Corporate car being replaced by sharing and business mobility

The cost effectiveness of corporate car sharing will make it a popular option for companies around the world.

The cost effectiveness of corporate car sharing will make it a popular option for companies around the world. In Europe, one report estimates the industry to grow at a CAGR ofLeasePlan more than 80% between 2015 and 2019.

LeasePlan Belgium is launching a Mobility Card that organizations can issue to employees, providing them access to a wide range of business travel options, including car, train, tram, bus, bike share, shared vehicles, parking as well as electric charging.

A reduction in the corporate car sharing fleet represents an important saving for companies. Dealing with a system such as the one developed by LeasePlan Belgium also minimizes administration costs. The platform “registers all business mobility costs incurred and specifies all transactions on one collective invoice”.

Also in the corporate car sharing area, Bayer’s mobility project that introduced car sharing from DriveNow to employees more than a year ago is now bringing car2go into the mix. The company’s mobility program is being expanded to its operations in other countries.

OEMs prepare for changes in mobility

Ford reaffirmed it is working on parallel paths preparing for self-driving vehicles and sharing.

Ford reaffirmed it is working on parallel paths preparing for self-driving vehicles and sharing. Bill Ford: “There’s no question our business model will look very different in the future than it does today.” Ford added: Automakers that figure out a future with fewer auto sales and more car sharing will succeed, and those that ignore it do so at their peril.

Multimodal urban mobility

Increasingly, we are reading about urban residential development projects that do away with parking facilities for condo owner

Increasingly, we are reading about urban residential development projects that do away with parking facilities for condo owners. A few weeks ago, a Washington developer, in exchange for avoiding the creation of numerous parking spaces, agreed to provide free car-share or bike-share memberships to unit owners for a period of five years. Further, the development will install an electronic billboard in the lobby showing arrival and availability information for nearby forms of transportation, updated in real time.

The urban mobility ecosystem is becoming increasingly multimodal. Another example of this: Los Angeles Metro partnered with ZipCar to increase the number of car sharing locations on transit lines.

Uber: 5 years later

On its 5th anniversary, Uber is present in more than 300 cities worldwide.

On its 5th anniversary, Uber is present in more than 300 cities worldwide, has hundreds of thousands of drivers in 57 countries and has a valuation that is pegged between $40 and $50 billion.  Uber also announced last week that it is making close to 1 million trips daily in China alone.

The future of vehicles and insurance: a hot subject at the upcoming 
Insurance-Canada.ca Executive forum

As vehicular technology and mobility business models evolve, numerous industries are assessing how the changes expected in the coming five to ten years will impact their operations. The insurance industry is no exception.

As vehicular technology and mobility business models evolve, numerous industries are assessing how the changes expected in the coming five to ten years will impact their operations. The insurance industry is no exception.

Over the last two years, the Insurance-Canada.ca Executive Forum has addressed the impacts of vehicular automation and changes in mobility of people and goods. This year’s event, scheduled to take place in Toronto on August 31st 2015, will not be any different.

The Executive Forum is a high-level event dedicated to helping P&C insurance industry executives understand the likely impacts of technological change on the industry over the coming decade.

At this, the third edition of the Executive Forum, Catherine Kargas, will lead a panel of political, regulatory and automotive technology experts to explore how upcoming changes to regulations and technological improvements will impact auto insurance.

The panel will be composed of:

  • Kathryn McGarry, MPP for Cambridge, Ontario and Parliamentary Assistant
    to the Minister of Transportation
  • Bob Burrows, CEO, G4 Apps Inc., leading APMA’s Connected Vehicle Program 
  • Derek Kuhn, VP Sales, BlackBerry Technology Solutions

In preparation for this discussion, Patrick Vice, Partner at Insurance-Canada.ca, interviewed Catherine Kargas for her views on the subject. Following is an excerpt of that

P. Vice: You have put together quite a panel on the future of vehicles and insurance.  What are some of the expertise the panelists are bringing?

C. Kargas: I believe we have brought together a group of key individuals from the political, regulatory and technology spaces.  Kathryn McGarry will be addressing the issue of autonomous and connected vehicle changes from the perspective of the Government of Ontario and the Ontario Ministry of Transportation. Derek Kuhn and Bob Burrows, two of Canada’s leaders in the space of automotive autonomy and connectivity, will discuss how the technology is evolving.

P. Vice: 10 years is a long time in the world of technology.  What do you think are the most surprising trends you see over that period?

C. Kargas: The most surprising trend for me is how quickly things are changing, how fast the technology in the automotive autonomy space is progressing.

The technological advances of the last few years combined with the rise of new business models in the mobility space have already resulted in some disruption. One need only think of Uber. Just a few years ago, no one had heard of this company. Today, Uber has a valuation approaching of $50 billion, annual gross revenues of $10 billion, more than 160,000 drivers and a presence in hundreds of cities around the world. We are seeing only the beginning of the disruption. Today, this disruption is being felt by taxi drivers and others competing for a share of the urban mobility pie.

A number of trends are combining to create the perfect storm in the mobility space. These trends include increasing urbanization, growing congestion and pollution levels as well as an aging population and a relative disinterest in driving demonstrated by younger adults. Combine these trends with a high cost of ownership and operation of a personal vehicle that is utilized only 4% of the time and you have an ecosystem that is ripe for change.

