I estimate the vehicle marketplace today is made up of 70 percent personal use and 30 percent sharing. In the sharing segment, I'd put rental cars, taxis, Uber, Lyft, buses and subways. A huge sharing market already exists.
In five to 10 years, the big disruption is going to be in this sharing marketplace with the arrival of autonomous vehicles.
Without a driver, you're going to have choices in sharing that you've never had before. Will anyone rent a car? Will people get into a taxi or just get into an autonomous vehicle and tell a machine where they want to go? Will they get on a bus when they can get into a shared vehicle? And are people still going to take the subway when they have the choice of a convenient, shared autonomous vehicle?
Sharing is not going to disrupt personal use. Rather, sharing first must go through its own revolution. Then over time, it may affect the split between personal use and sharing. But personal use will still be most of the market.
For a seismic shift to occur, you must offer a significantly different economic equation. If an individual drives more than 5,000 miles a year, it's cheaper to buy a car than to go into the sharing environment. Most people are driving far more miles than that, so it still makes economic sense to have a personal vehicle.
And there are additional advantages that come along with a personal vehicle. You have total flexibility. You can go long distances in the same vehicle, whereas if you rely on Uber, you can't take the family on vacation.
We're not at a point where this shared concept for personal use works economically. There's no example of it, and it's a minuscule part of the market.
If consumers are willing to pay a premium on a monthly basis to have the ability to change vehicles, they always want the latest and greatest. The highest depreciation curve on a vehicle is during the first 12 months of use, and shared use has the greatest impact on the depreciation of the vehicle. It has a much steeper depreciation curve than personal use. You will then have a clientele that is demanding a vehicle that has the steepest depreciation curve, and if you price for that, the payment is so exorbitant that it doesn't make sense. Or, you just subsidize the business and lose money.
So I don't view the sharing model as the wedge that's going to disrupt and dramatically change the marketplace. It's going to be trouble for buses, subways, ride-hailing companies and rental car companies. Their world is going to be very different very quickly. But for personal use, it's a different matter. It's going to take more time for the economics to make sense — for people to give up owning a car.