Brief:

• Toyota, the biggest carmaker in the world by unit sales, partnered with its Hawaiian distributor Servco to test a car-sharing technology. Servco plans to launch a Honolulu-based car-share business by the end of 2017, according to a statement.

• The car-sharing mobile application includes a Smart Key Box (SKB) that lets users lock and unlock vehicles with a smartphone. The carmaker developed the technology, which is managed by its Toyota Connected North America strategy group.

• The Honolulu test follows Toyota’s pilot program with startup Getaround to test a car-sharing service in San Francisco. The carmaker plans to work with more dealers and distributors to refine its technology for particular regions.

Insight:

Toyota is among the carmakers that recognize people’s driving habits are changing even after a year of record-breaking vehicle sales in the U.S. The worry is that those sales records were juiced with a litany of incentives, including very favorable car loans to people with subprime credit ratings. Deliquency rates, or nonpayment of 90 days or more, on car loans rose to 3.92% in Q2 2017 from 3.46% a year earlier, according to a survey from the New York Fed.

Car culture is waning in America with younger generations like millennials showing less interest in car ownership and driving. The share of young people, ages 16 to 24, with a driver’s license dropped from 76% in 2000 to 71% in 2013, according to consulting firm McKinsey. The U.S. Census Bureau found that 9.1% of households didn’t have a car in 2015, compared with 8.9% in 2010, a difference that represents about 500,000 households.

Meanwhile, General Motors has a car-sharing service for gig-economy workers called Maven Gig that started this week in Los Angeles. Ford is rolling out its Chariot van-sharing service this month in New York with plans to have 60 vehicles operating by the fall.

Toyota last year invested in ride-hailing pioneer Uber, and in startup Getaround, whose mobile application lets people search for a nearby vehicle to rent. Getaround has about 500,000 users and is available in 13 U.S. cities, according to its website. As Toyota’s latest test in Hawaii shows, the company is taking steps to embrace the changing car market.