CSCMP's Supply Chain Quarterly
Technology
August 18, 2019
Forward Thinking

Report: rise of car-sharing will roil automotive industry

Comment
Conventional car ownership to be replaced by app-based ride-hailing and vehicle-sharing, Lux Research says.

New business models aim to replace conventional car ownership with a combination of ride-hailing and vehicle-sharing accessed through mobile apps, according to a recent transportation industry report.

That vision may sound far-fetched, but it is already gaining serious traction, as shown by the combined market valuation of $166 billion for the world's top four ride-hailing companies-America's Uber Technologies Inc. and Lyft Inc., China's Didi Chuxing Technology Co., and Singapore-based Grab Holdings Inc.—according to Lux Research, a Boston-based research and advisory firm.

The rise of those transportation network companies is now threatening to disrupt the multi-trillion-dollar automotive industry, thanks to the success of trends like self-driving cars, zero-emission vehicles, connectivity, and innovative materials, Lux said in its report, "Sharing is Scaring: New Business Models Disrupting Mobility."

"Our reliance on owning a car has created one of the largest industries in the world. Today, however, our relationship with the automobile is changing as new business models aim to replace conventional car ownership with a combination of ride-hailing and vehicle-sharing accessed through mobile apps - a trend we call shared mobility," Chris Robinson, senior analyst and lead author of the report, said in a release.

As that "shared mobility" sector matures, two changes are affecting the players in the sector, he said. Shared mobility companies are pursuing integration of multiple transportation modes, such as bikes and scooters, into single platforms. And the industry's growth is attracting new competitors, including automakers, transportation network companies, and tech companies.

In the next stage of evolution, shared mobility providers will shift from startup mode into a search for profitability, driven by the rise of autonomous vehicles and by the integration of public transport into shared mobility platforms. "Despite the disruptive promises of shared mobility, no companies have been able to maintain profitability," Robinson said. "Autonomous vehicles promise to drastically alter the financials of ride-hailing."

Join the Discussion

After you comment, click Post. If you're not already logged in, you will be asked to log in or register.


Want more articles like this? Sign up for a free subscription to Supply Chain Executive Insight, a monthly e-newsletter that provides insights and commentary on supply chain trends and developments. Click here to subscribe.

We Want to Hear From You! We invite you to share your thoughts and opinions about this article by sending an e-mail to ?Subject=Letter to the Editor: Quarter : Report: rise of car-sharing will roil automotive industry"> . We will publish selected readers' comments in future issues of CSCMP's Supply Chain Quarterly. Correspondence may be edited for clarity or for length.

Want more articles like this? Subscribe to CSCMP's Supply Chain Quarterly.