Saturday, January 26, 2013

Customers who buy drills don’t want quarter-inch drills, they want quarter-inch holes

Here's a round up of some things I've read recently that may help put carsharing in a larger perspective.

I'm a huge fan of The Atlantic Magazine's Atlantic Cities website - great articles about urban life, planning and transportation.  They've got another website called Quartz that recently published an article that really captures the moment in personal transportation that we're at: Is the threat of “peak car” turning makers of cars into “enablers of mobility”?

For starters, the US really has passed "peak car" - way back in 2007, long before the crash and in spite of rising population.  (Adjusting for population we hit peak car in 2005!)  We're now at the 1995 car count and falling.   The article summarizes a number of explanations.

And the article points out the auto manufacturers can't count on India and Asia to keep them afloat much longer.  China had a 12 day traffic jam and this picture of a freeway in India is a startling reminder of the lack of infrastructure there.

Another article by Micheline Maynard over at Forbes, The Secret Fear of the World Biggest Auto Companies, citing the lead article by Tomio Geron in the Feb. 11, 2013 Forbes, Air BnB and the Unstoppable Rise of the Share Economy, really nails the situation.  Geron writes:
“Getting into the share economy was the reason Avis Budget Group last month chose to pay a whopping $500 million for Zipcar, despite the fact that the pioneering rent-by-the-hour startup generated a paltry profit of $4.7 million over the past year. But Zipcar in some ways misses the larger point of what’s going on: Its fleet, as with Avis’, has been centrally owned. A more profitable model may lie in peer-to-peer car-sharing services such as RelayRides and Getaround, which mimic Hertz or Avis except that the service itself owns nothing. Their fleets, about 50,000 combined at last count, draw from the tens of millions of autos idling in America’s driveways. SideCar and Lyft slice that market finer, monetizing an empty seat by letting owners tote along fee-paying passengers on routes they may already be taking.”
So now we can see P2P as the profitable carsharing of the future (at least when the P2P companies finally start installing technology in the cars.

(Speaking of "nailing" the title of this post is from Geron's article.  Read it.)

Autonomous Cars

One final comment I'd offer is this:  I've read lots of articles predicting huge things for driverless cars over the past few years with a great deal of skepticism.  I really did not get it — yes, they might signficantly reduce accidents but come on guys, no way it could transform mobility.  It wasn't until after some conversations with folks at TRB earlier this month that I would even consider the claims being made by Chunka Mui in Fasten Your Seatbelts, Google's Driverless Cars is Worth Trillions, also in Forbes:
  1. We can reduce traffic accidents by 90%.
  2. We can reduce wasted commute time and energy by 90%.
  3. We can reduce the number of cars by 90%.
This sounds like a great city to live in, doesn't it?   Mui is quoting Google's head of development for the driverless car, Sebastian Thrun from his TED Talk.  Well worth the 4:14 min. to watch.

So, what happens when you add driverless technology to carsharing?  I'd suggest you can provide instant rentals (no reservation needed), open-ended trips (bring it back when you're done) and get increased utilization of your fleet.  And you can save on parking costs because the cars can be stashed out of sight and still be available on demand.  A carshare operator's dream and a very livable city!

And guess what?  Although Google may be getting the most publicity with its driverless cars, a number of auto manufacturers are also working on self driving technologies, including some already in the carsharing game - like Daimler and VW.  Hmmm, driverless cars + carsharing.  There could be a future there!

Am I off base?   Let me know what you think in Comments below.