The teenage dream of owning a car is dying by Mark Penn @FortuneMagazine July 22, 2015, 9:17 AM EDT E-mail Tweet Facebook Linkedin Share icons Detroit has seen a lot of changes through the years—the rise of Japanese manufacturing, the growth of SUVs and trucks replacing the station wagon, and now the birth of the electric car. But there is one change they probably were not expecting: that people would just stop driving. That’s right—what was once the dream of every teenager—getting a driver’s license—has fallen off dramatically in the last few decades. In 1983, nine in 10 19-year-olds had a license, but that number has now fallen to about two-thirds. The decline is even more severe among 17-year-olds. Just 30 years ago, nearly seven in 10 of those kids had a license; now that has dropped to less than half, 46%. And no license means no car. Not only are demographics changing so that there are fewer teenagers than ever before relative to the rest of us, fewer of them will be able to drive. On the good side, that should correspond to a significant decrease in teenage deaths from drunk driving, because they won’t even be driving. Why have teens dropped driving? According to a 2013 survey by the University of Michigan Transportation Institute, the No. 1 reason unlicensed 18- and 19-year-olds don’t have a license is “too busy or not enough time” (40%), followed by “owning and maintaining a vehicle is too expensive” (17%). The No. 3 reason is also notable: 15% say they are “able to get transportation from others.” What exactly are kids “too busy” with to get a license? It’s unlikely they are going to school or studying more, which suggests driving has just become a much lower priority because getting around doesn’t require a license anymore. First, mothers and fathers have become drivers. Today’s helicopter parents are only too willing to provide chauffeur service for kids who never leave the house alone until they are well into their teens. Second, smartphones mean other parents are more available for easy ride coordination, and of course the growth of services like Uber and Lyft lets kids call a car and charge it to their folks. The shift during this period from rural areas to the suburbs and cities also made driving less of a necessity and more of a luxury. Between 1980 and 2010, the rural population of America went from 26% to 19%, suggesting that many young people went from outlying areas to college and then to cities where cars are prohibitively expensive. In 2011, for the first time in almost a century, the rate of urban population growth outpaced suburban population growth. Millennials in particular are staying single longer and having smaller families, making urban living—with all its walking, busing, and bike-sharing—much more appealing. The distances kids needed to travel started shrinking. Automakers don’t seem to have panicked quite yet. They have been busy selling cars in China and selling a lot of new cars to women who entered the workforce and needed to commute. Still, one wonders why the Big Three have not been trying to make driver’s ed a mandatory course in high schools or funding the courses directly. Some effects of the drop in teen drivers have been quite beneficial: Between 1986 and 2012, teen motor vehicle deaths in the U.S. dropped from 36.8 to 12.9 per 100,000 teens. Similarly, young non-drivers have done their part to lower U.S. gas consumption and carbon emissions: Between 2001 and 2009, Americans aged 16 to 34 dropped their average annual driving miles by 23%, a greater decline than among any other age group. This was a cure for climate change no one even conceived of—just let people tire of driving and move closer together, and instead of more fuel-efficient cars, you wind up with more fuel-efficient people. The statistics show that there are some other things teens aren’t doing as much of anymore. Shortly after they started snubbing driver’s licenses, teen pregnancy rates dropped from 116.9 pregnancies per 1,000 girls in 1990 to 57.4 in 2010, the lowest rate ever reported. Similarly, the juvenile arrest rate started dropping in 1994 and hit a historic low in 2012. Perhaps there’s no relationship between these changes, but without a doubt, we are seeing a revolution in the teenage lifestyle. The percentage of teens with smartphones now exceeds the percentage with a license, and the smartphone—not the car—is the defining gadget of teenage life. It has ushered in an era of greater communication, greater sharing, less driving, less alcohol, less drugs (except maybe e-cigarettes), and more collaboration. It gives teens the ability to be together without driving across town, and to get across town without even taking a driver’s license test. A 2013 U.S. PIRG Education Fund report predicted that if the millennial-led decline in per-capita driving continues for another dozen years, total vehicle travel in the U.S. could remain well below its 2007 peak through at least 2040, despite a 21% increase in population. But the future remains unknown as tech companies experiment with driverless cars. This will be the first generation in a long time with a huge part of the population unable to drive themselves, and either this is going to set off a boom in adult driving schools as people have families and move to the suburbs, or it will fuel the growth of shared driverless cars and greater urban living out of necessity, and change the character and landscape of the country. Mark Penn is EVP and Chief Insights Officer at Microsoft. Previously, he served as worldwide CEO of Burson-Marsteller, CEO of Penn Schoen Berland, and White House pollster to President Bill Clinton; and he is the author of the bestselling book Microtrends: The Small Forces Behind Tomorrow’s Big Changes.