America's Generation Y Not Driven to Drive

* A former rite of passage becomes a chore for some

* Slack economy, environmental concerns help push a trend

By Deborah Zabarenko

WASHINGTON, July 1 (Reuters) - To Shoshana Gurian-Sherman, driving seemed like a huge hassle.

"Part of it was laziness," the 23-year-old Minneapolis resident recalled. "I didn't really want to put in the effort to learn how to drive ... I knew how to ride the buses, so it was not necessary.

"And the other thing was, it was just scary, the idea of being in charge of a vehicle that potentially could kill me or other people," Gurian-Sherman said.

She eventually got her license at 18, two years later than she could have, after her parents threatened not to pay for college if she did not learn to drive, a skill they considered to be important.

In her reluctance to drive or own a car, Gurian-Sherman is typical of a certain segment of Generation Y, the coveted marketing demographic encompassing the 80 million U.S. residents between the ages of 16 and 34.

Bigger than the post-World War Two baby-boom generation but without the middle-class expansion that drove the earlier group's consumer habits, Generation Y includes an increasing number of people for whom driving is less an American rite of passage than an unnecessary chore.

"That moment of realizing that you're a grown-up - for my generation, that was when you got your driver's license or car," said Tony Dudzik, a senior policy analyst of the Frontier Group, a California-based think tank that has studied this phenomenon. "For young people now, that moment comes when you get your first cellphone."

U.S. residents started driving less around the turn of the 21st century, and young people have propelled this trend, according to the federal government's National Household Travel Survey.

From 2001 to 2009, the average annual number of vehicle-miles traveled by people ages 16-34 dropped 23 percent, from 10,300 to 7,900, the survey found. Gen Y-ers, also known as Millennials, tend to ride bicycles, take public transit and rely on virtual media.

More than a quarter of Millennials - 26 percent - lacked a driver's license in 2010, up 5 percentage points from 2000, the Federal Highway Administration reported.

THE HIGH COST OF DRIVING

At the same time, older people are driving more, researchers at the University of Michigan found. In 2008, those age 70 and older made up the largest group of drivers on the road, more than 10 percent, which was slightly higher than those in their 40s or 50s.

The Michigan researchers offered a few reasons why some younger drivers hesitate to get behind the wheel: the high cost of owning, fueling and maintaining a car and the convenience of electronic communication.

The Frontier Group's Dudzik suggested a related cause: computer and smartphone applications that make taking public transportation easier, with minute-by-minute tracking of buses and trains and simple online maps and travel directions.

Whether Gen Y-ers will eventually drive more than they do now will affect transportation infrastructure costs, Dudzik said.

Bikes and car-sharing services make it easier to avoid the expense of owning a fossil-fueled vehicle. Environmental concerns are another reason, said David Jacobs of the Tombras Group, a marketing firm based in Knoxville, Tennessee.

"It's not the main reason, but it is a compelling reason," Jacobs said.

More central is the group's general anxiety over finances and the economy, he said.

"They're shouldering higher mortgage costs, rent; their insurance costs are higher than previous generation's," Jacobs said. "And all that's happening after a couple of recessions, so they've really never, as young adults, seen a very healthy, stable economy. They're worried about a lot of things."

To sell cars or anything else to Generation Y, he said, "you have to talk to them at their level and make them interested and show them you are a valuable, reputable company with a quality product and you do care about the environment, the economy."

That fits with Gurian-Sherman's thoughts on the environment in her decision not to own a car: "I don't know if I consider myself an environmentalist, but I care about the impact that I have." (Reporting by Deborah Zabarenko, Environment Correspondent; Editing by Lisa Von Ahn)