Imagine how nice it would be if we could earn extra income from sharing our cars to others for a short period of time. Major players in the auto industry seem to being doing the palm-over-face (chat terminology: “pof”) expression for the car sales drop amidst the economic slump. Until they realized, every problem has a solution.Car-Sharing, a new business model that not only adds to the balance sheet, but can increase Asset Utilizationwhich reduces the opportunity cost of car owners idling their vehicle with no productive use for the larger part of its life time. This tremendously lucrative Asset, indeed, should be put to good use especial that most consumers are still keeping spending in a swathe.
Car-Sharing has all of a sudden emerged as an “Innovative business model” of the global industry since 15 years ago. But it became widely known since 2014 in hundreds of cities, 30 countries over the five continents, around the world. The new model is called the Multi-modal On-demand Mobility, where consumers have alternative options with regards to cleanliness and the ability to satisfy flexible traveling requirements. It seems that this model will continue growing with expected revenue worldwide of about 1.1 million dollars in 2015 and expected to be 6.5 million dollars in a year in 2024 (according to research results from Navigant).
Maven, the new service launched recently by the US car maker camp, General Motors (GM), is a service-oriented innovation for GM car owners to earn a little extra on the side while the car is idled, should they choose to do so. Maven takes advantage of GM’s OnStar system that connects transactions through the smart phone App (Cellular-based Telematrics in rocket science terms), determined to be safe for use during driving by GM. OnStar Corporation is a subsidiary of General Motors that provides subscription-based communications, in-vehicle security, hands free calling, turn-by-turn navigation, and remote diagnostics systems throughout the United States, Canada, China, Mexico and Europe. There will be more than 30 million subscribers to this service in the next 10 years and this is why GM is about to jump on the shared band wagon, full-fledged.
In the beginning, Maven will serve in Ann Arbor, a small town in Michigan, and expand in to other areas later on in the close future, in areas such as Chicago. Maven application users will be able to reserve their preferred vehicle through the mobile App easily and quickly, and most importantly, without any membership fee. All they need to do is pick-up the vehicle from any of the 21 registered locations around the city. Four Chevrolet models are on the offer, including Spark, Volt, Malibu and Tahoe that go for a $6 an hour rental fee (different from Ford’s ZipCar and Daimler’s Car2Go). While Maven vehicles are installed with 4G LTE internet connectivity to provide remote functions like mobile ignition, air conditioner control, and automatic instantaneous accident report. The most popular function, unsurprisingly, is favorite download sync of the driver’s to the rented vehicle so personal downloads are accessible in any rented unit at any rented time. Apple CarPlay, Android Auto and SiriusXM (the popular satellite radio service in the US) is also on the menu as well. The heart of the service is to make the user feel like they are driving their own car.
Maven Car-Sharing may seem counter-objective as it surely will not increase the incentive to buy a car. Unless, it’s a short term goal that is out of line with the longer prevailing trend of urbanization, sharing as oppose to owning, and reducing carbon foot prints. If that’s the case, then it probably makes sense to prepare itself and align strategies with outstanding inevitabilities to come, such as owning a feature that customers love, especially one that promises to increase vehicle turnover rate by maximizing Utilization. Inventory turnover, in short, pertains to a company’s ability to sell and restock its inventory. GM obviously sees the current auto market as undergoing a transition period that renders more of an opportunity than obstacles. GM is planning to offer this service as part of a pilot project in the backdrop of future unmanned vehicles and owner-driver sharing models that should shape future economic perspectives quite considerably. The opportunity shall bring new businesses to different operators, particularly ones that invest in making the necessary adjustments. Adaptation in accordance to prevailing trends and market situations, and most importantly, consumption behavior, is therefore essential to survivability more than ever before.