Future of Personal Mobility—Life With or Without Ownership of Cars
In 2008, after I told a global leading car company that they are not in business of making cars, but in the industry of personal mobility, and that car sharing would be an important personal mobility business model of the future, I was almost thrown out of the factory gates. Six years later, the same car company now runs a car sharing business and is in the forefront of developing new mobility services around vehicle usage rather than car ownership.
In a very short period of time, between 2008 and 2014, we have seen a paradigm shift to car-usership-based models as opposed to an outright purchase. Mega Trends like urbanisation and connectivity have had a profound impact on personal mobility and on the car of the future, and this is leading to new mobility business models. Concepts like bike and car sharing, integrated door-to-door transport solutions, intermodality and smartphone-based urban mobility solutions, all activated through a smart app, will become commonplace in the urban world.
Car sharing is a self-service, on demand, pay-as-you-use usage model, which allows one to rent cars by the hour, based on a membership model and has already taken off with membership of such clubs having risen from million members in 2010 to million in 2013. Frost & Sullivan forecasts the membership to exponentially grow to about million by 2020. Over % of Zipcar’s members, one of the world’s largest car sharing clubs, have given up ownership of their personal vehicles. In a study conducted by my team at Frost & Sullivan, we noticed that for every car that went into a car sharing club, about seven to nine cars were removed from the streets. Today the number of cars in the car sharing fleet is only around , so this does not carry a huge impact, but if the fleet size does grow to over million cars, which we project will happen by 2025, this will have a significant impact on cars on the road and can help cut congestion in busy cities. One of the major benefits driving the car sharing market is a savings of around $per year over car ownership, which for a youngster today can be a significant cost savings.
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Car manufacturers are bracing themselves for the inevitable threat presented by car sharing schemes by transforming themselves into service providers offering integrated mobility solutions. Major car companies like BMW and Mercedes are unveiling integrated mobility-on-demand solutions. Daimler through its car2gosubsidiary today operates car sharing fleets in 26 cities using its Smart Cars. It plans to add between 5 and 10 new cities in the next 12 months and boost its membership to 1 million members.
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