Home Taxi company Why own a car when you can share or lease one?

Why own a car when you can share or lease one?

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By: Amit Kumar, CEO of OLX Autos India

Shared mobility, as the name suggests, is the idea of ​​sharing modes of transport, whether it is public transport, personal cars or even bicycles. This is not a recent concept; its origins go back rather to Switzerland in the 1940s. The current form of shared mobility took shape about ten years ago, when the first carpooling platforms were launched. Additionally, advances in network connectivity and wireless technologies have accelerated the adoption of carpooling.

Meanwhile, there are a slew of autonomous vehicles (AVs) in sight, a few of which have already begun operations. Tech giants such as Google, Apple, and Amazon all have AV development programs underway. And car subscription services are making rapid inroads into the shared mobility space.

What is interesting to note is the fact that personal cars have long been seen as status symbols. But personal cars are, on average, parked 95% of the time, while loan repayments on these depreciating assets take between three and seven years. Millennials, in particular, quickly recognized this inefficient aspect of car ownership.

Popular shared mobility options

From a global perspective, Zipcar was a pioneer in shared mobility. The Boston, USA-based company began operations in 2000. It was acquired by Avis Budget Group in 2013 for an estimated US$500 million.

The model of this carpooling platform is interesting in that users can pick up a vehicle from designated parking spots in a city. This is different from rental cars which must be picked up and dropped off at a company location with full fuel tanks. In addition, rental fees are charged by the hour and not by the day.

Over the past decade, ride-sharing services such as Uber, Ola, Lyft, Grab, GoJek, and DiDi have played a key role in popularizing shared mobility around the world. They offer convenient transportation solutions without the need to own a car and the responsibilities that come with it.

Use of Automotive Subscription Services

The term subscription generally refers to books or OTT services. In recent years, the same philosophy has been adapted to offer innovations in shared mobility. The major global players in the car subscription business include Fair Financial Corporation, Clutch Technology, CarNext, and FlexDrive, among others. The growth of this segment is expected to be highest in the Asia-Pacific region due to higher population and rapid urbanization.

One of the early entrants into the Indian car subscription space offers two types of cars – namely, unboxed and new. Unpackaged vehicles are units that are less than two years old. Subscription periods range from one month to a maximum of 48 months. During this mandate, the subscription company will manage the maintenance of the vehicles, the road tax and the payment of the insurances. The user will only pay a monthly fee.

Over US$100 billion has been invested in shared mobility companies over the past 12 years. This growth in shared mobility reflects the growing participation in a sharing economy.

Autonomous vehicles and carpooling

Robo-taxis and audio-visual vehicles are shared mobility modes of the future. Berlin-based AV startup Vay is set to receive regulatory approval to launch its fully remote fleet. The company has been testing its technology for two years on the streets of Berlin, with safety drivers behind the wheel. Similarly, Swedish self-driving truck company Einride is among the leaders in self-driving trucks.

The shared mobility market is poised for significant growth over the next five to seven years; it will grow at a CAGR of 16% and will total US$180 billion in 2025. It is quite possible that even higher levels of growth will be seen as robo-taxis become popular. Currently, robo-taxi services have been launched in Phoenix, Arizona by Waymo, the AV division of Google. Once these become commonplace, it’s safe to say that new levels of vehicle ownership will see a marked decline.

Shared mobility and environmental management

In addition to the practical and cost-effective aspects, shared mobility also meets environmental objectives and reduces traffic congestion in cities around the world. In densely populated countries like China and India in particular, shared mobility will experience the highest levels of growth. Research and analytics firm FutureBridge says, “China is a leader in ride-sharing services and some of the major players like Uber and DiDi have already established a foothold in the country through joint ventures, collaborations and mergers and acquisitions. .

Shared mobility promises substantial reductions in CO2 emissions and significantly lower demand for fossil fuels. Both are essential facets of the United Nations Sustainable Development Goals. Zipcar, for example, estimates that for every vehicle offered, they replace the role of 13 vehicles. During its operation, it estimates that it has kept an additional 415,000 vehicles off the roads, resulting in a reduction in carbon emissions of up to 1.6 billion pounds per year.

With the Russian-Ukrainian conflict driving crude oil prices up sharply, there’s a chance millions of people around the world will explore shared mobility options to offset rising fuel costs. More importantly, traffic congestion will be alleviated while the inconvenience and expense associated with parking will also be a thing of the past. Amidst these developments, the question that comes to mind is, “Why own a car when you can share one?” »

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