Over the last ten years I have watched respected publications go all in on the amazing future of car sharing. In the last couple years that fervor has died down somewhat, after expected successes have failed to come to fruition in even some of the most pessimistic scenarios presented. The arguments for "the rapidly approaching revolution" have never impressed me, and I've noted this here previously on Zipcar. The traditional (or current) form of car sharing simply doesn't work very well, and it's very difficult to see the profitable and socially disruptive changes from it in the near-term.
Car sharing as it exists today is car rental with more convenient locations. The car must still be washed, returned to a verified location, have regular maintenance, etc. The cost structure and customer experience is not all that different. Car sharing makes a product (off-airport car rental) marginally more convenient for customers. This is not to say that is a bad idea, but that car sharing today is a slightly improved version of car rental and nothing more. There can be strategic reasons for car rental companies to use car sharing as a tactic in the off-airport market, but it is not, by itself, a revolutionary and disruptive technology at least in terms of its impact outside the vehicle rental market.
Car sharing will remain a niche product and mostly non-disruptive until users can more seamlessly rent their cars. Three developments are necessary for this to happen:
1) Technology. A seamless car sharing experience requires the right technology (GPS, vehicle status, and vehicle access) in the car to facilitate the transaction. However, installing the technology post-OEM is expensive and not standardized. The car sharing technology needs to come prepackaged in the car. A few new models have this technology prepackaged, but this is currently the exception rather than the rule. As adoption increases, the potential market and scale of car sharing at least becomes a possibility.
2) Open Data Platform. OEMs must not only prepackage the technology in the car, but they must also allow their users to provide vehicle data to whomever the user wishes. A software and network need to be developed to aggregate the availability and demand for these cars across OEM platforms. Scale is needed for this to work. If there are various competing applications and the OEMs remain on segregated software platforms, scale will come much slower.
3) Culture. Are people ready for it? AirBnB had a lot of pushback in the beginning because potential investors thought that the vast majority of individuals were not willing to open their homes to "strangers." They were wrong. Are people ready to do this with cars? There are some of the same complexities and issues as turning over the house to a stranger, but with a bit more frequent, "I didn't cause that scratch!" Perhaps technology will eventually smooth over this issue as well.
Is car sharing going to arrive? If so, will it arrive before autonomous vehicles? If it is going to arrive, each of the three hurdles above will need to be overcome in a meaningful way. However, the potential for autonomous vehicles may be sucking the air out of the room and stakeholders' initiative might just not be there in terms of car sharing except within limited scopes.
Car sharing as it exists today is car rental with more convenient locations. The car must still be washed, returned to a verified location, have regular maintenance, etc. The cost structure and customer experience is not all that different. Car sharing makes a product (off-airport car rental) marginally more convenient for customers. This is not to say that is a bad idea, but that car sharing today is a slightly improved version of car rental and nothing more. There can be strategic reasons for car rental companies to use car sharing as a tactic in the off-airport market, but it is not, by itself, a revolutionary and disruptive technology at least in terms of its impact outside the vehicle rental market.
Car sharing will remain a niche product and mostly non-disruptive until users can more seamlessly rent their cars. Three developments are necessary for this to happen:
1) Technology. A seamless car sharing experience requires the right technology (GPS, vehicle status, and vehicle access) in the car to facilitate the transaction. However, installing the technology post-OEM is expensive and not standardized. The car sharing technology needs to come prepackaged in the car. A few new models have this technology prepackaged, but this is currently the exception rather than the rule. As adoption increases, the potential market and scale of car sharing at least becomes a possibility.
2) Open Data Platform. OEMs must not only prepackage the technology in the car, but they must also allow their users to provide vehicle data to whomever the user wishes. A software and network need to be developed to aggregate the availability and demand for these cars across OEM platforms. Scale is needed for this to work. If there are various competing applications and the OEMs remain on segregated software platforms, scale will come much slower.
3) Culture. Are people ready for it? AirBnB had a lot of pushback in the beginning because potential investors thought that the vast majority of individuals were not willing to open their homes to "strangers." They were wrong. Are people ready to do this with cars? There are some of the same complexities and issues as turning over the house to a stranger, but with a bit more frequent, "I didn't cause that scratch!" Perhaps technology will eventually smooth over this issue as well.
Is car sharing going to arrive? If so, will it arrive before autonomous vehicles? If it is going to arrive, each of the three hurdles above will need to be overcome in a meaningful way. However, the potential for autonomous vehicles may be sucking the air out of the room and stakeholders' initiative might just not be there in terms of car sharing except within limited scopes.
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