Ride-sharing could lead to increase in auto sales, analysts say

Ride-sharing could lead to increase in auto sales, analysts say

Much has been written about the potential for a downturn in auto sales that could result from wider use of ride-sharing services such as Uber and Lyft. The thinking is that fewer people would bother to buy their own cars when they could use a ride-sharing service for on-demand mobility.

But analysts at Deutsche Bank AG see the opposite scenario. The cars used by ride-sharing services are likely to have a shorter life because of the demands put on them. If those cars turn over every three years, they would have a shorter life cycle and sales would need to rise to meet demand.

–Each on-demand vehicle will travel more miles (10 to 20 percent more) than the cumulative six to nine privately owned vehicles that it replaces,” wrote the analysts. Sales volumes would be driven by miles traveled rather than by credit availability and the state of the economy.