Tag: vehicle-sharing

Following the rapid development of mobile communication technology, car sharing, as a new transportation option, has taken advantage of phenomenal growth in recent years.

Compared with leasing, the unique characteristics of car sharing mainly come from two aspects. First, the expense is calculated in a smaller unit of time, namely per minute or hour, while the unit of a leasing period is generally day or month. This feature generates a pooling effect — one shared car can serve several customers in a single day. Second, when using shared cars, customers are only charged by either a per-unit-of-time price, per-unit-of distance price, or both.

Operating costs, such as gasoline, parking, and maintenance, are all born by car-sharing service providers. Because of the economic benefits and convenience, nowadays, there is a trend that an increasing amount of customers take car sharing as a new way for transportation.

In recent years, some manufacturers, such as Daimler and BMW, have launched their car-sharing programs (i.e., Car2Go and ReachNow) to generate profit in this new business area.

Due to the existence of the pooling effect, car sharing is also viewed as a green and more sustainable way for transportation and has received more attention from governments and environmentalists.

The rapid development of modern vehicle industry makes the number of car ownership increase in an unprecedented level, which at the meantime, leads many big cities to suffer severe urban problems, such as air pollution and congestion, especially in areas with high population density.

With the aforementioned advantages, car sharing is seen as a promising alternative to solve such problems. From the view of supply chain management, however, the introduction of car sharing brings two well-known effects— the cannibalization effect and the market expansion effect.

When the car-sharing service was introduced in the market, customers, who originally wanted to buy cars, may choose the car-sharing service, decreasing the number of car owners. Since one shared car can satisfy several customers’ needs, this cannibalization effect tends to reduce the total number of vehicles. On the other hand, the appearance of car sharing also implicate the market expansion effect. Customers, who originally do not own cars, may find this new business model attractive and become members of car-sharing programs, which expands the market.

Hence, this market expansion effect tends to increase the total amount number of vehicles. As a consequence, the purpose of the paper published by Soft Computing (Springer) and written by Dr. Hua Ke, Dr. Shiwei Chai and Dr. Rong Cheng, is to examine: How does the introduction of car sharing have an impact on the original distribution channel? When does the cannibalization effect dominate the market expansion effect, so it reduces the total number of vehicles, and when does the opposite happen?

According to them, the introduction of car sharing does not always reduce the total number of vehicles and is not always environmentally convenient. Particularly, the optimal production volume decreases in the car-sharing market only if transportation needs and cost production are below some thresholds, and the market size is bigger than a threshold. Otherwise, the manufacturer has an incentive to produce more vehicles for a bigger profit. The intuition is that the higher transportation need implies a weaker pooling effect which makes the market expansion effect dominate the cannibalization effect and, therefore, increases the vehicle quantity.

The paper also find that the retailer always incurs loss. When providing the car-sharing service to its members, the manufacturer competes with the retailer directly in the same market. As a result, the competition makes some car owners deviate to car-sharing members which decreases both retail price and sales volume in the retail channel, so it makes the retailer worse off. For the manufacturer, by providing the car-sharing service, he can earn more profits than he does in the no-car-sharing market if the market size is bigger than a threshold. This result is consistent with the practices in reality that many car-sharing service providers operate in an area with high population density.

When the manufacturer determines to introduce car sharing, he gains profits in two channels: by wholesaling cars in the indirect channel to derive sales profits and by providing the car-sharing service through the direct channel to generate operating income.

By introducing the car-sharing service, the manufacturer has an incentive to both reduce production volume and maintain a high service level, which is helpful for alleviating some urban problems, such as air pollution and congestion. This finding may shed some light on how and when the car-sharing program should be introduced to effectively improve urban transportation.

The governments should carefully promote the development of car sharing, since in some cases this new business model may even encourage the manufacturer to raise its production volume.

By Horacio de la Fuente, Editor www.sharedmobility.news 

Recently, researchers from the University of Oxford and Tel Aviv University, Niahn Akyelken, David Banister y Moshe Givoni, published an article on the academic journal “Sustainability” regarding shared mobility in London. In the article, researchers, analyzed the sustainability implications of shared mobility and the need for new approaches to governance. They used a qualitative study of car sharing in London to examine the ideas, incentives, and institutions of the key actors involved in this sharing sector.

The increased efficiency in the transport system in London has played a key role in reducing the environmental emissions per capita in the city. While car ownership is reducing, the alternatives to car use and car ownership are increasing (e.g., car sharing, bike sharing, and ride sharing services). Among these services, the market for car sharing (i.e., car clubs as defined in the UK) has become one of the largest in Europe since they were introduced into the London transport strategy in 2003. The local authorities consider car sharing as playing an enabling role in achieving the Mayor’s target of reduction in car use and car ownership in London.

In the UK, car clubs are defined as formal car sharing schemes provided by a third party operator (for-profit or not-for-profit)

The governance system of London is significantly complex due to its decentralised decision-making process and the management and ownership structure of its roads

Considerable shifts have taken place in the UK transport policy over the past few decades. The underlying Anglo-American philosophy has resulted in a market-based approach being adopted through the deregulation of transport and the private operation of most services. The role of the public sector has been limited to providing a broad regulatory framework, and intervening where the market is not effective (e.g., through subsidy and additional service provision). The recent policy agenda has recognised the need to manage demand instead of meeting demand . Increasing road space will not resolve the transport capacity and congestion, as it is likely to lead to higher levels of demand. One of the most effective policy options in London has, thus, become to reduce the need to travel and car use

Car sharing has long been recognised as part of the transport strategy in London. At the initial phase of the research, there were only four key market players in the car sharing industry in London. There are currently eight car clubs, with around 193,500 members, and several other ride-hailing and peer-to-peer car sharing services.

