CAR SHARING, CAR OWNERSHIP WILL COEXIST
The automotive industry is on the cusp of a major change, one that will both shift and fracture our traditional business model as car brands compete for tomorrow’s customers.
Consider three of the biggest areas of disruption: the rising interest in powertrain electrification, telematics connected car systems creating a deeper integration between a driver’s life and his/her vehicle, and autonomous driving capabilities.
These massive, industry-wide innovations are affecting the design, research, and development divisions at all major global automakers as we try to predict an uncertain future.
One area that has received a lot of attention is the concept of ride sharing, or the emerging perspective of automotive transportation as a service, rather than an owned object.
This past spring, San Francisco-based think tank RethinkX predicted that 95 per cent of automotive travel will be in shared vehicles by 2030.
While I will agree that ride — or vehicle — sharing might make sense to some people, it is by no means the universal solution it has often been portrayed.
For someone in a downtown core, living close to work, family, and friends, a sharing economy could make sense as his/her automotive needs may be few and far between. However, once that person finds a partner, moves to the suburbs and has kids, the situation changes. Ride sharing works for planned events, such as the daily commute, or taking a child to soccer practice, but the concept begins to break down when dealing with the unexpected. How about the moment you run out of diapers? Or it’s 2 a.m. and your child needs cough syrup to get back sleep? Or the puck drop for your Wednesday night pickup hockey game is delayed by an hour?
Even if we set aside the unplanned for a moment, consider this singular scenario: a customer with small children committing to the car sharing lifestyle would also have to commit to perpetually installing and removing child safety seats, a task that is wholly unappealing for anyone who has done it.
Then, we have the personal nature of a vehicle. Anecdotally, I hear people talk about their daily commute as a sanctuary — a solitary moment to reflect on the past and plan for the future. That’s what I do and I’m not willing to lose even one those moments to ride sharing.
Finally, we would also lose the personalization of this sanctuary. We each have customized our vehicles — seating position, climate control, radio station presets, lighting, etc. — to our own preferences.
As vehicles become more connected, they also become opportunities to be more productive. Consider using the onboard connectivity systems to move a meeting in your calendar, arrange for dry cleaning, schedule a doctor’s appointment, or make a reservation for your anniversary. The vehicles of the future will be fully integrated into the digital world, such that sharing space during your commute would also mean sharing your life.
In situations like these, customers will resist pulling out their phones to find an available vehicle when, today, they have the privacy and freedom to hop in the driver’s seat and drive.
Business disruptors only succeed if their product or service materially improves a customer’s life in cost, performance, or (most critically) simplicity. No consumer is actively searching to spend money on something that adds complication to his/her life.
Today, there are customers searching for a small, sporty car that have no interest in a large people-mover. In the future, there will be customers interested in owning a vehicle while others will be happy with an on-demand car sharing service.
For a company like Hyundai, currently at the leading edge of research and the development of electric, self-driving, connected vehicles, it will be ready to respond to customer demand, whether that customer is looking for a family vehicle, or a car sharing service. Giving customers that choice will be key.