According to Forbes, car ownership is going to decline in the coming years due to the ever increasing costs and hassles that go along with owning a vehicle. Carsharing and renting will be increasing in popularity in relation to the exploding growth of the Sharing Economy. This has really disrupted the Personal Car Ownership industry. And what business has been associated with Personal Car Ownership for more than a century? You got it. Car dealerships. They’ve been selling cars to consumers since 1898, and now they’re scrambling to not be left behind in the Sharing Economy dust.
Personal Car Ownership and a Disruption in the Sharing Economy
The Sharing Economy, defined as person to person sharing of goods and services, is definitely changing the world. Where consumers were once obsessed with owning everything, now they’re into sharing everything, like bikes, scooters, guest rooms, and vacation homes, all found and paid for through websites and smartphone apps. If there is one area that’s really seen a huge uptick in sharing, it would be the shared use of automobiles. Car dealers are now focusing on getting unsold cars off the lot and into the Sharing Economy.
- Financial experts predict that shared mobility will account for 80% of the transportation industry by the year 2050. Meaning, only 20% of drivers will own their own vehicle at that time.
- This is why car dealers are now beginning to rent vehicles to drivers who want to work as a rideshare driver for Uber and Lyft.
- 40% of those rideshare drivers don’t own a qualifying vehicle or don’t want to own their own car, so they’re interested in renting a vehicle for work. That’s a huge financial opportunity for car dealers to create a new revenue stream.
The development of the car sharing app is revolutionizing and creating entirely new mobility ecosystems such as shared self-driving cars. Auto manufacturers like Tesla and Chevrolet, and even non-automakers such as Apple, are heavily investing in autonomous vehicles.
Car sharing and subscription services
Bottom line: rideshare drivers need cars. Car dealers need new ways to utilize their inventory and turn a profit. Carsharing and subscriptions services fit perfectly into this new way of thinking.
A car sitting unused on the lot earns nothing. Instead, that car can earn a dealership an average of $700-$1000 month when the vehicle is rented out to an Uber driver or Lyft driver. Uber driver or Lyft drivers can rent these vehicles so they can work and make an income, while the dealer pockets the monthly rental fees. Everybody’s a winner!
The Growing Popularity of MaaS (Mobility as a Service)
Mobility as a Service, or MaaS, is basically when different forms of on-demand shared mobility transportation services are offered to consumers through a single app. It’s a convenient time-saver for consumers on the go who need the best option to get to their destination as quickly as possible.
- MaaS is growing in popularity, changing the way people think when they consider owning a car as well as the way traditional automobile retailers structure their business.
- Auto dealers and car remarketing companies are learning to not ignore the transition to Mobility as a Service. The taxi industry took a massive hit when on-demand transportation companies like Uber and Lyft came on the scene, and automobile retailers don’t want that to happen to them.
- Traditional car dealerships sell vehicles to drivers, and also offer vehicle maintenance services. Incorporating a MaaS model into their structure will utilize their inventory and services to the fullest degree, instantly creating and increasing revenue.
Many dealers are exploring car subscription services for rideshare drivers. Also known as Cars as a Service, or CaaS. This offers short-term vehicle solutions at reduced prices.
- You pay a monthly subscription fee through an app, allowing you to choose from and drive all kinds of vehicles and models from a dealer’s inventory. You can switch from one car to another. Say, a sedan during the week, then a sports car for the weekend.
- Insurance, maintenance, and roadside assistance are usually included in the monthly subscription.
- Some subscription fees can be costly, especially for luxury vehicles like Porsches and Cadillacs.
- If you eventually do want to own a car, look for dealers that offer month-to-month ownership incentives that waive loans and excessive down payments.
Below are 6 tools car dealers or fleet owners to consider using to succeed in the sharing economy:
- Large fleet owners and car dealers should use a parking and traffic citation and ticket management service to handle parking, traffic, and toll violations incurred by a driver renting one of their cars.. A busy fleet management supervisor doesn’t need to deal with that tedious and frustrating nightmare.
- Just submit the ticket and TIKD’s attorneys will challenge it for you. Their experience shows that most citations are reduced or dismissed completely. All attorney fees, fines and court costs, if any, are included in your payment.
2. PassTime GPS Solutions:
- As more car dealers embrace MaaS, they need new ways to keep track of and manage the thousands of vehicles that are being rented to drivers. That’s why HyreCar entered a strategic partnership with PassTime.
- PassTime assists with vehicle tracking and fleet management. The company offers car dealers a GPS solution to track and control automotive inventory being used for shared mobility.
- What does a fleet manager do? For one thing, they make sure the fleet vehicle inventory is out on the road making money and not sitting in the repair bay.
- Fleet maintenance management software like Fleetio is essential to make this happen.
- The software acts as a virtual scheduling and service manager, tracking which vehicles are in the shop, which are due for scheduled maintenance, and which are ready to get back on the road. This saves a ton of time-consuming data entry work.
4. Element Fleet Transaction Management
- One of the most important fleet management products you can get is one that tracks transactions. This kind of technology platform handles all the reporting, ordering, vehicle inventory management, and analytics regarding sales and rentals so you don’t have to. Element is a fleet cost management tool that also allows you to customize and streamline your transaction reporting.
- Helps reduce stress and confusion when tax time rolls around by providing you with clearly displayed, easy-to-understand vehicle analytics.
- Provides a specialized app that informs drivers of mechanical issues and maintenance schedule alerts. The app also gives locations near the area the driver is in case of a repair emergency.
- The platform offers data regarding vehicle and fleet expenses such as price, operating costs, maintenance costs, and unearned profits due to vehicle downtime.
Bestmile offers fleet management technology in the form of a mobility services platform, providing solutions for human-driven and self-driven, autonomous fleets of vehicles. The company also provides new transportation services, such as robotaxis, to existing networks.
- The platform provides advanced fleet management by tracking maintenance and cleaning schedules of vehicles.
- Integrates autonomous vehicles into fleets, enabling automated dispatching, optimization of routes, collecting and analyzing vehicle data, and tracking performance improvement.
- A full control dashboard operator notifies nearby field agents of service issues, generates help tickets and routes them to the right resource, provides past, present, and future analytics, defines and edits on-demand and fixed-route service areas, and automatically schedules and identifies service times.
6. HyreCar + DriveItAway:
Thanks to a partnership between HyreCar and DriveItAway, car dealers utilize a 50-state marketplace that allows them to rent vehicles to rideshare drivers interested in driving for Uber and Lyft. Dealers just have to click a few buttons to get started.
- This is an easy way for car dealers to enter the increasingly popular Mobility as a Service industry.
- In turn, dealers increase utilization of inventory rates and scale their business. HyreCar also protects their inventory with LayUp fleet insurance when vehicles aren’t being rented. Renting to rideshare drivers creates a diversification of revenue.
- Many dealers are offering attractive rent-to-own programs for prospective rideshare drivers who are looking to own their vehicle.
The transportation industry has indeed changed forever. Luckily, car dealers and fleet owners are getting ahead of the curve and moving into shared mobility. Mobility as a Service, and Cars as a Service car subscriptions programs. Dealers will always sell cars, but it good to know they are embracing the future, and not ignoring it.