It is possible to suggest that the historical shifts in the transport policy in London reveal the responsiveness of the local transport provision to sustainability goals in an innovative way. The policy agenda has consistently identified the negative impacts of car ownership as a key transport policy issue and ambitious policy targets have been set with stringent policy measures to address the negative impacts of motorised transport.

The car sharing market has peculiar characteristics: it is in the hands of the private sector with strong dependence on the local authorities. “To run a car sharing scheme, you need an operator and you need a city … It is about public-private partnership and working together,”

Finally, the most important change in terms of market dynamics is the reorienting of the focus of the market. “[For the first time the] car industry is now trying to understand how people are using their vehicles … something they never had to deal [with] before and they are finding it really difficult.” It is believed that the buy-and-sell manufacturing model is soon to disappear, as can be observed in the large car manufacturers that are beginning to promote themselves as mobility providers

Since 2013, the market has significantly expanded in terms of the number of providers (i.e., operators) and the range of products has become particularly wide. The existing players have started providing one-way floating schemes and electrical-vehicle-only schemes. New players have entered the market offering peer-to-peer car sharing schemes.

In line with this trend, the concept of ‘mobility as a bundle’ (i.e., integration mobility options into a package) has also become evident in the discourse. Specifically, the perceptions of the synergies between different mobility options, including bike sharing and car sharing, as explained above, seem to have materialised in the Carplus re-identifying itself as the CarplusBikeplus

The future of shared mobility is, therefore, not only a matter of collaboration between institutions, but of having a clear vision about what constitutes the most efficient and sustainable transport mix for a city that best serves its people.

by Salvatore Moccia PhD.

Recently, researchers from the Escola Politécnica da Universidade de São Paulo, Claudia Soares, Nicolas de Salles, Fernando Tobal, José Quintanilha, published an article on the academic journal “Sustainability” regarding shared mobility. In the article, researchers, provide an up-to-date and well-structured review on the area of shared mobility to researchers and practitioners of the transport sector. Here there are some of the key issues.

In a wider understanding, shared mobility can be defined as trip alternatives that aim to maximize the utilization of the mobility resources that a society can pragmatically afford, disconnecting their usage from ownership.  Then, shared mobility is the short-term access to shared vehicles according to the user’s needs and convenience. 

The present literature review on shared modes of transportation has discovered that the introduction of these modes alone will not solve transportation problems in large cities, with elevated and growing motorization rates. However, it can among the strategies employed to help alleviate the problems caused by traffic jams and pollution by reducing the number of vehicles in circulation, congestions, and the urban emission of polluting gases. Thus, the implementation of shared mobility schemes offers the potential to enhance the efficiency, competitiveness, social equity, and quality of life in cities.

The future of urban mobility is the integration of on-demand multimodal services that may be enabled and accessed through digital platforms that suppress the need for multiple tickets and payments, optimize transport mode choices, and provide access to real-time journey information and weather conditions.

According to the UN Habitat III, private vehicles remain parked about 95% of the time, and when they are moving, their average occupancy rate is well below 2 persons per car, despite the fact that private cars in general have 4 seats for passengers and the driver. In 2007, the average occupancy rate was 1.8 persons per car in Eastern European countries and 1.54 in Western countries. In 2017, in the USA the average occupancy rate was about 1.5 person per car.

Innovative mobility initiatives such as electromobility, autonomous and connected vehicles, and shared modes can transform the transport sector, supply the foundations for sustainable growth, and become urban travel controlled, resilient, and convenient.

The recent popularity experienced by shared mobility services is due to advances in technology (mainly smartphones, positioning systems, and mobile payment), economic changes, and social and environmental concerns related to vehicle ownership and urban living.

The main reasons for users to adopt shared mobility schemes:

• Financial reasons: The shared mobility service is more economical for users because it is less expensive than acquiring and maintaining a vehicle. Using shared transportation modes allows one to save money for other activities due to fair prices and, usually, free parking.
• Convenience: Ease of use and convenient access to the service. Services aim to facilitate daily routines and offer increased parking spaces, flexible vehicle use, reduced liability, and simplified fare models.
• Lifestyle: This service associates the inherent pleasure of using a private vehicle with the feeling of being engaged in a community with other users. Easy-to-understand symbols associated with shared modes, such as a uniform fleet of vehicles (preferably electric) identified by special paints or adhesive, can generate a sense of belonging. Thus, users want to have contact with others while simultaneously differentiating themselves.
• Sustainability: Environmental concerns (eco-friendly service) are considered to be important for improving quality of life.

Final considerations

In recent years, much controversy has been generated in terms of regulating technologies and services related to shared mobility modes, in particular about transportation network companies (or on-demand ride services) that operate resourcing and/or ride splitting services.

Such issues emerge due to an increasing time gap between innovation development and regulatory responses, which pressure policy-makers and local authorities to find a breakeven point among the administration, regulation, and control that enable disruptive innovations in urban mobility to be integrated into transportation systems.

In turn, transportation users are increasingly demanding in terms of reliability, flexibility, availability, comfort, and cost of their transport mode choices.

Despite the fact that on-demand ride services are the modality of shared mobility that generate most of the media attention, it doesn’t mean that other shared modes are irrelevant. On the contrary, in large urban centers there is space for many mobility options, which can operate in a complementary way rather than as competitors, improving the transportation supply and expanding the range of users’ choice.