General Motors announced in January that it is
beta testing Maven, a car-sharing and renting service, in Ann Arbor, Michigan.
It appears that Maven is inspired from Zipcar, but with a difference: it is not based on a subscription model. Drivers can rent it for as low as $6 per hour, inclusive of fuel and insurance.
Maven’s service will have cars parked at strategically located car parks. Drivers can reserve a car and unlock it using a special app. The inside of the car is loaded with technology—satellite radio, onboard wireless access and sync software with Apple’s Apple Car and Go0gle’s Android Auto.
What made GM launch a car-sharing service?
The auto company has seen the writing on the wall.
There seems to be an attitude change among car buyers. They no longer equate buying a car with coming of age. More and more young people—who seek career opportunities in cities—do not wish to own a car. They perceive car ownership as a headache and consider it expensive to maintain. They want to rent a car when required. In the US, they prefer public transport or calling an Uber.
Progressive car companies are bowing to this shift and are experimenting with providing customers options to:
- Car-sharing: rent and self-drive (Maven model)
- Ride-sharing: rent with a driver (Uber model)
- Get self-driving cars
GM seems to have placed small bets on all three options.
Maven addresses the first option. Its
$500 million investment in Lyft addresses option 2 and 3. Lyft is investing part of this fund in building autonomous (self-driving) cars.
Will Maven succeed?
Zipcar, which popularized the concept of car-sharing through a subscription model, failed. (It sold to Avis Budget Group as its operations proved unprofitable.)
What are the chances for Maven?
It seems Maven has a better chance of survival for two reasons:
- GM, which is a manufacturer of cars, will provide a cost advantage and deep pockets to stay afloat.
- People are now more comfortable with the concept of car sharing and renting than they were three years back when Zipcar launched.
Will such a trend impact Indian car makers?
The Indian automobile industry is likely to undergo a seismic change in the next decade.
- Ownership model: In India, young people are increasingly turning their back to outright ownership of cars in favour of renting. They seem to be as comfortable ordering for a car as they are ordering pizza over their smartphones. Uber’s success confirms that this trend has taken root.
- Technology: In future, software, as much as the internal combustion engine, will power cars. At the 2015 International Motor Show in Frankfurt, carmakers voiced their apprehension that Apple and Google would turn them into mere hardware makers—and hog the profit. The New York Times quoted Dieter Zetsche, the chief executive of Daimler which makes Mercedes vehicles: “What is important for us is that the brain of the car, the operating system, is not iOS or Android or someone else but it’s our brain.”
Let us take a look at Maruti Suzuki, India’s No. 1 car company, to see how prepared it is for tomorrow.
Not just Maruti Suzuki, but the automobile industry seems underprepared to face the future with confidence. They should realize that whenever technology collides with an industry, disruption will happen. And technology has already collided with their industry.
-------
Read everything by Rajesh Srivastava
here
(Reproduced with permission from Founding Fuel Publishing Pvt Ltd. This episode is part of a special weekly show The New Rules of Business, hosted by business strategist Rajesh Srivastava for
Founding Fuel, a new generation digital media and learning platform for the entrepreneurial community. Rajesh has a related column with every episode, which can be accessed
here)