Car Sharing for Intercity Transportation

Vehicle on Demand & Mobility on Demand

When looking in the long-term future, a great unknown variable for car usage in the intercity segment is the development of car sharing models. Considering the ongoing urbanization, this is particularly relevant for new urban mobility business models. It is forecasted that globally, ownership increasingly shifts towards fleet operators [1], advancing Vehicle on Demand and Mobility on Demand models. [2] Expecting a decrease in privately owned cars, this mobility mode also loses importance for intercity transportation. Sharing Mobility models are currently discussed as a revolution for urban transportation, but the impact on intercity mobility is hardly mentioned.

Mobility on demand providers also offer long-distance trips. However, conducting intercity trips with taxis oder ride-hailing providers is generally more expensive than using alternatives. [3] With free floating vehicle on demand providers like Share Now, customers are not allowed to make intercity trips at all, since they are bound to rural parking areas. [4]

Carpooling

Another business model for long distances is commercial carpooling. Monchambert (2020) found that there is a strong preference for driving solo over taking carpooling in one’s car. Carpooling as a driver as well as a passenger yields a higher Value of Travel Time than driving solo, by intercity bus or by train. This applies for high income passengers more than for those with lower income and for young consumers more than for older people. This low perceived comfort when carpooling led to a decreased utility per minute in the vehicle compared to other modes. This explains the low share of travelers using carpooling for long-distance trips, despite recent trends towards car-sharing. Also, the trend towards new ownership models alter the market of carpooling as well. Providers like blablacar need to rethink their business model, since it relies on customers’ own cars, which will diminish over time. [5]

Car Rental

The only currently available Vehicle on Demand model that is applicable for intercity transportation is car rental. With car rental providers, vehicles can be picked up in one city and brought back in another. Comparing prices for intercity trips of car rental providers with other mobility modes such as intercity bus or carpooling, it becomes evident that renting a care costs a multiple of its inexpensive alternatives. Also, car rental currently relies on a few stations the providers offer per city, leaving customers with the first mile / last mile problem, like with intercity buses. This model thus does not appear to be a tailored solution for automotive intercity transportation, being mostly targeted at business people and vacationers, mostly offering stations at airports. The optimal Vehicle on Demand or Mobility on Demand business model for intercity transportation is yet to be created, in order to serve demand in the long-term future, once ownership models of cars are altered. [6] [7]

Future of Intercity Car Sharing

There are certain requirements of such an offer must fulfill in order to provide extra value for intercity travelers: a high density of vehicles should be guaranteed, so that the first - / last mile problem is minimized. Optimally, it should be possible to park the vehicles anywhere, like it is the case in current free floating urban car sharing offers. A high density also enables a high flexibility for customers, so they can reserve and use vehicles spontaneously. Furthermore, offering an electrified fleet is advantageous for environmental reasons and therefore more appealing to pro-environmental customers, while reducing political exposure. However, providers must then rely on increasing reaches and a growing infrastructure of charging stations. Finally, an intercity car sharing model must undercut prices of competitors, i.e. typical car sharing providers. This can be achieved by maximizing vehicle utilization, i.e. putting a price on actual usage times or distances. Currently, car sharing providers typically charge daily fares, not allowing for several customers per vehicle per day.

Sources

[1] Schiller, T. (2020). Future of Automotive Sales and Aftersales: Impact of current industry trends on OEM revenues and profits until 2035.

[2] Schmidt, A., Reers, J., Irwin, B., & Loes, H. (2020). Unlock the value of mobility services: Turning business models into profits. Accenture. 6. https://www.accenture.com/_acnmedia/PDF-135/Accenture-Unlock-Value-of-Mobility-Services.pdf

[3] Uber. Retrieved: December 09, 2021 from https://m.uber.com/looking

[4] Share Now. Retrieved: December 09, 2021 from https://www.share-now.com/de/en/faq/parking/#can-i-drive-to-another-city

[5] Monchambert, G. (2020). Why do (or don’t) people carpool for long distance trips? A discrete choice experiment in France trips? A discrete choice experiment in France. Transportation Research Part A: Policy and Practice, 132, 911–913.

[6] Sixt. Retrieved: December 09, 2021 from https://www.sixt.de/#/

[7] Avis. Retrieved: December 09, 2021 from https://www.avis.de/#