car sharing economy concept

A conservative think tank, The Institute for Policy Innovation, is in the midst of a low-key editorial propaganda campaign across the US to fight new fuel economy rules that will drastically reduce fuel consumption of modern vehicles.

The Obama Administration has mandated an average fuel economy of 54.5 mpg in each automaker’s lineup of cars, light trucks and SUVs by 2025, dubbed CAFE ( Corporate Average Fuel Economy) — a policy that has right-wing policymakers pestering Congress to search for a work-around to the regulations.

Merrill Matthews of The Institute for Policy Innovation thinks that a more efficient gas tank, and the resulting costs, however, are awful news for consumers. (Don’t let the name of the ALEC-related think tank fool you, though. ) Based out of Lewisville, Texas and founded in 1987 by Congressman Dick Armey to “research, develop and promote innovative and non-partisan solutions to today’s public policy problems,” there is little innovation to the think tank itself. In fact, the editorials the think tank is putting out into newspapers completely ignore the sharing economy of app-based riding sharing services – a billion dollar industry worldwide.

Merrill Matthews, a “scholar” who writes opinion pieces for the Institute for Policy Innovation, a public policy think tank based in Irving, Texas, cares a lot about the future of car ownership, of course. First of all, he’s worried that if cars are too fuel efficient, too many people will pick up and start driving them, he wrote to The Duluthe News Tribune and many other newspapers.

Identical “editorials” by Matthews have been printed at The Walworth County Gazette, The Daily Hamodia, The Arizona Daily Sun, South Coast Today, and others. Many of the editorials are titled to make it appear that the article was written in response to the newspaper’s survey, and each article has a different title. The content of the articles is identical.

“Suppose that car manufacturers are able to reach the 54.5 mpg goal — the prior CAFE standards set by Congress required 35 mpg by 2020 — a goal that is by no means certain. Doing so makes it cheaper to drive a car.

It’s basic economics: When the cost of driving a car declines, people will likely drive more rather than take public transportation, walk or telecommute. So much for the goal of significantly reducing oil consumption.”

Matthews says that the CAFE regulations go too far, and will cause a whole new generation of car customers to be “forced” to buy a fuel-efficient car, just like they were “forced” to buy Obamacare. (Somehow I had trouble finding the mandate in CAFE “forcing” most Americans to sign up to buy a car — and subsidizing cars for those of us who can’t afford the cost… But what do I know?):

“It’s an Obama Administration pattern: The government forces consumers to buy what it thinks people should have, even if it costs them more, not what consumers choose to buy with their own dollars. Can you say Obamacare?”

(The idea of car ownership becoming a luxury seems to be too foreign of a concept for right-wing policymakers to grasp — however, they surely were present when many of the younger generations were priced out of the car ownership economy.)

Matthews is also concerned that gas prices are falling too low. If gas prices fall, he says, more people will be driving:

“So while the new CAFE standards are unlikely to help the environment, they will certainly hurt consumers in upfront costs.

The Environmental Protection Agency concedes that the new standards will force consumers to pay about $1,800 more for a car.

The agency justifies the increased cost by boasting that consumers will save between $3,400 and $5,000 in gasoline over the life of the car. But those alleged savings will disappear if consumers drive more.

And speaking of saving money on gasoline, the recent dramatic fall in gasoline prices creates another problem for the administration’s goals: Cheaper gas means people will drive even more.”

Somewhere along the way, Matthews missed the memo: Skyrocketing gas prices, and high maintenance costs, and a desire to keep out of debt have shifted the idea of car ownership in many urban areas into a “sharing” economy – especially for the Millennial generation, who carries the lowest debt load in several generations. 

The sharing economy has become a way of life across the globe in just the space of a few years. Uber, one of the first (and most controversial) ride-sharing alternatives to taxicabs,  was recently valued at 41 billion dollars. The service boasts about a million rides in the US every week.

Zipcar, a car-sharing service that allows users reserve the vehicle of their choice for hours at a time, provides over 850,000 members access to more than 10,000 vehicles in urban areas, on college campuses, and at airports across the United States.

50% of Millennials surveyed by Zipcar say they would drive less if other transportation options, like public transit and car sharing, were available in their area. The cost of insurance, oil changes and other maintenance/repairs  — and even gas  — is included in Zipcar fees. Members of the service have reported saving up to $6000 on car costs every month.

Competing rideshare service Lyft has expanded from 15 to almost 65 cities in 12 months. Lyft president John Zimmer told Fast before the holidays that his company has seen five-fold growth in both revenue and riders since the beginning of 2014.

The sharing economy is special-made by and for Millennials, a group that seems to, more often than not, baffle the conservative policy arena, especially when it comes to think tanks that are shilling for dirty industry and the flailing automotive industry.

The same survey commissioned by Zipcar found that the Millennial generation is much less materialistic than their parents. Six in ten Millennials say that “experiences” are more important to them than “material possessions.” In other words, they’ve learned to live without certain things.  In today’s economy, it can be difficult to own a car because of the high cost of gas, parking and maintenance – leaving 53% of Millennials saying that the cost of car ownership is too high. So they’ve found a work-around in car and ride-sharing services.

At the same time, 39% of Millenials aged 18-34 say they have purposefully cut down on driving to soften their environmental impact. So it’s safe to say that the sharing economy is not only not going way — it’s set to boom.

More people are sharing cars, sharing the burden of ownership and replacing it by using their money to support companies with shared values.

In fact, Uber and other car-sharing applications have finally been approved to operate in the Institute for Policy Research’s own home town, Dallas, after grappling with regulatory problems over the past year. “Competition, my God, it’s the capitalist system,” said Berhane Alemayoh, who represented some limo owners and independent taxi drivers who helped craft the regulations governing the servies. “We don’t say, ‘No Lyft.’ We don’t say, ‘No Uber.’ We want them to compete, but may the best survive.”

The same may end up being true for big oil and the car manufacturing industry.

Too bad their “think tanks” are too busy “thinking” about how to manipulate the masses, rather than innovate within the industry.

  • cynthia curran

    Yeah, but Uber and Lyft tell there drivers that they well make 25 per hour is more like 12 to 16 because they are using their own car. Its a taxi service where the drivers are getting ripe off and there has been rapes with uber not much of a background check onthe drivers.