I recently returned from IAA in Frankfurt, the world’s largest motor show where I participated on the New Mobility World panel.
The experience was exciting and informative. Not only did I get to share some ideas about new mobility and Ridecell’s role in shaping the future of transportation, but I also learned about emerging trends from dozens of other innovative companies that are working to change mobility as we know it. (You can read a short roundup here.)
At Ridecell, we’ve been keeping a close eye on the rapidly approaching point where autonomous driving and mobility-as-a-service intersect. When that happens, what will its effect be on private car sales and the surrounding industry? How will companies adapt to a cultural shift away from personal vehicle ownership? What is the specific set of challenges facing traditional players like automotive OEMs and car dealerships, and what steps can they take to succeed in the new mobility era?
What we’re seeing is that the companies most interested in getting into new mobility are those with a strategic mission to reduce their dependence on private vehicle ownership. There are several industries looking to reinvent themselves:
Auto OEMs have been clear that their mission is to become mobility companies. During the opening ceremony for New Mobility World, a Ford executive rode up on stage on a Ford-branded bicycle! Gestures like this demonstrate that established companies are thinking beyond their customary sphere and looking to embrace different modes of transportation.
With DriveNow, BMW has demonstrated longstanding support of on-demand transportation. In North America, Ridecell powers their ReachNow service, which offers both carsharing and chauffeured rides in a premium fleet of BMW and Mini vehicles. The reservation experience is app-enabled in a way that’s familiar to most smartphone users, but Ridecell’s robust software platform handles driver authentication, onboarding, and dispatch as well. It also provides ReachNow with next-gen features like supply and demand balancing, dynamic pricing, and usage analysis.
Other industries are transforming themselves. Auto clubs are finding that their membership is getting older and they have little to offer to millennials. That’s why AAA Northern California, Nevada & Utah tapped Ridecell to launch its own carsharing service, called GIG Car Share, to bridge their business dependencies. Instead of selling to existing vehicle owners, they’re now starting to offer new mobility to a younger audience.
Car dealerships are starting to worry that they’ll become the equivalent of the corner video store. Why will people need to buy a car when they can use a vehicle of their choice when (and only when) they need one? And the OEMs that they service are busy looking to enter the market and capture consumers directly, disintermediating the dealer. In response, Volkswagen has chosen to leverage their dealer network in Poland with a carsharing service that uses a fleet of Skoda cars — and is powered by Ridecell.
There are other industries that need to embrace the future autonomous reality. Rental car companies should consider offering one- and two-way cars by the minute, and in convenient free-floating locations around a city, not a shuttle bus ride away. Even insurance companies will need to embrace autonomy and the on-demand revolution, adapting their business model to reflect that fewer accidents and fewer privately owned vehicles will dramatically change the nature of their business.
In a nutshell: The companies that create new mobility services now are those in the best position to profit from the transition from private vehicle ownership to paying for transportation one ride at a time.
Author: Mark Thomas, VP of Marketing/Alliances, Ridecell