5:24 pm, May 21, 2018
WITH traditional car ownership at risk from on-demand schemes, dealerships should take advantage of this growing industry and consider launching their own systems.
That’s according to Mark Thomas of Ridecell, a company that provides IT systems for manufacturer schemes such as BMW’s Ridenow and the Daimler Group’s Ride2Go.
Speaking today at CDX 2018, he said: ‘There’s a real risk of on-demand systems virtually replacing car ownership. At the moment, systems such as Uber or ZipCar for mobility are expensive, but prices are dropping and soon it will become more prevalent.”
Thomas, pictured, believes that by 2035, personal car ownership will have dropped to just 20 per cent of overall vehicles – with high-mileage users or those in more rural areas the only ones hanging on to personal vehicle ownership.
‘Just one per cent of miles today are covered in ride-sharing or car-sharing situations,’ he said. ‘By 2030, this will be over a third of miles. It’s like the change we’re seeing from physical media, such as CDs and DVDs, to streaming services like Netflix. There’s no need to actually own the asset any more.’
Thomas believes that the price of new mobility solutions will come down as technology, such as electric cars and autonomous vehicles, improves.
‘About 75 per cent of the cost of an Uber is the driver. Switch to an autonomous car and you can pass that saving on. Electric vehicles will be cheaper still. Take the driver out, take the internal combustion engine out and we can offer mobility for 25 cents (circa 19p) per mile. That’s around half the cost of traditional ownership.’
How could this apply to the traditional dealership? Thomas believes dealerships should capitalise on new technology, such as offering test drives or courtesy cars via an app, before moving towards launching their own mobility solutions – so long as there’s demand and a brand.
Dealers could also make use of their own assets. ‘Dealerships have access to service bays, new cars at wholesale prices, a fleet of used cars, and local knowledge. With these, they could start their own mobility units.
‘Chains could use their own existing brands, or create a new one, as we’re seeing with BMW and Daimler.
‘The crucial thing to remember is that the market is still in its infancy. Leverage your assets and capitalise on new business. New mobility is coming. The debate is when – not if.’
Story by Tom Wiltshire
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