Sharing cars is a trend on the move
Ride-sharing companies such as Uber and Lyft have inspired a lot of debate about the future of personal transportation, but there is another trend underway that is just as important: car-sharing.
Automakers are warming to the idea of sprinkling small cars all around a city, and then charging customers by the mile or minute to use them. Pick up the car closest to you using a mobile phone app and drop it off when you’re done within the designated area.
I’ve become a huge fan of car-sharing since I started dividing my week between Houston and Austin, where my wife lives. She has a car in Austin, and I keep a car in Houston, relying on a bus to move between the cities.
When we both need a car in Austin, I use Car2Go, a car-sharing subsidiary of Daimler AG. Daimler supplies hundreds of cars in 30 cities. Each car is equipped with technology that allows a cardholder to rent it by the minute using their smartphones.
Car2Go covers most of Austin with 300 cars, and I can usually find one within a five minute walk. The company takes care of maintenance, insurance and fuel, and many of the cars are electric. The company also rents designated street parking in highvolume areas.
Houston has Zip-Car, but they only have a few dozen cars compared to the hundreds deployed by larger car-sharing firms, and much stricter rules about where to pick up and drop off the car.
Car-sharing is catching on around the world, with Boston Consulting Group reporting that 5.8 million people use car-sharing now, and that number is expected to reach 15 million over the next five years.
“Although the largest market is the Asia-Pacific region with 2.3 million users and 33,000 vehicles, Europe boasts the largest service per capita, with 2.1 million users and 31,000 vehicles,” the group concluded. “North America brings up the rear, with 1.5 million users sharing 22,000 vehicles. Together the three regions account for 2.5 billion booked minutes per year and 650 million pounds in revenues.”
Perhaps most frightening for automakers, the growth in car-sharing means 550,000 fewer cars sold a year, according Boston Consulting Group. The potential for automakers, though, is enormous as more people move into crowded, expensive cities, which is why U.S. automakers are following in Daimler’s footsteps. They also plan to own the cars and rent them by the minute.
Car-sharing will never eliminate a soccer mom’s need for a minivan, but it could eliminate dad’s need for a commuter car that sits in a parking garage most of the day. Add in electric charging and self-driving technology, and personal transportation is fundamentally transformed.
There are many different ways consumers can react to this technology, but smart executives understand that the future will be nothing like the past.