mixed feelings about cars and enormous respect for Swisher's inspiring accomplishments as a journalist. I applaud her decision to give up car ownership, I can relate to her personal reasons for doing so and I'm curious to see how it plays out. What's troubling about her piece is seeing the most famous tech sector watchdog presenting Silicon Valley ideology as insight, without regard for the actual data or evidence. 

Given the profound struggles that high tech companies continue to face in the mobility arena, whether with auto manufacturing, autonomous vehicles, or shared scooters, the need for less triumphalist ideology and more hard questions is clear. The high tech sector certainly has a lot to contribute to mobility, but the arrogance that has characterized its initial forays into the space has already done it more harm than good. If Silicon Valley wants to avoid being dragged down by its own self-congratulatory myopia the way Detroit was, it needs people like Kara Swisher to be as tough-minded and grounded in reality as we know she can be.