Shared mobility concept gained significant importance in the global automotive segment. With the current pandemic, the shared mobility industry is also struggling as others, Anil Gupta, Technology Advisor, Magnos Technologies LLP discusses about the shared mobility industry in detail
Shared mobility has been one of the hot trend for last decade or so. Uber was founded in 2009, Lyft in 2012. At home Ola was around the same time in 2010. The trips and ride volumes quickly picked up. A lot of money poured in to grow these companies. Shared mobility offers a huge convenience compared to public transport and offers a huge efficiency for the cost of ownership compared to private ownership.
At one point – about 3-4 years ago, shared mobility became so prominent that most of OEMs started to plan business models and their vehicle models around this, and started to plan how they could get the maximum market share of this segment, as this was the segment which was supposed to make maximum dent in the growth of automotive segment. Global automotive market which has grown by about 3% CAGR rate over the last few years – is expected to decline to about 1.7-1.8% in the next 4-5 years and eventually around 1-1.1%.
And even this growth is also likely to come from the shared mobility segment requirements. Shared mobility is expected to generate three business models. Some companies have already started working on some models, while others are still under investigation. Three key models, which are expected to emerge globally are: Purpose-built vehicles for mobility on demand Vehicle-as-a service Contract manufacturing The projection has been that shared mobility would have consumed anywhere between 12-15% of the total vehicle productions globally by 2030.
However, post Covid world appears to have put a break on all this growth. Uber is making 70% fewer trips in cities hit hard by the coronavirus. People are spending much lesser, may be to the range of 30-40% compared to pre-covid times on shared rides. Or car sharing services. In 2019, Uber lost $8.5 billion, and Lyft $2.6 billion was predicting to be profitable in 2020 and 2021, but COVID is making it harder to become profitable.
So, where does it take, one of the erstwhile hottest trend, the shared mobility now ? Are the days of shared mobility over now ? Would the days of growth ever return ?
Off course Auto industry will revive, and it is clear that in short term, the revival will be driven by small, personal mobility, private segment. But how does long term prospects appear?
These are the important questions running in the mind of every stakeholder of shared mobility – the new age tech companies, the OEMs, and all adjacent segments like suppliers and partners. The concrete answers are not available now. World is still struggling with Covid. The 2nd wave is still in full swing. Lockdowns, masks, social distancing are still the talk of the town. And this situation is likely to continue for couple of quarters more. We need to watch out, how things evolve from there. Does world come to normal way of dealing ? Are people comfortable resuming hand-shakings, sharing personal spaces around… How and when. We have to wait and watch!!
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