One of the most fascinating aspects of the connected car is the way in which it enables new business models as well as new products and services.
I’ve written elsewhere about car sharing so I won’t rehearse all the issues here. It’s provided by a wide range of companies. Some are conventional rental companies who are using connectivity to develop new service models; ZipCar, probably the best known car sharing company, is owned by Avis. Here the cars are owned by a company and rented out on a time basis. Car sharing is just a bit more flexible, and a bit less labour intensive, than a conventional renting business.
Other like RelayRides are much more of a P2P online marketplace, like Airbnb for cars, connecting individuals who don’t mind making their cars available to strangers with people who want to flexibly borrow a car for a short time. These are potentially much more disruptive, though of course they might fail, as the UK’s WhipCar did.
But some mainstream car manufacturers are already dipping a toe into the turbulent waters of providing ‘mobility as a service’ rather than selling boxes on wheels. An intriguing new twist on car sharing has come from Audi; its Audi Unite service, launched in Sweden, offers a ‘personalised micro-sharing’ proposition whereby a group of individuals can collectively lease a vehicle from the company, and a combination of cloud platform, smartphone application and local signalling beacon can be used to measure the usage and share the costs.
Audi promises “transparent and convenient cost splitting between the members of the Audi unite group.” The group can decide if they would like to split the fixed cost of the car (e.g. leasing fee, insurance, tax, winter tires, service, cleaning) evenly or according to the individual usage behaviour, which most of the group chose as the option. This means, that whenever a group member books the car, drives with the car or parks it outside of the individually defined homezone, the time gets accounted to his/her bill. The unused time when the car is parked in the homezone and therefore available for the group is split evenly between all group members. Group members use a fuel card to fill up the car whenever needed and all costs are divided according to mileage.
The service concept is smart, yet also a bit weird. It’s tempting to characterize the idea as well suited to the age of automotive austerity, in which young people are increasingly delaying car purchase or avoiding it altogether.
But Audi is presenting Unite as a ‘premium’ service, and it is in essence a way to market new cars. A wide range of not-cheap vehicles are available in the program. In the company’s words, it is “concentrating on the specific requirements of premium customers. Many of them are finding the ‘shareconomy’ an inspiring idea – but out of a very specific motivation: They share not because they can’t afford something or simply want to get from A to B, but because they believe in and enjoy the shared experience.” It’s worth noting that ‘fair splitting’ has been identified by some commentators as one of the big trends for 2015.
Audi acknowledges that it doesn’t really know how this is going to turn out: “We are therefore working on new additional mobility products that offer greater flexibility while fulfilling the brand’s premium standards. We are currently in a test phase with these formats and are gathering feedback from our customers in a variety of markets so that we can examine the business case for us the manufacturer and for our dealers.”
In any case, it is a bold and brave move that deserves two cheers and further watching.