Here's a big heads up for all of Canada's petro-pols from Justin Trudeau on down.
A new report out of Stanford University predicts a permanent collapse in oil prices within four years.
The report points to a significant threat to Canada’s economy, dependent as it is on oil and auto manufacturing, but it also predicts “huge opportunities” for companies that jump into the new “transportation-as-a-service” industry.
“We are on the cusp of one of the fastest, deepest, most consequential disruptions of transportation in history,” begins the report from Tony Seba, a Silicon Valley entrepreneur and lecturer in entrepreneurship, disruption and clean energy at Stanford.
Using economic models based on existing technologies, the report predicts that ride-hailing services will be cheaper than owning a car by 2021.
By that time, ride-hailing will be “four to 10 times cheaper per mile than buying a new car and two to four times cheaper than operating an existing vehicle,” the report says.
What's bad news for the oil patch will be equally bad news for Ontario's auto industry.
Auto manufacturing will collapse by 70 per cent between 2020 and 2030, the report predicts. The number of cars in the U.S. will plummet from 247 million to 44 million in the same period.
“This could result in total disruption of the car value chain, with car dealers, maintenance and insurance companies suffering almost complete destruction.”
It will become next to impossible to sell a used fossil-fuel car, the report predicted.
I'm not convinced. We're culturally attached to our cars and the convenience they afford. While urban dwellers may make more use of ride-hailing services to save some bucks here and there, I'll bet most of us will still have a car in the garage for what the insurers call "pleasure use."
Also bear in mind that the burgeoning market for private automobiles today isn't in the developed world. It's coming from the emerging economic superpowers, places where owning one's own car has been a lifelong dream.