Carsharing—emphasis on the car

September 8th, 2020 | by Mark Thomas, EVP of Marketing and Alliances | Posted in: Insight on Things

Ridecell Carsharing

The instant we began to practice social distancing, the way we consume transportation shifted. Can you remember your last time ride sharing? And if it was recent, then the answer is likely to be, “vividly”. Yet shared mobility has been experiencing a resurgence. How? The answer is that there are many forms of shared mobility and in today’s environment, the need for one in particular, a carsharing service, is stronger than ever. But this time with a twist. People are now interested in keeping a vehicle for longer periods: a week, a month, or even more.

Before the pandemic, carsharing, especially one-way carsharing, was just one of many options you’d consider when getting around town. You could take a car share to your destination, park, and end the rental, and afterwards, you would use it or another nearby car for the next part of your journey. If by chance no cars were readily available, you had peace of mind knowing that you could always easily hail a ride or perhaps take public transit. Now in a pandemic, considering the risks of shared transportation, especially sharing space actively with others, has become a serious factor in how we move about our cities. And it has given many people pause before they choose to venture out.

According to an IBM study, 20 percent of people who used to take public transportation said they would no longer take it until the pandemic was over. Another 20 percent said they plan to reduce their public transportation usage. Ridesharing rides are down 75% while other forms of shared transportation have rebounded to their pre-COVID levels. So how is the market addressing this growing customer segment of former rideshare and transit customers? The response has been to create short term rental plans that let customers keep cars for longer.

GIG Car Share in the Bay Area and in Seattle has added multi-day rates to their fleet. Now you’re able to rent a hybrid or all-electric vehicle for 3 days, 5 days, a week and for the electric Gig even for a month! Effectively what this means is that in the three minutes it takes to download a carsharing app and go through the signup process, you have just secured the right to use a car with insurance, fuel, maintenance, and even parking included in one fixed price, plus you also have the right to return it or extend it as needed.  If you’ve ever stood in line at a rental counter or sat in a leasing office, when has acquiring a car ever been this easy? Leasing commits you to multiple years, requires you to carry your own insurance, and may still require you to pay your own maintenance. Forget about parking. Or rather don’t because that’s on you. As an alternative to all of this, the simplicity of carsharing has now become a preferred method for people who don’t wish to share a car. Well, at least until they’re done with it.

GIG Car Share

In Madrid and Paris, the Zity carsharing service responded to the demand for people who now want to use one of their all-electric ZOE vehicles by adding 1, 2 and 3-day plans in addition to the rental by the minute option.

And the new KINTO Share service in Stockholm was designed with the option for long term use in mind. Customers can go from initial signup to rental in minutes, whether choosing to use a car for a quick trip or over the span of months

You might wonder as this demand grows for short term vehicle access with the simplicity of carsharing and dependability of a dedicated vehicle, what is the traditional automotive industry also doing to address this opportunity? Subscriptions!

Subscriptions have also been quietly making a comeback. But unlike first generation subscriptions where the value proposition was more about vanity and luxury vehicle swapping, the 2020 value proposition is about simply and affordably getting people into a vehicle with no long term commitment and little overhead of insurance and maintenance. It’s similar to the car-as-a-service concept where one payment with a reduced cost of entry gets the person the right to drive a vehicle for as long as they need one—without obligation to keep it any longer than that. For many, this is a very attractive option over multi-year lease commitments or owning a vehicle, especially with economic uncertainty and until an effective vaccine for COVID-19 is widely available.

Looking further forward, once people experience the flexibility and simplicity of this way of securing their own transportation, going back to the old ways of sitting in a dealership and filling out forms, scheduling maintenance, and hunting for insurance will all seem like an antiquated process. In other words, this isn’t just a short-term pandemic opportunity. It will become the new expected normal and the baseline in the automotive industry.

Today, so many of us are navigating so many serious concerns and uncertainties. It’s a small silver lining but a silver lining nonetheless that the future of vehicle usership doesn’t need to be among them.

Author: Mark Thomas, VP of Marketing and Alliances, Ridecell


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