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The Increasingly Relevant Business Case of Subscribing to a Car

Volvo’s mobility branch M is set to soon launch in the U.S., Cadillac’s Book is re-launching their service and BMW’s and Daimler’s DriveNow merger puts a new type of behemoth into the playing field of having access to a car without actually owning it [1].

There are some key factors that are rapidly affecting the possibilities to get around in a modern society without the need to actually own a car:

  • The rapid advancement of digital services has made it possible to get information and coordination of mobility services on the fly and minimize the hassle of finding an available car to rent, share or lease. It is also in the process of abolishing the physical car key and connect complementary mobility services, such as public transport departures to carsharing services.
  • The rise of delivery services is shifting the mobility responsibilities from the consumer to the provider in all types of goods and services, lowering the need for transportation in the everyday-life for citizens.
  • For both big OEM’s and car company start-ups, offering mobility as a service instead of as a product seems to be the new name of the game. Thus, how cars are used to make money is being shifted toward new services and business models, giving the mobility consumer greater choice to find a solution tailored to their own personal needs.
  • Increasingly, both cities and citizens are changing their views on what role the car has for them. Citizens want access to the right vehicle at the right time for their ever-changing needs. Cities want less congestion, less pollution and to shift away from car-centric designed streets and spaces. In light of this trend, more and more cities are opting toward reducing street parking spots for private residents and handing them over to car-sharing companies.

These factors are already affecting the viability of car-sharing today in a positive way, and the trend points toward a rising rate of both users and services in the future. In 2018 alone, Daimler’s carsharing service grew over 20% to 1.2 million users and was used so efficiently that research suggests that each car could take 11 others off the roads.

 

Personal comments

The reasons mentioned above have clearly contributed to creating thriving niche-markets for car-sharing services. However, these markets still seem to be quite few and far between, as the reasons in the list currently seem to signify necessary pillars for car-sharing to lean on rather than a wish-list for a friendly car-sharing environment. Thus, if any one of these parameters is absent, car-sharing services will have a hard time to get by. A good example of this would be Stockholm city, which has had multiple failed car-sharing endeavours in the past few years, much thanks to a hesitancy from city officials to hand over parking spots and deals to the entrepreneurs who so desperately need them.

 

Written by Darijan Jelica, RISE Viktoria.

 

Source

1. 2019-03-01. Subscribe, Then Drive