The future of cars: Doing less with more
Car services and ride-sharing are going global.
At a ride-sharing panel at the recent SXSW Eco conference in Austin, Texas, the future of commuter transport looked toward two trends that threaten to change the two-cars-in-every-driveway tradition in many countries.
The battle was framed between people actually sharing cars to making car services super-efficient through smartphone logistics.
Panelist Susan Shaheen of the University of California at Berkeley said that car sharing (think Zipcar), with people borrowing cars only when they need them, is best positioned to actually take vehicles off the street. Ride sharers, she said, offer taxis with a high-tech gloss, but car sharing can ultimately replace car ownership.
Padden Guy Murphy of San Francisco-based Getaround (which also uses regular people as drivers) said at the panel that ride sharing has already taken a “micro dent” out of the more than a billion cars on the road.
“It’s a paradigm shift, from ownership to access,” Shaheen said. Ryan Johnson of Enterprise car- and ride-sharing said what really gets cars off the road is the corporate vanpools his company offers.
“It costs $900 a month to own the average car, and I think many people would rather pay a cost per mile when they need to drive,” says Jigar Shah, author of the book Creating Climate Wealth.
The second category was created by Uber, GetTaxi and Lyft, using technology designed for car services to compete more effectively with regular taxis to connect to non-professional drivers who are happy to chauffeur you to your destination.
The companies offer competing consumer apps to make reservations on the go and pay electronically or with pre-registered charge cards.
Uber, the sector leader, is now in 45 countries, including all across the U.S., Central and South America, Europe, the Mediterranean and Africa.
Another company on the move is Israel-based GetTaxi. There are more than 20,000 cabs in Israel. GetTaxi also offers its clients free Wi-Fi, and that’s a big draw in tech-oriented countries like Israel. Besides Israel, the company operates in 24 cities around the world, including New York.
Shahar Waiser, cofounder and CEO of GetTaxi, speaking in Moscow in 2012. (Photo: Hubert Burda Media/Flickr)
Lyft (the company with the pink mustaches on the front of the cars) has been cautious about spanning the globe. Though it has expanded dramatically to 30 cities, so far it’s operating solely in the U.S. “We do not have any expansion plans to share at this time,” spokeswoman Paige Thelen told From The Grapevine. The company, however, has raised $250 million for both domestic and international expansion.
Thelen is mum about international plans, but she tries to be vocal about what makes Lyft different from its competitors. “From the moment they hop into the car, passengers see how Lyft is more than just a ride,” she said. "Passengers are encouraged to sit up front and every Lyft ride begins with an introductory fist bump.”
According to Sam Abuelsamid, senior research analyst at Navigant Research, “I think what the ride-sharing companies are trying to do is expand as rapidly as possible in order to get a critical mass. That’s so that when people think of using their phone to get a ride, they might think of Uber, just as they think of Facebook or Twitter to post status updates or Instagram for photos,” he told From The Grapevine.
Abuelsamid added: “In order to really make services like Uber, Lyft or GetTaxi compelling, you want to have enough drivers enrolled so that a ride is always close by, thus passengers aren’t left waiting and inclined to go with another service.”
A Lyft customer gets into a car in San Francisco. Nearly one third of San Francisco's licensed taxi drivers have stopped driving taxis and have started to drive for the ridesharing services. (Photo: Justin Sullivan/Getty Images)
Abuelsamid thinks there’s a lot of room for competition, since it doesn’t require a huge amount of capital to set up an app and a pay system. But too many players can make it difficult. London-based Hailo recently quit operating in North America (a Toronto branch will continue under license) because the “astronomical market spend required to compete is making profitability for any one player almost impossible.”
GetTaxi said in a statement that it welcomes Uber and other competitors, because “if a rival actually enters the mobile taxi hailing market, it will only increase the pie of users, which will benefit drivers and consumers alike.”
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