P. Vice: You work with insurers and brokers.  How ready are they for some of the changes you see coming?

C. Kargas: We brought up changes in mobility and their implications for insurance at the 2013 Executive Forum. The attendees were essentially in two camps: those who thought I was talking about a science fiction experiment and those who believed that change would happen after they retired.  At the 2014 Forum, we had no naysayers but the conversation was limited because the insurance community had not quite understood the implications of this technology.

Many of the Canadian insurance executives that I have been in contact with understand that the technology is evolving and that complete vehicular autonomy is a reality they will need to face. However, few in the industry have their heads wrapped around how they need to prepare for the upcoming changes. This is understandable given the number of unknowns.

In fact, many insurers have not yet determined how they will adapt to the changes that are already part of the mobility offering, including ride sharing and the various forms of car sharing. Unlike several US carriers that are offering ride-sharing insurance, to my knowledge, no Canadian carrier is currently offering such a product.

P. Vice: Last year, Don Light from Celent showed a roadmap to the end of automobile insurance.  Are there any good news scenarios that could balance that?

C. Kargas: There have been many doomsday predictions concerning auto insurance. I believe that insurance in the mobility space will change dramatically but there will continue to be opportunities for insurers that understand the changes and are prepared to evolve to remain relevant.

Assuming fully autonomous technology is commercially available within the coming decade and the regulations enabling their full operation are in place, it will take time before the millions of vehicles on Canadian roads are replaced. During this “hybrid” period, motorists will continue to require insurance. As more autonomous features are introduced, the vehicle will be doing more and more of the driving. This period will be a challenging one. Despite the fact that auto manufacturers will be positioning these features as driver “assist” and insisting that drivers remain vigilant even while the vehicle is assuming the driving function, the growing number of in-vehicle distractions will generally result in motorists paying little attention. This may result in an increased number of collisions. Further, the fact that motorists will be undertaking less of the driving will result in motorists’ skills erosion. Consequently, I suspect that the transfers between human and machine will not go as smoothly as some in the auto industry may hope. Auto insurance policies for semi or highly autonomous vehicles will likely involve two rates: one for kilometers driven by the motorist and a lower rate for kilometers driven by the vehicle itself.

Moreover, despite the fact that the objective of using fully driverless vehicles is to significantly reduce the number of collisions resulting in over 1.2 million deaths annually, collisions will continue to take place. No manufacturer or technology provider can guarantee the end of collisions.

As we move into the shared, driverless mobility ecosystem, new risks will emerge and these risks will present opportunities for insurance companies that are informed, involved and willing to adapt.

Ridesharing news

Shuddle, a new ridesharing service launched late last year, is positioning itself as a “kid-friendly” ridesharing service.

Uber CEO Travis Kalanick shared some revenue figures at a recent conference that indicate that ridesharing is more than replacing some of the taxi services. Kalanick stated that the taxi market in San Francisco is approximately $140 million per year and that Uber’s revenues in this city are running at $500 million per year.  Is ride sharing resulting in lower vehicle ownership? Lower usage of transit and taxi services?

In the US, it appears that parents are increasingly using Uber, Lyft and other ridesharing services to provide transportation for their kids. Shuddle, a new ridesharing service launched late last year, is positioning itself as a “kid-friendly” ridesharing service.

Uber, UberX, UberPool, Uber delivery services and now UberCopter: a helicopter service for the wealthy.

Visionary politicians

any of the mobility options that are in place today require champions with vision to succeed.

Many of the mobility options that are in place today require champions with vision to succeed. Garcetti, Mayor of LA, is one of those visionary champions. He’s launching the city’s first-ever sustainability plan and hiring an advisor for ridesharing and robotic cars.

Photo: Flickr user Eric Garcetti

Auto OEMs and their foray into mobility services

Increasingly, auto manufacturers, cognizant of the fact that demographics, increasing urbanization and its effects as well as increased mobility options represent a threat to their business model, are vertically integrating forward into the mobility space.

Increasingly, auto manufacturers, cognizant of the fact that demographics, increasing urbanization and its effects as well as increased mobility options represent a threat to their business model, are vertically integrating forward into the mobility space. Ford’s 29 mobility projects launched earlier this year are a perfect example. One of these projects is Ford’s Dynamic Social Shuttle allowing users to order shuttle rides.

9a321170-da32-11e4-ab90-516a7d968d09_Ford-Dynamic-Social-Shuttle
Ford

 

Another Ford project that is getting publicity in recent weeks is its Go!Drive UK car sharing project where EVs and ICE vehicles are being provided to users.

Audi launched its on demand car sharing service in the US. This is a program offering daily rentals of Audi vehicles. The company has indicated that it will soon be launching its Audi at home program (available in select premium condo complexes).

Uber’s driverless car

In the last few days, Uber’s driverless vehicle has been spotted in Pittsburgh

In the last few days, Uber’s driverless vehicle has been spotted in Pittsburgh. It “is part of Uber’s early research efforts regarding mapping, safety and autonomy systems”. Will Pennsylvania become the next state to introduce regulations allowing the testing of driverless vehicles to accommodate Uber?

 

Photo: Ethan Lott

A sign of the time

Calgary city planners have given their blessing to the city’s first condo tower built with NO parking spaces.

Calgary city planners have given their blessing to the city’s first condo tower built with NO parking spaces. Car sharing is a rapidly growing trend around the world, and particularly in Canada.  Calgary and Vancouver lead Canada’s push to avoid car ownership.

Car sharing users are expected to reach 650 million by 2030. Considering that shared driverless vehicles will certainly be available by then, this number may be underestimated.

 

Image : GEC Architects