The Changing Face of Car Ownership
The real price of owning a car
Car ownership involves costs and efforts that not all to-be-owners anticipate in advance or are prepared to face. From making sure there’s always gas in the tank to paying insurance and taxes, taking care of oil changes, maintenance and repairs, owning a car isn’t as care-free as most would like. Not to mention that finding a parking space or a garage for it can be a challenging and expensive feat in most urban areas.
For many young people, just like owning a house, car ownership, too, seems like a large, unnecessary investment that isn’t certain to pay off. Enter car sharing services, or cars on demand. Unlike traditional car ownership, these types of services don’t come with all the baggage of being an owner — the maintenance, repair, insurance costs and taxes.
It is a highly flexible and affordable business model that also reduces carbon emissions. In Europe, new players are frequently entering and exiting the already crowded space of car sharing services, due to its lucrative outlook. Some of the most prominent ones include Car2Go in Germany, drivy in France, Share Now in Belgium, and Share’n’go in Italy.
Distributed ownership or shared transportation?
While car sharing is a concept that appeals to many, others prefer to still own a vehicle, fully or partially. In those cases, distributed car ownership such as the one offered by Whipcar, is the answer. Unlike traditional car ownership and car sharing services, co-owning a car with others means you get to share the ownership costs, as well as its usage.
Clearly, this model isn’t for everyone, but it could work well for those who only need a car occasionally, or within specific times. There is also the possibility of renting out one’s car for short- or long-term usage whenever it’s not being used, thus making up some of the costs of car ownership with rental income.
Technology enabling the sharing economy for cars
The sharing economy is first and foremost made possible by technology. AirBnB, Uber, Lyft, Car2Go, Gett, Blablacar, and other sharing services are enabled by platforms and apps that connect users with housing, car, and ride providers. The ubiquity of smartphones with GPS functionality, fast internet connection speeds, and the low cost of data have significantly facilitated these types of 1:1 exchanges, making the tech companies that enabled them very wealthy. Laws and regulations are yet to catch up to the speed, at which technology is disrupting traditional sectors, though demand is not likely to subside.
Environmental perks of car sharing
Not only are car sharing and distributed ownership services convenient and cost-saving, but they also have a positive impact on the environment, urban mobility and congestion. Fewer cars mean fewer emissions, traffic jams, and parking availability issues, while usage on demand means drivers will use fossil-fueled transportation only when necessary.
While having a car is a convenience, it’s often inefficient, expensive and polluting. Yet, exclusive car owners are likely to jump in their cars much more often even for short distances, rather than walk or take public transportation. Both options are, of course, more beneficial from a health and environmental perspective, but often considered inconvenient and time-consuming. Modern car usage alternatives enabled by technology and shifts in attitude are changing this trend for the better.
Car sharing impact on manufacturers
For car manufacturers who continue to see declining automotive sales from millennials year over year, it may seem like car sharing is a trend they wouldn’t willingly perpetuate. Yet, enterprising automotive leaders like BMW and Mercedes, have all started car sharing services of their own, successfully straddling the car ownership and car sharing models and profiting from both. This ensures their continued profit from manufacturing cars, on top of renting those cars out, effectively generating alternative streams of income from services.