LAS VEGAS —  The disruptive impact that ride-hailing companies are having on auto finance is evident with the success of Uber and Lyft. While both companies are not profitable, Uber ‘s revenue surged 43% to $11.3 billion in 2018 and Lyft’s revenue doubled to $2.2 billion.

However, the question confronting auto finance is whether ride-hailing will ever eliminate a consumer’s need to own a vehicle.

Executives from GM Financial, Mitsubishi UFJ Financial Group (MUFG), Kroll Bond Rating Agency, and Avis Budget Group Inc. wrestled with this question during a panel discussion at SFIG Vegas 2019.

“We’ve seen a lot of growth in this area,” said GM Financial’s Senior Vice President of Corporate Finance Sheli Fitzgerald. “[Ride-hailing] seems to be taking over mass transit, taxis, or subway rides,” she said. “Expanding beyond that is going to be challenging,” she added, noting the cost per ride for ride-hailing is “still pretty high at this point.”

As a result, the likelihood of ride-hailing options taking over traditional car ownership are slim, Fitzgerald said. “I think it’s a while, maybe never, before it happens 100% across the country, but certainly [there will be] some additional adoption as prices come down,” she said.

Beyond economic challenges with ride-hailing, some consumers just don’t want to get rid of their cars, said Ann Tran, managing director at MUFG. “[There are] car geeks who love cars and can’t help that,” she said.

Tran, though, said car ownership could become more expensive. In a world where car ownership becomes less common — thanks to the rise of ride-hailing replacing the need for ownership —  insurance companies may see personally-owned cars as more of a risk, prompting a hike in the price of insurance.

“Insurance companies might see it as more of a risk to have individuals owning cars,” Tran said. However, “to wipe out car ownership entirely is not going to necessarily happen,” she added.

Rosemary Kelley of Kroll Bond Rating Agency said the takeover of ride-hailing depends on how the vehicle is being used, adding that convenience and freedom are two benefits car ownership offers that ride-hailing does not. “I think it may reduce [car ownership] in some areas…it might be that people say the household needs one vehicle as opposed to two vehicles,” Kelley said. “It’s going to be an evolution over time.”

Avis Budget Group Inc.’s Assistant Treasurer Alan Koines said geography and demographics are two critical factors to highlight. “Certainly there are instances in America where ride-hailing just doesn’t work,” Koines said. “Some towns are 50 miles apart out in the Midwest.” However, in cities and urban areas, ride-hailing is “an extremely efficient and attractive option,” he added.

As for demographics, millennials and younger people coming out of college will enhance the success of ride-hailing, Koines said. With other mobility services, including city bikes, scooters, and rental cars, gaining traction, “[millennials are] going to be very disincentivized to buy their second car or even their first car,” he said.

Additional mobility services, Koins said, present an opportunity to those in the industry. “People who don’t own cars are going to have to use these services on a daily or weekly basis and that’s an opportunity for us,” Koines said.