This is the future of car sharing
And automakers should be terrified
When Evgeny Barkov owned a car, the 31-year-old software salesman would often look out of his Moscow window at it with disgust. His possession sat unused more than 90 per cent of time, while sucking up money and causing him anxiety that it might break down.
He finally took out a calculator, added up the costs and determined he was better off selling his Peugeot and switching to car-sharing services like Yandex.Drive, which offers cars ranging from basic Kia models to flashy Porsches.
“That investment brought me nothing but trouble,” said Barkov as he wound through Moscow’s snowy streets in a white Skoda sedan with a bright yellow stripe on the side and Yandex’s software on the dashboard console. “Now, I’m just paying for using.”
The venture — set up last year by a local internet company — flooded the Russian capital with more than 7,000 cars to rent for as little as 5 rubles (10 cents) per minute, including fuel, maintenance and parking. That compares to 41 cents (U.S.) a minute for Daimler AG’s Car2Go in New York or 35 cents a minute in Montreal, and is an offer too good to pass up for a growing number of Muscovites.
Almost out of nowhere, car sharing in Moscow boomed, with the number of vehicles more than tripling last year. The city now has the biggest shared fleet in Europe and the second largest in the world. The rapid shift spells trouble for automakers by providing a blueprint for how a deep-pocketed technology player can move quickly to woo consumers with alternatives to car ownership.
“We’re approaching a point that could flip the entire car market on its head,” said Shwetha Surender, a London-based analyst with consultancy Frost & Sullivan. “Carmakers risk becoming mere suppliers to shared mobility services and losing direct relations with customers. That’s an unattractive proposition.”