Once billed as the future of motoring, the industry of car-sharing appears to be stalling amidst an unconvinced market.
With more affordable car payment plans and a widespread desire towards private vehicles, we may be some time away from seeing car-sharing services truly take off.
The industry holds plenty of promise in terms of affordability, and some journalists have even predicted that the Covid-driven rise in remote work could lead to more workers ditching their cars in favour of car-sharing to reflect their lowering reliance on private cars.
Indeed, market forecasts still remain buoyant about the future of car-sharing, but there’s little doubting that there will be severe obstacles to overcome before companies can even dream of the exponential growth that the industry is seeking.
To help come to terms with the myriad challenges that car-sharing clubs and companies are facing in the near future, The City Fix has published a comprehensive list of issues and opportunities facing the technology in the near future.
In order to better understand the issues facing car-sharing, let’s explore some key reasons why the industry is failing to achieve the short-term success that some may have expected:
Lure of Vehicle Ownership
Significantly, one of the biggest questions the industry faces is whether car-sharing encourages individuals to become car owners, or whether it acts as a substitute for ownership.
Through consulting focus groups, The City Fix found that individuals see personal mobility as an aspirational pursuit. This can be seen as both an obstacle but also an opportunity for car-sharing companies and clubs.
Car-sharing can be a key factor in providing users with the chance to drive where they may otherwise be unable to afford to do so. However, for many individuals, it still comes is as second-best to physically owning a vehicle.
In some cultures, this can be a particularly difficult obstacle to overcome. In countries like China and India, car ownership is regarded as a status symbol. This can also be a problem in both the UK and USA – where the ownership of property is also seen as an aspirational pursuit.
This issue can be further compounded by more bite-sized and affordable car payment methods entering the market. Car finance options have opened the door to individuals buying their vehicles without having to turn to their savings to do so. In a society where it’s easier than ever to purchase vehicles, and where car-sharing is identified as second-best to ownership, it will take a great deal of marketing to change audience perceptions.
The Rise and Rise of Ride-Hailing
Another factor worth considering is that of ride-hailing services. Although modern ride-hailing technology closely mimics that of car-sharing, and although both approaches to transportation-on-demand emerged at similar times, ride-hailing apps like Uber and Lyft have taken off at a significantly higher rate than various car-sharing apps.
In fact, in the US, it was found that ride-hailing app usage had rocketed 77% between the years 2015 and 2018. However, car-sharing applications only managed to attain a 17% increase in use.
Ride-hailing represents a much more straightforward approach to transportation, where rides are requested remotely and priced competitively in relation to traditional taxi services. Although car-sharing can be altogether cheaper for journeys, the greater level of responsibility in looking after a vehicle can be off-putting to users.
Lacking Flexibility
In its current incarnation, car-sharing companies can lack the flexibility that’s needed to be reliable enough for users.
For instance, members of a car-sharing club could reserve their vehicle for a journey, but there’s no guarantee that their vehicle will be available at the time they need it – or for the length of time in which they plan to use it.
It can be reasonable to expect that, with appropriate levels of industry growth and scaling, in the future, this may be less of an issue for motorists – especially in a world that looks set to involve more remote workers in the post-Covid landscape. However, when access to a suitable vehicle is imperative for a user, the level of inconvenience can range from somewhat off-putting to inexcusably frustrating.
Shifting Mindsets Post-Covid
There’s also the sheer unpredictability of how the Coronavirus pandemic will change global societies in the near and distant future.
As we’ve touched on earlier, it seems reasonable to expect that there will be fewer reasons for car ownership in a world where more workers are based in their own homes. This could provide some optimism for car-sharing companies, as more drivers could sell their cars and opt for more on-demand services in order to get from A to B whenever required.
However, the psychological effects of Covid have made the future of many markets much more unpredictable. Even after the pandemic subsides and a vaccine restores some degree of normality across the world, will the effects of long-term lockdowns and self-isolation make individuals warier of sharing vehicles that have recently been used by strangers?
Given the unprecedented nature of the pandemic, it seems churlish to make sweeping statements about how citizens across the world might showcase different mindsets towards different technologies and innovations. However, there is plenty of evidence that the personality traits of those experiencing lockdowns due to Covid have changed during the pandemic.
Despite the many hurdles that the car-sharing industry faces, it’s certainly fair to say that life after Covid will come with plenty of new challenges to traditional motoring. As more workers stay at home and relinquish their need for private vehicles, the market will be ripe for innovation.
Although car-sharing may face an uphill battle in proving its appeal to markets that traditionally aspire towards the ownership of assets, it may have a golden opportunity to prove its worth in the coming years. Whether this window of opportunity will be wide enough to turn the tables on the burgeoning ride-sharing market to become an all-encompassing success story, time may tell.