There's not yet a winning model for ride-sharing schemes, Vulog's Alex Thibault told Susan Kuchinskas.

Which entities are best-suited to deploy, operate and profit from ride-sharing services? Many more than might seem obvious, according to Alex Thibault, general manager, North America, for Vulog, provider of a white-label platform for shared mobility that's being used by 17 global services.

The market is just too young, which means lots of opportunity to experiment and develop market share. The latest Vulog customer is MOL Group, the Hungarian oil and gas company, which launched a service with 300 Volkswagens called MOL-Limo in late January 2018. A few weeks before that, Vulog helped D'Ieteren, a large Volkswagen distributor, launch the Poppy service in Belgium

As these examples show, it's not just automakers that are jumping into the space. Speaking to TU-Automotive, Thibault said: “Companies of all kinds are launching these new mobility services because it's a massive market that will be worth $1.8Bn (£1.27Bn) in 2030.” He's identified six sectors of business that could be involved in these launches, including not only carmakers and distributors but also car rental agencies, insurers, pureplay entrepreneurs and oil/energy producers but there could be even more.

Car rental agencies might be the best-positioned to launch shared mobility services, according to Thibault, because they have so much infrastructure in place: call centres, reservation systems, billing and maintenance. However, he said: “The synergies that others can get sometimes outweigh the benefit that car rental operators will generate from the competencies they already have. It's difficult to say right now if anyone is leading the pack.”

For energy companies like MOL Group, the goal is to diversify its operations as consumer demand shifts from petrol-powered vehicles to EVs and from personal vehicle ownership to on-demand transportation. For carmakers and distributors, Thibault says: “They want to own the relationship with customers. Having 500 shared cars in a city is a fantastic marketing opportunity.”

He identified three models for car-sharing services: round-trip, where cars must be returned to the location where they were picked up; free-floating, in which cars can be left in any legal parking space; and hybrid, where the same operator provides both free-floating and round-trip cars. The round-trip and free-floating models address different use cases; but he thinks that the free-floating model answers many more and therefore offers a larger addressable market. “You don't necessarily know which type of service will succeed in a market,” he said. “Getting market position is important.” Therefore, providing both kinds of services give a better chance of success.

In terms of ease of operation and profitability, he also sees the most potential in a hybrid model, a single provider handling both free-floating and round-trip car services.

In a hybrid service, “the profitability scheme will be a bit more complex,” he said. “There are more tools that can be leveraged nowadays, and more tools coming onto the market, that make it so you're increasing the likelihood of profitably in general.” Those include ways to optimise parking allocations, new insurance packages, being able to forecast demand and the ability to vary pricing.

Most ride-sharing services, no matter what the model, are local or regional, Thibault pointed out. “The operators that are probably going to come out on top are those that are agile enough to make this into more than a regional play,” he said. “Scaling with different partners around the world will be the key to this thing.”

He foresees a model similar to what the airlines do, aligning to provide continuous service while consolidating loyalty programmes. This would allow services to build network effects and build in switching costs. Today, he said, when an operator launches a new car-sharing service in a city, all the others benefit because more coverage means people are more likely to not need personal cars. Five to ten years from now, when the market is more saturated: “There will be a fight for market share.”

Autonomy will again change the market, Thibault said. “When autonomous vehicles come on line, all these models, including ride-hailing, will converge. The big difference in models will be, are you reserving in advance or instant booking?”

When asked how a company launching a car service now could prepare for the autonomous future, Thibault said that value-added features such as cars that drive themselves out of a parking stall to meet the user at the exit will give some operators a competitive advantage as the market gets closer to saturation. Thibault added that at this stage, everyone can win. If car sharing takes off: “people may travel more miles with different consumption patterns. It's not a zero-sum game.”

[Mob.Kuchinskas.2018.01.08]

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