Industry Insights

The Future of Shared Mobility | Tomorrow’s Journey

January 25, 2024
6 min

THE FUTURE OF SHARED MOBILITY: HOW ARE THE TRADITIONAL OEMS ADAPTING?

As shared mobility gains prominence, the response of traditional OEMs to this change becomes pivotal in understanding the future trajectory of the industry.

The growing significance of shared mobility in the automotive industry is undeniable. As urbanization, environmental considerations, and changing consumer preferences shape the way people move, shared mobility emerges as a key player in the future of transportation. It not only addresses issues of congestion and environmental impact but also caters to the evolving needs of a tech-savvy and interconnected society. This shift represents a departure from traditional ownership models, emphasizing convenient and on-demand access to transportation services. Shared mobility encompasses a spectrum of services, including ride-sharing, car-sharing, and other innovative approaches that redefine the way individuals engage with transportation.

This leads us to a central question that defines the current automotive landscape: How are traditional Original Equipment Manufacturers (OEMs) adapting to this transformative shift in the way people access and utilize vehicles? As shared mobility gains prominence, the response of traditional OEMs to this change becomes pivotal in understanding the future trajectory of the industry.



Rise of Shared Mobility

The rise of shared mobility has ushered in a new era in transportation, reshaping the way people navigate their daily lives. This includes diverse services such as ride-sharing, car-sharing, bike-sharing, and emerging models like micro-mobility solutions. Ride-sharing platforms, exemplified by companies like Uber and Lyft, connect individuals with nearby drivers through mobile applications, optimizing the use of existing vehicles and reducing the need for private car ownership.

Car-sharing services, represented by companies like Zipcar and Car2Go, offer a more flexible approach, allowing users to access vehicles for short durations without the commitment of ownership. Beyond traditional modes, emerging models such as electric scooters and bike-sharing programs contribute to the expanding ecosystem of shared mobility, offering sustainable and efficient alternatives for short-distance travel.

Several factors drive the exponential rise of shared mobility. Urbanization, marked by the increasing concentration of populations in cities, creates a demand for efficient and convenient transportation solutions. Changing consumer preferences, particularly among younger generations, reflect a shift towards access over ownership, favouring experiences over possessions. Additionally, environmental considerations play a crucial role, with shared mobility models often being perceived as more sustainable and eco-friendly compared to traditional modes of transportation. As a result, the shared mobility landscape is propelled by a convergence of technological innovation, changing societal norms, and a collective push towards more sustainable urban living.



OEMs in the Shared Mobility Era

Traditional Original Equipment Manufacturers (OEMs) face many challenges as they grapple with the evolving dynamics of the shared mobility era. One significant hurdle is the nature of traditional ownership models within these companies. The shift towards shared mobility requires OEMs to reevaluate their core business models, which have historically been centred around manufacturing and selling vehicles to individual consumers. This necessitates a paradigm shift from the traditional focus on product sales to a more service-oriented approach aligned with the principles of mobility-as-a-service (MaaS).

Adapting to the shared mobility landscape also demands a fundamental rethinking of production processes and inventory management. Traditional OEMs are accustomed to large-scale manufacturing based on predicted sales figures, but shared mobility introduces unpredictability and variability in demand. This poses a challenge for OEMs to optimize production processes to accommodate the dynamic and fluctuating needs of shared mobility services.

Moreover, the impact on traditional sales cannot be understated. As more individuals opt for shared mobility services, the demand for personal vehicle ownership may experience a decline. This shift challenges traditional OEMs to diversify their revenue streams and explore new business models that align with the emerging preference for mobility services over ownership. The traditional sales-centric approach may need to give way to strategic collaborations and partnerships with shared mobility providers, pushing OEMs to reposition themselves in the broader transportation ecosystem.

In essence, OEMs now confront the dual challenge of reorienting their manufacturing processes to suit the demands of shared mobility while navigating the broader implications of reduced reliance on traditional vehicle ownership models. The ability to adapt and innovate in response to these challenges will be instrumental in determining the future success of these businesses in the shared mobility era.



