Shared cars to boost shar­ing econ­omy?

China Daily (Hong Kong) - - VIEWS - Chen Yanyan, dean of the Col­lege of Metropoli­tan Trans­porta­tion, Bei­jing Uni­ver­sity of Tech­nol­ogy

Car-shar­ing ser­vices are emerg­ing in cities such as Bei­jing. But is this a good so­lu­tion to the road con­ges­tion prob­lem? Four ex­perts share their views with China Daily’s Wu Zheyu. Ex­cerpts fol­low:

The car-shar­ing busi­ness will not help re­duce traf­fic jams. Those who say it would as­sume that the avail­abil­ity of shared ve­hi­cles will di­min­ish peo­ple’s urge to buy cars, which in turn will re­duce the num­ber of ve­hi­cles on the road. These peo­ple also ig­nore the fact that a ma­jor­ity of those us­ing car-shar­ing ser­vices to­day were ear­lier us­ing pub­lic trans­port to commute. Which means the num­ber of ve­hi­cles on the road has not re­duced.

The car-shar­ing ser­vice there­fore should not be used to commute within city lim­its. It is, how­ever, apt for driv­ing to and from scenic spots and ru­ral ar­eas where pub­lic trans­port ser­vice could be ir­reg­u­lar and er­ratic.

Shared cars have be­come a cost-ef­fec­tive choice for peo­ple who are ea­ger to make the best of the lim­ited re­sources. But like all other new busi­ness mod­els, the car-shar­ing busi­ness also comes with op­por­tu­ni­ties as well as chal­lenges.

The first chal­lenge is to en­sure peo­ple use their real iden­tity to reg­is­ter for car­shar­ing ser­vices. True, ser­vice providers re­quire a valid driver’s li­cense for iden­tity au­then­ti­ca­tion. But users can steal other peo­ple’s per­sonal in­for­ma­tion to reg­is­ter, which could be dan­ger­ous, es­pe­cially if the user is a mi­nor or ju­ve­nile.

Tech­ni­cal mea­sures are both avail­able and ad­vis­able for car-shar­ing com­pa­nies, in­clud­ing us­ing fa­cial recog­ni­tion to en­sure a per­son uses gen­uine per­sonal data to reg­is­ter. Be­sides, reg­u­la­tors and car-shar­ing com­pa­nies should join hands to set up a credit sys­tem, which can be used to pre­pare a “black list” of way­ward users and deduct penalty points from their record.

The sec­ond chal­lenge is to iden­tify the li­a­bil­i­ties in case of a traf­fic ac­ci­dent. Most car­shar­ing ser­vice providers put an ex­emp­tion clause in the con­tract say­ing they can­not guar­an­tee their cars are en­tirely safe, ask­ing users to stop driv­ing as soon as they sense a pos­si­ble dan­ger and con­tact per­son­nel in the cus­tomer as­sis­tance sec­tion. That is a tricky clause, as most users can­not an­a­lyze the signs of a mal­func­tion. That the clause frees the car-shar­ing com­pa­nies from shar­ing any li­a­bil­ity even if a car mal­func­tion leads to an ac­ci­dent is, to say the least, un­fair on users.

There­fore, reg­u­la­tors need to work out tar­geted reg­u­la­tions to deal with the mul­ti­far­i­ous prob­lems that could arise in the car-shar­ing busi­ness.

The car-shar­ing ser­vice model is based on car rentals. It is es­sen­tially car-lease ser­vice com­bined with tech­no­log­i­cal sup­port such as GPS, on­line book­ing, big data and elec­tron- ic pay­ment. But com­pared with tra­di­tional car­lease ser­vice, it of­fers more tai­lored and ef­fec­tive con­tract with flex­i­ble choices of “hir­ing” and re­turn­ing a car.

If car-shar­ing com­pa­nies op­er­ate on a park-and-ride (P+R) model to sup­ple­ment pub­lic trans­port, they will not only make com­mut­ing eas­ier but also ease the pres­sure on pub­lic trans­port ve­hi­cles and re­duce traf­fic jams. Un­der the P+R model, fa­cil­i­ties such as park­ing lots are built close to bus or sub­way sta­tions, gen­er­ally on the out­skirts of cities.

There­fore, the au­thor­i­ties should en­cour­age car-shar­ing ser­vices, and they can do so by grant­ing car-shar­ing com- pa­nies some tax de­duc­tions and/or of­fer­ing them more sub­si­dies.

A no­table fac­tor in the car­shar­ing busi­ness is that in­stead of hir­ing the ve­hi­cles, many car-shar­ing com­pa­nies own them, and thus could use the prof­its they earn to buy new-en­ergy ve­hi­cles. For ex­am­ple, Yiyi Auto owns more than 100 elec­tric cars and 15 charg­ing sta­tions in Bei­jing.

In fact, new en­ergy ve­hi­cles al­ready have a large share of the car-shar­ing mar­ket. So by pro­mot­ing the car-shar­ing

busi­ness, the au­thor­i­ties will in­di­rectly pro­mote new en­ergy ve­hi­cles, which are less harm­ful to the en­vi­ron­ment. One way the au­thor­i­ties could pro­mote car shar­ing is by al­low­ing car­shar­ing com­pa­nies to use the un­der­uti­lized park­ing lots.

Also, the car-shar­ing busi­ness is not likely to turn into an in­vest­ment war, such as the one be­tween Didi Chux­ing and Uber. De­spite in­vest­ing heav­ily to pur­chase or hire cars, the car-shar­ing com­pa­nies can­not ex­pect boom­ing busi­ness or rapid growth in the short term.

In all like­li­hood, the car­shar­ing busi­ness will grow at a steady pace be­cause to ex­pand rapidly, the com­pa­nies will need huge in­vest­ments. And they are more likely to use the prof­its to ex­pand their busi­nesses than pass­ing them on to users in the form of con­ces­sions or sub­si­dies, rul­ing out the chances of a price war.


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