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Wednesday, March 23, 2016

How the Sharing Economy will Gain New Momentum

Airbnb did it to the hospitality industry. Then, Uber did it to taxi services. Now driverless cars are going to totally disrupt the whole automotive industry, propelling car sharing services forward as the ultimate, mainstream transportation mode.

This new car sharing economy is already well in motion. According to the latest worldwide market study by ABI Research, they are forecasting that 400 million people will rely on robotic car sharing by 2030.

"The new car sharing economy happens in three phases: street rental service, ride sharing service, and robotic service," says Dominique Bonte, vice president at ABI Research. "The automotive industry is in the process of merging phases one and two, with robotic service to become the ultimate form of transportation for its availability, convenience, and affordability."

The Sharing Economy in Action

Zipcar, the world's largest car sharing and car club service, is a prime example of street rental service. Interested users go to a pre-determined parking spot to unlock a shared car, ride it to their destination, and then return it for the next user.

Uber is a primary example of the ride sharing service, through which companies hire private drivers to drive their own vehicles to transport customers. ABI believes that the innovative robotic service will mark the beginning of the driverless car era, in which cars can drive themselves to pick-up customers.

"Car sharing is successful because the increased efficiency through higher vehicle utilization rates drives down costs, which results in more affordable transportation," continues Bonte. "Why go through the expense of purchasing a car, and then regular insurance and maintenance fees, when we can all embrace the new car sharing economy?"

According to the ABI assessment, the new car sharing economy is a classic example of crowdsourcing, and as such is driving many GenY supporters. The principal benefits extend beyond the collaboration aspect, and include the ability to tap into and monetize personally owned assets and real-time matching of supply and demand.

Shared Transportation Market Development

Accurately matching transportation supply and consumer demand was previously considered a challenge, but now ABI analysts believe that the new car sharing model will increase car capacity, when required, through dynamically optimizing pricing.

For instance, Uber's surge pricing system significantly increases rates during peak times to increase driver incentive and ultimately place more cars on the road to improve availability. Once Uber achieves its goal, it lowers the rates back down to their standard level.

In all, successive generations of car sharing will progressively impact and disrupt markets and verticals, such as private transportation, public transportation, and ultimately the entire automotive industry. Traditional auto rental companies, as an example, seem particularly vulnerable.

Once the new car sharing economy reaches its final frontier, ABI says robotic car services will transform the industry -- resulting in decreased car ownership, blurred lines between public and private transportation, enhanced social mobility, new infotainment paradigms, and an overall consolidation of the automotive industry.