SAN FRANCISCO -- Mobility is the new buzzword in the auto industry. If you’re the leader of a forward-looking car company, it’s no longer enough to sell an electric car and experiment with autonomous driving -- you need a car-sharing service, too.
Daimler, the parent of Mercedes-Benz, claims more than 1 million customers worldwide for Car2Go, which allows urban drivers from Berlin to Vancouver to rent a Smart ForTwo by the minute and leave it near their destination.
BMW recently signed up the 500,000th customer for its rival service, DriveNow, which increasingly relies upon BMW’s electric i3 city car.
Audi, not to be left out, just started testing a high-end rental program here in San Francisco, with prices ranging from $165 per day for an Allroad to $1,285 for an R8 V10 Spyder painted in “Brilliant Red.”
They are finding a core of customers, as are short-term rental services like Zipcar, peer-to-peer services like RelayRides and Getaround, and e-hailing services like Uber and Lyft. If you only travel 1,000 or 2,000 miles per year by car, then it clearly makes sense to pay by the day, by the hour or by the mile.
A strong car-sharing service is clearly a great hedge against a decline in car ownership. But the challenge is identifying the tipping point when the masses, not just a small number of urbanites, will embrace car-sharing.
If you’re driving 30,000 miles per year because of a 50-mile commute, buying a car is an easy financial decision. Taking an Uber or Car2Go everywhere would cost a fortune. So what’s the number of miles when the economics change?
To conceptualize the tricky question of the tipping point, check out this excellent graph from a report that the consulting firm McKinsey released today. At some point between 5,000 and 10,000 miles per year, depending on what type of car-sharing program you’re talking about, the lines will cross for a driver in San Francisco. Car-sharing, rather than car ownership, become the rational choice.