Car-sharing is big in Germany, even if its growth there has sometimes been slow. Yet how will the sector evolve, given the dramatic changes the car industry as a whole will experience in the years ahead?
The word "mobility" means different things to different people. Either way, it's unlikely to be a word you use much in everyday conversation. "The mobility offering on my way in to work today was excellent," said no one, ever.
We should start getting used to the word though, because we're going to be hearing it a lot more. The process of getting from A to B is changing profoundly and the catch-all word for this multifarious wave of the future is "mobility."
Back in November, German Economy Minister Peter Altmaier said that sooner or later, there would be one all-encompassing mobility platform: "one app that handles your entire mobility, from your bicycle, to getting the bus, to renting a car to booking an international flight."
There are still quite a few miles to go before we get there, but one of the most interesting staging posts on the journey so far is the whole area of car-sharing, which has undergone something of a boom in Germany in recent times.
There are many different types of car-sharing services, which have been in operation in several countries for more than a decade. The most popular kind in Germany is "free floating," whereby cars are picked up, driven and parked all around the city by users who reserve them using an app. Car2Go and DriveNow, now under one umbrella as ShareNow, are good examples.
There is also the booming "e-hailing" and "ride-sharing" sectors, close relatives of car-sharing, where people traveling in the same direction engage with an app and are picked up by drivers. The Berlin public transport (BVG) system's BerlKönig is one, as is the increasingly visible CleverShuttle.
Last month, the German car-sharing lobby (yes, there is one) revealed a sharp increase in the number of registered "car sharers" in the country, with a total of 2.46 million registered users at the end of 2018, up by 350,000 from the previous year.
So is this version of mobility one that is here to stay? Yes and no, says Kersten Heineke, an analyst on the future of mobility in Europe with consulting firm McKinsey.
He sees car-sharing and e-hailing as "bridging technologies" that are helping large carmakers and other players prepare for the drastically changed era of driving that awaits us, one that will be defined by autonomous vehicles and changing attitudes to car ownership.
"In an modern, interconnected city in an autonomous age, whether that be 2028, 2030 or 2032, we will not be using traditional car-sharing or e-hailing anymore, but instead, we will be sharing robo-taxis and shared robo-shuttles, and basically all of these existing models will have merged into a new offering," he told DW.
Yet he believes that the current model of car-sharing in operation in Germany still has a few years to run, and that all three big German carmakers — Daimler, BMW and Volkswagen — have invested in it for both its current market value in larger cities and for its value as a "good training ground for learning how to sell mobility in smaller sizes."
Big investment by the biggest players
"Car-sharing is a massive growth segment," Christian Müller, Car2Go's communications chief, told DW.
BMW and Daimler have teamed up in their efforts to dominate the car-sharing market in Germany and beyond
The investment by the big carmakers certainly has been substantial and indicates as much. Daimler paid €70 million ($79 million) last year to buy the remaining 25 percent of Car2Go, taking its stake to 100 percent, valuing the company at €280 million in the process.
Around the same time, BMW fully acquired DriveNow. In both cases, the remaining equity had been owned by traditional car rental companies, Europcar and Sixt, a reflection of the impact that the car-sharing model has had on car rental companies as well as carmakers.
BMW and Daimler merged their car-sharing units in March 2018, a deal which was given the green light last December. The new entity, ShareNow, will have four million customers worldwide, with over 20,000 vehicles in 13 countries, making it the world's largest car-sharing provider.
Volkswagen has also gotten in on the act. Later this year, it will launch its "WeShare" car-sharing service in Berlin, with further launches to follow in the rest of Germany, Europe and North America in 2020.
The brand pivot which VW was forced into by the Dieselgate scandal has seen it invest heavily in electromobility, and the entire WeShare fleet will be electric. That will distinguish it substantially from ShareNow; for example, only 3,200 of its 20,000-plus fleet are electric.
That leads to two key questions about the future of the car-sharing model, namely how it will evolve in step with the overall industry push towards both electromobility and autonomous driving.
The customer will win in the end
Müller says ShareNow is "convinced" the future of car-sharing will be electric but that its ability to increase the amount of electric cars in its fleet is restricted by the current lack of charging infrastructure in Germany, critical given its "free-floating" model, where cars can be picked up anywhere within a city.
The question of how car-sharing will look in an automonous future is harder to predict, but companies such as ShareNow have already been investing heavily in managing the shift. Indeed, it could be argued that the investment in car-sharing is in itself an investment in autonomous driving.
In a "white paper" on the topic developed by Car2Go in 2017, it lists "professional fleet management, demand prediction, fleet intelligence, intelligent charging and customer experience" as the five key areas needed to successfully maintain its presence in a mobility age that will increasingly be defined by artificial intelligence and Internet of Things (IoT) technology.
Kersten Heineke believes the experience the large car-sharing companies are gaining every day in managing big car fleets across large cities, and in meeting the customer expectations of drivers who are not car owners, will give them a big advantage when the autonomous age fully dawns. Whenever that happens, car ownership is expected to plummet. On top of that, a mobility company's ability to manage large, dynamic car fleets will be fundamental to what it offers.
It's important to point out that the car-sharing model embraced by the likes of ShareNow is very much an urban-focused model, and not necessarily one that will work in smaller cities or in rural areas. Meineke believes that in such areas, the status quo with regard to car ownership is not going to change anytime soon, even after electric and autonomous vehicles become mainstream.
However, he believes that city residents will ultimately be the big winners in the mobility future which awaits us.
"Things are going to become so much more convenient," he says. "The customer will have the option of choosing many different ways of getting from A to B: different durations, different levels of comfort but also different levels of price. That for sure, is where this is ultimately going."
This is part of a series on DW Business on the future of mobility in Germany. Here's a piece on mobility services for the elderly from Hardy Graupner.