Introduction

The purpose of this publication is to shed light on a publicly hyped mode of transportation: car sharing, which has gained significant presence in major cities around the world and has received heavy media attention over the past few years. The end of personal car ownership is frequently touted, with car sharing taking over and replacing this old-fashioned ownership model. Additionally, it is high on the agenda of many automotive OEMs, who perceive it as a potential cornerstone of their future business models, geared toward becoming more of a “mobility provider” instead of a manufacturer and seller of vehicles.

However, recent developments in the industry speak both for and against a rapid advancement of this mobility solution. While the global number of car-sharing members increases significantly, major car-sharing players have removed their services from cities such as London and Copenhagen, which at first seem like obvious locations for car sharing.

In this publication, we will explore the parameters of the car-sharing business model on three levels:

1. Customer perspective

2. Car-sharing economics

3. Secondary effects for OEMs

Our in-depth analysis aims to demonstrate to what degree the service will reshape mobility, and what it will take for car sharing to become financially successful going forward. We will focus on Western markets (Europe and North America), where car-sharing services are established in most major cities. An emerging-markets perspective on car sharing, where accelerated urbanization and growing megacities shape the mobility of tomorrow, will follow in a future publication.

A world of change?

Multiple socioeconomic trends are currently at play and can potentially help the car-sharing business model:

Governments are taking action to increase sustainability and reduce emissions via changes in their mobility-related policies.
Digital technology is increasingly becoming part of our daily lives and is inherent in the way we use many products and services, including how we organize our individual mobility.
The sharing economy is gaining acceptance, particularly with millennials and younger generations, and thanks to connectivity through smartphones, it’s never been easier to gain access to assets owned by corporations or other private individuals.

These trends have fueled car-sharing offerings in recent years. This new business model has sparked enthusiastic hopes for multiple parties, from policymakers to OEMs and new mobility players.

However, recent M&A activity in the industry raises questions about the financial performance of car sharing. Moreover, consumers appear reluctant to let go of the traditional ownership model. Will car sharing change the mobility industry as we know it today, or will it only grow to become a complementary addition to the existing portfolio of mobility options?

Consumer and media attention to car sharing is a global phenomenon. Headlines such as “City car owners moving to car sharing schemes” (Sunday Times) and “Owning a car will soon be a thing of the past” (The Guardian) clearly show the media’s interest. Consumers are showing similar excitement as the global membership base of car-sharing platforms has grown from 3 million members in 2013 to close to 27 million in 2018 (see figure 1). Although our sources are aligned historically on these numbers, forecasts of future trends show wide discrepancies for the anticipated future member numbers.