Strategies Employed by OEMs

In response to the transformative impact of shared mobility, vehicle manufacturers and dealerships have implemented a range of strategies to remain relevant in this evolving landscape. One prominent approach involves forging strategic partnerships with ride-sharing platforms. Manufacturers recognize the need to align with existing players in the shared mobility space to leverage their expertise and expansive user bases. Collaborations with ride-sharing giants like Uber or Lyft allow them to integrate their vehicles into these platforms, providing a direct avenue for users to access shared mobility services using their vehicles.

Another noteworthy strategy is the investment in mobility startups. Recognizing the agility and innovation inherent in startup culture, OEMs are increasingly engaging in partnerships or direct investments in emerging mobility-focused companies. This not only grants them access to cutting-edge technologies but also allows them to stay at the forefront of developments in the rapidly evolving shared mobility landscape.

Exploring alternative ownership models, such as subscription services, also allows vehicle manufacturers to align with the flexibility demanded by the shared mobility era. Subscription models offer customers the ability to access vehicles for shorter durations without committing to full ownership, aligning with the principles of shared mobility.

These diverse strategies reflect a recognition of the need to integrate and adapt to the shared mobility landscape. Through partnerships, investments, and the development of in-house mobility services, OEMs are actively shaping their role in the future of transportation.



Innovative Business Models

Many dealerships and OEMs have embraced innovative business models to navigate the dynamic landscape of shared mobility, catering to evolving consumer behaviours. One notable approach is the introduction of subscription services. This model allows customers to access vehicles for a set period, often on a monthly basis, without the long-term commitment of ownership. This changing landscape is driving vehicle manufacturers to offer subscription plans that include maintenance, insurance, and other associated costs, providing a hassle-free and flexible alternative for users who prioritize access over ownership.

Flexible leasing options represent another innovative business model adopted by OEMs. This approach allows customers to lease a vehicle for shorter durations, offering a middle ground between traditional ownership and short-term rentals. It caters to the preferences of consumers who seek a more adaptable and cost-effective solution, aligning with the principles of shared mobility.

Collaborative approaches, such as car-sharing initiatives have also gained prominence. Manufacturers are leveraging their existing infrastructure to create car-sharing platforms, enabling users to access vehicles on a short-term basis. This fosters a sense of community and shared resource utilization, aligning with the collaborative spirit of shared mobility.

Some OEMs are exploring the integration of mobility services directly into their vehicles. This includes features like in-car connectivity, navigation systems optimized for shared mobility, and even the integration of ride-hailing applications. By incorporating these services seamlessly into the vehicle's ecosystem, fleet providers enhance the overall user experience and position themselves as comprehensive mobility solution providers.

Additionally, partnerships with mobility-as-a-service (MaaS) providers represent an innovative avenue for traditional OEMs. By integrating their vehicles into MaaS platforms, fleet owners can tap into a broader ecosystem, allowing users to seamlessly transition between various modes of transportation, including public transit, ride-sharing, and personal vehicles.

These innovative business models introduced by OEMs underscore their commitment to adapting to the shared mobility ecosystem. From subscription services to flexible leasing options and collaborative initiatives, these models reflect a proactive response to the changing landscape of consumer preferences and the rise of shared mobility.



Technological Integration

Many companies in the automotive industry are strategically leveraging cutting-edge technology to enhance their shared mobility offerings, ensuring they remain competitive in a rapidly evolving landscape. One key area of focus is the integration of connectivity features. Modern vehicles are equipped with advanced telematics systems that facilitate seamless communication between vehicles and centralized platforms. This connectivity enables real-time tracking, remote diagnostics, and over-the-air updates, optimizing the efficiency of shared mobility fleets and ensuring a smooth user experience.

Autonomous features represent another frontier where fleet owners, dealerships and manufacturers are making significant strides. While fully autonomous vehicles are still in development, auto manufacturers are incorporating advanced driver-assistance systems (ADAS) into their shared mobility fleets. Features such as lane-keeping assistance, adaptive cruise control, and automated parking enhance the safety and convenience of shared vehicles. This integration aligns with the broader industry trend towards autonomous mobility solutions.

Data analytics plays a crucial role in refining shared mobility services. Automakers harness the vast amount of data generated by connected vehicles to gain insights into user behaviour, traffic patterns, and fleet utilization. This data-driven approach allows brands to optimize their services, improve fleet management, predict maintenance needs, and tailor offerings to meet the specific demands of users in different regions.

