General Motors and Holden believe ride sharing holds the key to its future.
The American brand's evolution of its connectivity and autonomous driving technology hold the key to unlocking the potential revenue growth in the more than 5 trillion kilometres travelled in the US alone every year.
Rather than take a lump sum on each vehicle sold, shared mobility allows the company to create a second revenue stream by providing ride sharing for people who don’t own a car.
While GM says it will still focus on selling cars, it predicts that in large global urban areas there will be a shift towards having less vehicles on the roads, but with kilometres travelled per person increases.
To that end GM and Holden have invested in Maven, a car-sharing service that allows Uber drivers to rent a car rather than purchase one outright.
Speaking to media in Detroit, GM president, Dan Ammann, explained in detail: “In the US every year there’s 3.2 trillion vehicle miles travelled, of that, about 0.1 per cent are accounted for today through shared mobility. What that means is 99.9 per cent of people are still driving their own cars… and even if it (shared mobility) grows 100 times bigger than it is today, it’s still only 10 per cent of total miles travelled.”
“We decided as a company that we need to be at the forefront of this.”
However, the current cost of shared mobility services is double that of traditional car ownership and is not yet the value proposition it needs to be. Although that could soon change.
“An Uber or Lyft [competitor ride sharing services] here costs a couple dollars a mile, the cost of owning your own car is somewhere between 50 cents to a dollar a mile. So, shared mobility is relatively expensive and that’s why it only makes sense for people who live in cities.”
“In order to really unlock it, we need to get the cost of shared mobility down and that’s where autonomous gets pretty interesting because it really changes the economics of the business.”
During our time with Ammann yesterday, TMR learned that GM predicts we’ll see autonomous cars in its Maven fleet soon. The substitution of driver with computer would see the cost per kilometre drop below the traditional cost of owning a car.
Autonomous ride sharing services will also increase the number of kilometres travelled.
“While the total number of cars on the road might go down – it probably will over time – the number of miles travelled probably goes up. Think about how we have availability of transportation for people who can’t drive today [such as] the elderly, children and the disabled,” he said.
GM’s Maven has, in part, been rolled out to Holden Australia, although for the moment ‘Maven Gig’ remains a service for Uber drivers to rent a vehicle. However, Ammann is looking towards the bigger picture.
“We want to redefine the future in Australia as well, and make sure that the team on the ground at Holden is not only viewed as but is in substance redefining that. So, think about Maven and we’re the only car company doing something like that that I’m aware of down there. Think of OnStar [GM’s connected services which is slated to debut for Holden in the near future], we’re first to market with an offering like that down there,” Ammann said.
According to GM director of global communications, Vijay Iyer, it is the integration of all of GM’s connected technology coming to Australaia – such as OnStar and Maven – that will give Holden the edge over competitors such as established player GoGet Car Share.
“Now with the technology we have in our cars you don’t need to do a key swap because you can use connectivity and an app to access vehicles, to share a key,” said Iyer.
“We can [during the week] deploy Sparks and smaller vehicles, and when we can see on the weekend there is a need for bigger vehicles we can put Tahoes, Escalades [large SUVs] and other cars in. Plus, every car comes with OnStar 4G LTE and the ability to plug in a phone and use features such as Apple CarPlay.”
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