Carsharing set to soar
With vehicle automation rapidly gaining currency, carsharing operators (CSOs) are developing novel business models to address the evolving mobility demands of commuters.
This is just one finding from Frost & Sullivan’s new study Future of Carsharing Market to 2025 which forms part of the Automotive & Transportation Growth Partnership Service programme.
The report claims that CSO will initially offer self-parking services, allowing members to drop off vehicles at designated parking lots, and gradually roll out short-distance parking service, wherein self-driven vehicles will be driven into parking lots. Finally, once complete automation is possible, collaboration with key players and convergence with public transport will change the mobility industry.
As automated driving will dilute the need for personal ownership, traditional car owners will gravitate toward carsharing services. Furthermore, the worsening levels of traffic congestion and pollution due to the development of mega-cities and urbanisation foster a favourable environment for efficient travel services.
‘The convenience, flexibility and security of carsharing services make a strong case for the adoption of integrated mobility services,’ said mobility senior research analyst, Krishna Achuthan. ‘This, in turn, will lead to a number of mergers and acquisitions among industry majors that recognize the market benefits of offering such systems and digital platforms.’
In addition to market consolidation, technology advancements and government initiatives will give a huge boost to carsharing services, with the number subscribers expected to cross 36 million by 2025 from 7.9 million in 2015. However, to achieve optimum market potential, CSOs need to counter the high insurance cost and inadequate demand in areas with low population density.
BMW’s DriveNow and ReachNow, Daimler’s Car2Go, Zipcar, Bollore Group and GM currently are the prominent players in the space. This pool of competitors is set to expand with advancements in public transit systems.
‘Physical integration of public transit systems with carsharing will allow users to book both cars and train tickets through one single mobile app and thereby, enhance convenience and drive member growth,’ explained Krishna. ‘In future, carsharing models are likely to expand to include peer-to-peer and corporate services on the same platform, as well as consolidate with adjacent mobility services like leasing, car rental and bike sharing.’