The development of dedicated mobility platforms and mobile applications has become a focal point in the automotive industry. These platforms serve as centralized hubs, providing users with a range of services, from vehicle reservations to in-car entertainment options. The integration of mobile applications enhances user engagement, simplifies the booking process, and fosters a seamless connection between the user and the shared mobility ecosystem.



Sustainability Initiatives

Car sharing has emerged as a practical, convenient and sustainable mobility solution for people around the world, especially for urban dwellers. With the rising environmental concerns, automakers are actively prioritizing sustainability in shared mobility notably through the development and integration of electric and hybrid vehicles and car sharing initiatives. This strategic focus aligns with the global push for environmental consciousness, as OEMs invest significantly in eco-friendly options to reduce carbon emissions and contribute to a sustainable transportation ecosystem. The deployment of electric vehicles in shared mobility services not only addresses environmental concerns but also emphasizes the imperative for increased energy efficiency. Hybrid vehicles, combining traditional internal combustion engines and electric power, provide a transitional solution with reduced emissions while ensuring compatibility with existing infrastructure. Many automakers are adopting eco-friendly practices in manufacturing, utilizing sustainable materials and energy-efficient methods. Beyond vehicle production, initiatives include smart charging infrastructure, responsible end-of-life disposal practices, and partnerships supporting green and energy-efficient transportation solutions. In essence, these sustainability initiatives underscore automakers' commitment to a more eco-conscious future in shared mobility.


Future Outlook

The future of shared mobility holds significant promise and transformation. Several key insights and trends offer a glimpse into the trajectory of shared mobility and the evolution of traditional business models within this dynamic ecosystem:

1. Integration of Autonomous Vehicles:

The future of shared mobility is likely to witness the increased integration of autonomous vehicles. Automakers are investing heavily in developing autonomous capabilities, anticipating a shift towards self-driving shared mobility fleets. This evolution aligns with the broader industry trend towards enhancing safety, efficiency, and accessibility.

2. Multimodal Solutions:

Shared mobility is set to evolve into more comprehensive multimodal solutions. Traditional OEMs, in collaboration with tech companies and urban planners, are expected to offer integrated platforms that seamlessly connect various modes of transportation, including public transit, ride-sharing, and personal vehicles. This holistic approach aims to provide users with efficient end-to-end mobility solutions.

3. Electric and Sustainable Fleets:

The emphasis on sustainability is projected to intensify, with a growing focus on electric and eco-friendly shared mobility solutions. Fleet providers and automakers will likely expand their electric vehicle offerings, contributing to cleaner and greener urban transportation. Sustainable practices, from manufacturing to end-of-life disposal, will become integral to OEM strategies.

4. Enhanced Connectivity and User Experience:

Connectivity will remain a driving force in the future of shared mobility. OEMs will continue to enhance in-car connectivity, offering advanced infotainment systems, seamless navigation, and personalized services. User experience will be a key differentiator by leveraging technology to create intuitive and user-friendly interfaces.

5. Mobility as a Service (MaaS) Platforms:

The evolution of shared mobility will see the proliferation of Mobility as a Service (MaaS) platforms. Traditional OEMs are likely to collaborate with these platforms, offering their vehicles as part of comprehensive mobility solutions. This shift positions these brands as integral contributors to the broader urban mobility ecosystem.

6. Regulatory and Policy Influences:

Future developments in shared mobility will be influenced by regulatory frameworks and government policies. Traditional OEMs will need to adapt to evolving regulations related to emissions, safety, and data privacy. Proactive engagement with policymakers will be crucial for OEMs to navigate the complex regulatory landscape.



To conclude,

Despite multifaceted challenges, including shifts in business models and technology integration, traditional OEMs see opportunities to diversify revenue, forge partnerships, and innovate in shared mobility. The future holds exciting prospects with autonomous vehicles, sustainable fleets, enhanced connectivity, and the evolution of Mobility as a Service (MaaS) platforms. Automakers, recognizing the importance of adaptation, are poised to play a central role in shaping this future, emphasizing electric and sustainable practices and prioritizing connectivity and user experience. This transformative journey signifies a shift from a product-centric to a service-oriented mindset, where shared mobility is actively shaping the future of transportation, leading the way into a dynamic and transformative era in the automotive industry.

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Rahil Gupta

Senior Marketing Manager

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