United States: The Sharing Economy: Ride Sharing Provides Unique Challenges To Automotive Manufacturers Going Forward

A recent study published by AlixPartners estimates that for each car-sharing vehicle on the road, 32 personal vehicle purchases do not occur, which to date has resulted in 500,000 missed vehicle sales for automotive manufacturers. AlixPartners estimates that by 2020, automakers will miss out on an additional 1.2 million vehicle sales as a result of ride sharing systems as they begin to mature nationwide. As of 2016, 6 million people worldwide were using some form of shared-vehicle transportation and its projected that could grow to 30 million people by 2020.

Survey respondents indicated "ease of access, convenience and economics" were primary reasons to utilize car-sharing over ownership. Although environmentalism has often been picked as a driving motivator for the use of ride-sharing systems, it was not found to be an influential factor among survey participants. The survey found that 51 percent of participants avoided vehicle purchases due to car sharing and 45 percent of participants will likely avoid future purchase of personal vehicles. In an unsurprising fashion, the survey found the decision to not purchase a personal vehicle was highest among younger consumers but surprisingly, also highest among households with children – both presenting future issues for the auto industry.

While Zipcar (owned by Avis since 2013) has been the U.S. market leader for ride sharing since launching in 1999, major automotive manufacturers and rental-car agencies have started to enter the market as consumers' sentiment begins to trend away from personal-vehicle ownership. General Motors, Ford, BMW, Enterprise, and Avis have found ways to utilize their extensive fleets of vehicles and nation-wide footprint to expand their brand and product utilization in this rapidly changing transit landscape. While smartphones and rapidly increasing urban density have driven ride-sharing adoption up until this point, many believe the rapid expansion of automated and driverless cars could be a key catalyst for car-sharing to grow well beyond the current early-adopters.

In January 2016, General Motors Corporation launched its Zipcar competitor, Maven, in 8 markets around the United States and has slowly expanded to 13 cities with over 35,000 members. Since launching, Maven has logged over 145 million miles driven by Maven customers and General Motors has expanded its fleet to include the Chevy Bolt EV, Suburban, and Malibu in numerous markets. Additionally, General Motors has invested over $500 million into Uber competitor, Lyft, and used Lyft to set up Maven Gig which offers special pricing to "gig economy workers as a way to easily gain access to a vehicle for short stints to do things like deliver groceries and food on demand, and provide ride sharing services."

In a different move, Ford Motor Company announced in 2016 the acquisition of Chariot Transit Inc. via its subsidiary Ford Smart Mobility. Chariot is a commuter shuttle service which utilizes a mobile-phone application to allow passengers to reserve rides on a shuttle between home and work during commuting hours in the San Francisco Bay region. Additionally, in 2017 Ford launched the Ford GoBike, a bike sharing system in San Francisco with 7,000 bikes and over 400 docking stations making it the second largest bike sharing system in the United States.

While Uber, Lyft, Google's Waymo, General Motors, and Ford see automation coming together with ride sharing for their cars and the day-to-day driver, the University of Michigan announced that the 2017 school year will see the launch of two fully-automated, 15-passenger, all-electric shuttles. The goal of these shuttles is to transport students, faculty, and staff between UM's Engineering campus, which is located on North Campus, and the university's North Campus Research Complex. With Ann Arbor, Michigan and the surrounding Detroit Metropolitan area positioning itself to be the connected and autonomous transit development hub of the country, this move by the University of Michigan in relation to its larger-scale Mcity autonomous project provides a unique opportunity for automotive manufacturers and suppliers to see how the mix of ride sharing and autonomous vehicles will shape the commuting landscape in the coming years.

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