Most people approve of carsharing and ride-hailing. Will these trends succeed in improving mobility in urban and country areas?
By 2050, two thirds of the world’s population will be living in dense metropolitan areas. In order to bring these huge numbers of people from A to B, the mobility options in major cities must undergo radical change. Ideally, in the future the various modes of transport will no longer compete with one another, but instead increasing digitization will dovetail their use in intelligent and innovative ways. That will enable seamless travel – and in the best case everything will be smoothly arranged using an app. Individual mobility will increasingly follow the motto “use instead of own.” City-dwellers in particular are looking for flexible alternatives. A flexible mobility mix is emerging: carsharing and ride-hailing are supplementing the classical options and have long been a feature of everyday life in the world’s metropolitan areas. For this reason, the IAA Mobility 2021 will focus on holistically connecting the entire mobility chain.
Carsharing in particular has shaken up the market for new mobility solutions during the last ten years. It’s a well-known principle. Use the app to find a car, reserve it, climb in and drive off. After the trip, you park the car either at a “station” or somewhere within the business area. Interest in carsharing continues unabated. At present, around 2.3 million Germans use the services of more than 220 providers offering 25,000 vehicles at 840 locations. It’s hard to believe that Karlsruhe is now the German city with the highest density of carsharing vehicles, with 3.23 cars for every 1,000 inhabitants. Karlsruhe is followed by Munich, Hamburg and Berlin. First in the league of free-floating providers is Share Now that was formed by the fusion of car2go and DriveNow. It is followed by the competitors SixtShare, WeShare from VW, Miles Mobility and Book-n-drive. The ranking of station-based carsharing is headed by Stadtmobil, ahead of Cambio. The number of combined systems continues to increase, which offer both station-based and free-floating carsharing. The largest providers offering both types are Stadtmobil and Book-n-drive.
According to the German Carsharing Association (bcs), one carsharing vehicle replaces a number of private passenger cars depending on the region under study and the variant in use. The peak figure is achieved by station-based and combined carsharing offers in inner cities. And what effect does carsharing have on car ownership? Up to 80 percent of customers of station-based carsharing or combined systems no longer keep a car of their own. In a user survey by the BCS the number of cars owned by 3,500 carsharing households fell by nearly 20 percent within twelve months of joining the scheme. The survey also showed that owners disposed of far more private passenger cars in the twelve months before registering with a carsharing scheme than they did after they started using it. Over 50 percent of new customers had got rid of their vehicles before signing up. Nonetheless, the sector is well aware that carsharing is still a niche product and reduces traffic only to a minimal extent.
There is no sign that Germans are about to give up their cars, according an analysis by the Center Automotive Research (CAR) at the University of Duisburg-Essen. The current business models do not really work, says the author. One major drawback is that carsharing often fails to attract customers because there are very few offers reaching beyond the city limits. At the same time, the number of private cars in metropolitan areas continues to rise. One study by the business consultancy Kearney openly questioned the notion that carsharing reduced the amount of car traffic. It found that only five percent of Germans see carsharing as a serious alternative to running their own car. The schemes are mostly felt to be a useful option rather than a total replacement. The author calculates that rental cars could replace two million private cars at most. The major criticism in the analysis was that only eleven towns and cities with corresponding population density fulfill the conditions necessary for carsharing services to make a profit. And the study even identifies a potential negative effect: driven by price wars, the rental fees are so low that some users are switching from local public transport or cycling to carsharing. It would therefore be important to expand cooperative projects with providers and municipalities.
In the battle for mobility customers, providers are also jostling to offer shared rides and ride-hailing. In 2020 the turnover in ride-hailing came to around 1.5 billion euros. Six million people actively use such services. The German market is expected to grow by 13 percent by 2023. In the case of ride-hailing, the user can arrange to be collected and dropped off anywhere in the city, just like a taxi service. But to maximize shuttle utilization passengers can join or leave the trip on the way, which means that the vehicle is shared by passengers with similar destinations. In the background an algorithm determines in real time the fastest and most efficient route (a) for the fleet driving continuously around the city and (b) to satisfy the passengers’ wishes. Passengers’ smartphones indicate the nearest point where they can join the vehicle, which should be within walking distance. Ideally, even door-to-door service should be possible, or changing to another mode of transport without having to wait. An additional advantage of these services is that they save users time and money in comparison with using their own car. What is more, customers don’t have to look for a parking spot, or maintain a car.
Uber and Lyft are the largest and best-known players in ride-hailing, and pioneers of what is called the “gig economy” – a new form of business in which workers are generally paid per “gig” – in this case per trip. Uber has only been able to gain a foothold in Germany in recent years. Before that the company was forced to give its business model a radical overhaul. Instead of starting as planned with private drivers or self-employed individuals, Uber now matches customers with rental car firms that employ their own drivers. The VW subsidiary MOIA, on the other hand, bases its ride-hailing concept on a fully electric shuttle fleet and employs its drivers. Its shared e-taxis have been humming their way around Hannover since summer 2018. In April last year, Hamburg became the first city with over one million inhabitants to join the scheme. The company promises that potential customers should not have to walk more than 200 meters. The vehicles are equipped with on-board USB ports and high-speed Wi-Fi for passengers to use. CleverShuttle was specifically tailored to environmentally aware city-dwellers and used only electric and hydrogen-powered vehicles. However, the company had to adjust its business model and massively scale down its activities. In Berlin the local public transport company, Berliner Verkehrsbetriebe (BVG), is operating its shared bus called “Berlkönig.” But here, too, long-term operation is not guaranteed. Alongside profitability and viability, the business model must also address the question of whether it really delivers the longed-for reduction in traffic.
Little seems to have survived of the founders’ original idea of better utilization of cars that are on the roads anyway. Studies in the US indicate that instead of reducing traffic, the private taxi alternatives are flooding cities with their fleets. Another disadvantage is that these schemes are taking people away from buses, railways and bicycles. The rideshare vehicles drive farther than people do in their own cars. A report by the Union of Concerned Scientists concludes that a trip with a ride-hailing service pushes CO2 emissions up by 69 percent. The social impact of the corporate strategy is also drawing more criticism. Uber is squeezing taxi firms out of the market, which usually pay their drivers better. The media have repeatedly painted a bleak picture of the newcomers’ miserable working conditions.
Georgetown University investigated this in a study of 40 Uber drivers: None of the drivers surveyed could explain how their wages were calculated, as the remuneration rules and the prices were constantly changing. Around 40 percent of drivers did not know if, or in what form, they were paying taxes, or whether they had to pay for their insurance cover themselves. The fact that Uber’s business model has so far not been a resounding success is partly due to having a driver at the steering wheel. Uber, which is based in San Francisco, has long been working on the vision of robo-taxis that operate around the clock, are always wide awake, and don’t need lunch breaks or rest periods. Whether customers will accept that remains to be seen.
The IAA 2021 will focus on innovative mobility in all its forms. Intelligent traffic solutions, visionary mindsets, automobiles and entire mobility chains. Everything that will shape the mobility of tomorrow and make it an experience. Be there!