Carsharing: Automobile manufacturers no longer provide just vehicles, but mobility for everyone

The Smarts and Minis of car2go and DriveNow have become symbols of change and sustainable mobility behavior in large cities. Volkswagen has even launched a project in Africa.

Booking parking spaces instead of having to find them, smartphone apps instead of keys, carsharing instead of a bill of sale: the transportation sector will be fundamentally transformed in the coming years. Mobility services are steadily gaining greater significance; sales in the billions are forecast. German automobile manufacturers are leading the way in the shift from sellers to mobile all-round service providers, and have hit the nerve of the customers with an update of the original concept of carsharing. In recent years, several manufacturers in Germany have established themselves in this field with their special idea of carsharing.

A brief look back: In 2009, Daimler introduced an app with which cars parked in the city could be located, booked, and opened using an access code, a first in Germany. With car2go, the Stuttgart-based manufacturer introduced the “free-floating” concept (i.e. not bound to fixed stations) throughout Germany. The BMW Group has become equally successful with DriveNow. 

Station-based carsharing is offered in some 600 cities and municipalities in Germany. The vehicles park in private parking spaces over 90% of the time, in contrast to the fleets of major car manufacturers. There is often no space left in inner cities for providers to increase the scope of their services. This will change after a law passed in March 2017 comes into effect, which will give priority to carsharing vehicles in certain urban areas. It will allow carsharing companies to reserve public parking spaces as fixed stations (“station-based carsharing”). These will be assigned to individual providers based on business-related factors.

Digital technologies are what will pave the way to new business models. They simplify the way to handle and use carsharing, making the service more attractive to those who were previously skeptical about sharing vehicles. “As for the technical side, simple booking via apps and portals reduces trepidation about getting into a borrowed car”, says the Swiss futurist Lars Thomsen. Furthermore, conventional car keys are being replaced by codes, chips and special connectivity devices; billing is generally transparent and carried out automatically, according to Thomsen.

Last but not least, Facebook and other social networks have changed relationships between people: “We share so much private information with supposed strangers that the distance between people is decreasing and the willingness to share personal material things, such as a car, is increasing,” says Thomsen.

The demand for carsharing has been increasing steadily in the last years.
According to a survey conducted by the Allensbach Institute, about 730,000 Germans used carsharing services at least once in 2016; in 2012, this number was just 380,000. 8.15 million citizens claimed to be interested in carsharing; four years earlier, it was only 6.11 million.
Many residents of large cities forgo car ownership and rent vehicles for short periods instead.

The German automotive industry is innovative in its search for new business opportunities. For example, Volkswagen is planning to offer carsharing via apps in Rwanda. To supply the vehicles for the integrated mobility concept, Volkswagen plans to build a local, environmentally friendly vehicle manufacturing facility in the capital Kigali. It will build a version of the VW Polo, from several hundred to one thousand per year. For Volkswagen, which is represented by Greenwheels in the German carsharing market, the African project is also a test run for future mobility concepts. With an average age of just under 20, Rwandans are very young. The population is very interested in technology, and Kigali has an excellent infrastructure.

The automotive industry is changing rapidly. In a few years, some experts say, no one will have to sit at the wheel of a borrowed car; it will drive itself. “Carsharing and autonomous driving are important issues for the mobility of the future,” Thomsen said. “And it gets really interesting when you put the two trends together.” For this reason, he is convinced that there will be autonomously driving shuttle and carsharing fleets earlier than is commonly assumed.

It is not yet clear how much all the facets of carsharing will change urban mobility. But one thing is already clear: acceptance of carsharing is growing – and with it the number of different business models.