The car revolution – Part 2 – Ownership will change so radically it will probably disappear

In our series of articles “The Car Revolution“, we have already explained electric motors will power everything for technological, technical and effiency reasons. But there is an aspect of this revolution that has nothing to do with technical matters. It has to do with your way to use a car. In order to do so, you can rent, borrow or buy one. The latter is the preferred way for almost every human being that can afford to have an automobile. The ownership appeal relies not only on convenience, or counting on the car whenever you need it, but also as a social statement. If you are driving a fantastic machine, you had the means to buy it. Although having a car can be convenient and rewarding, it also brings along a lot of other expenses and hassles. You pay lots of money in something that will depreciate and eventually lose all residual value. And we are speaking only about the vehicle acquisition. There is also refuelling, insurance, maintenance… In some countries, due to taxes and other fees, it will even become a burden, one that you will have to pay in order to get rid of. If it does not become a collectible, it most certainly will make you lose a lot of money. Don’t get us wrong: we love cars. We love what they do, what we can do with them and the freedom they have given us over the last 100 years. Nonetheless, owning one is a habit that is close to an end for most. But it does not mean we will all surrender to public transportation. Car will still be around. The only difference is that you will pay not to buy one, but simply to use it.

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Some of you must not remember, but telephone lines were once bought. And each line could cost as much or even more than a car, depending on the country in which you lived. Now all you have to do is pay a fee and have as many telephone lines as you may need. Wherever you need them. Like water or electric energy in countries that manage to offer them to everyone. You pay respectively for the chance to communicate, to clean yourself and your things and to power your appliances. The idea with cars is more or less the same.

Today, you aim to buy a car so that you can move around in an independent way. In the future, when you need to move around in an independent way, you will pay to do just and exactly that. In other words, the “mobility provider” will supply you with an automobile for you to do so. Cars will cease to be a goal and will become a means, an instrument for “mobility services”. Just like the modem your broadband internet provider delivers to you when you hire their services.

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YOYO is the latest example of this trend. The company has presented a month ago a mobile phone app that allows you to ask for a car whenever you need one. You say at what time and when you will need any car, from a compact to an SUV, and a YOYO representative, or Agent, as the company calls them, will bring you the car you have ordered. When you are done using it, someone comes to take it away. You don’t even need to have a parking space anymore, at home or wherever you decide to go. And you also does not have to care about filling up the tank or with insurance: these expenses are included in the fees you pay. The company charges a membership fee (US$ 99) and by the kilometer (or mile), depending on the vehicle you choose. This is the most convenience you can get so far for any service of the kind. With autonomous cars, Agents will be quickly relieved of their duties and YOYO members will get cars that drive by themselves. At any time and anywhere you need them.

YOYO is currently under beta test in San Francisco, but the company says it will establish in any city in the USA where they have at least 1,000 people signing up. We have tried to contact the company founder, Ro Arora, but have not received answer so far. In case we do, we’ll update this article.

CAR2GO NORTH AMERICA LLC MINNEAPOLIS

Other companies, such as Zipcar, demand the subscribers to collect their cars in defined spots and to take them back to the same or to other assigned parking places. Car2Go, a car-sharing enterprise from Daimler, does the same. Maven, from GM, goes in the same path. There are 2 things you should be aware with the companies we have just mentioned.

Did you notice many carmakers are creating their car-sharing services? Besides Car2Go and Maven, there is also Quicar (Volkswagen, a company that has also invested on Gett and Greenwheels), ReachNow (BMW) and we’ll soon see more of them joining these services. The truth is most manufacturers are afraid about their businesses’ perspectives. They are proclaiming they are “mobility companies” instead of simply automakers. They do not want to get caught in the middle of the revolution. Such as Kodak when digital photography started to be more common.

Some companies are even toying with the idea of using car-sharing models to return or even to enter important markets for the first time. Carlos Tavares, from PSA, said in September that he intends to establish a car-sharing operation in the USA with a long-time partner company, Bolloré. It is not clear which cars, and from which of PSA’s brands (Peugeot, Citroën or DS) would be used in this service. Depending on how much people would like to use these cars, Tavares may even start to sell PSA models in the USA again, something the company has quit doing by 1991. Car-sharing, in this case, could lead back to traditional car ownership.

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Another similar example may come with Lynk&Co, a new car brand from Geely, the Chinese company that controls Volvo. We are not sure about what it is going to propose, but this is the text the company has released so far, along with the picture above:

ARE YOU READY FOR SOME NEW THINKING?

Time to count down. It’s a just a few weeks left until we meet in Gothenburg and Berlin. I hope you are ready for a very interesting 24 hours.

You’ll get a hint of the design of the new car in the picture below. But we are presenting more than a new car. A new car brand and a model line-up. And some radical, new thinking – different from anything you’ve seen before from the car industry.

New ideas, in a new brand, calls for a bold name.

We are LYNK&CO. And we’ve just started to build our website. Come and see us at lynkco.com. At this point it is just a teaser, but all the content will be there when we lift the embargo for this exciting news at 00:00 hours CET on October 20.

Once again, I look forward to seeing you soon and I think I can promise you one thing: You will not be disappointed. The world has changed.

And LYNK&CO might well change the world’s idea of mobility.

See you soon,

Alain Visser

Visser is Geely’s vice president of global marketing and sales. He will probably be the one to introduce the new brand. The move here intends to beat resistances to Chinese cars in Europe. And it will probably do so not only by starting fresh, with an entirely unheard-of car brand,  but also by presenting a new way of using its cars. We are yet to see what that new way will be, but we would not be surprised with a car-sharing service.

The second thing to pay attention to is that such bet may not pay due to a tremendous nuisance: your car will not be parked home. It will be somewhere else, probably far from where you live. This is one of the main reasons some people may never give up on having a car in favor of a car sharing membership. Considering the universe of car owners, how many of them live close to these defined spots for picking or leaving a shared car? A limited number, for sure, what makes the reach of these services be also limited. If you had to leave the shared cars far away from where you live, would you even consider such a service? Would you take a cab or a bus to get to an available car?

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Even with such limitations, Zipcar, controlled by Avis Budget, has recently claimed to have taken 413,514 cars out of the streets with its 1 million subscribers. The idea is that the shared cars are used much more often than a regular vehicle would. You don’t need one car for each member. Let’s suppose you need one to go to work. As soon as you park it, someone else may get it and drive elsewhere. And this process keep on going. While your car would be parked waiting for you to get it back, the shared car would have served other people. Since its engine would not cool down, it would be used close to its ideal working temperature for most of the time. That represents less emissions and also a vehicle that is less prone to mechanical problems. That’s a beautiful speech, but most of us just want to get home. And go to work with comfort. And get back without having to wait. Car sharing, unless in the same terms proposed by YOYO, will probably not prevail.

 

Having a car without the hassle

YOYO is not the only company that plans to make it convenient not to have a car. Riversimple also aims that, but in a totally different way. There will be no car sharing. The car you get is the car you are going to use for as long as you want to use it. You will park it at home or at your work as you would do with your own car. Nobody else will use it but you while you have the contract, what may give you that sense of ownership that so many praise so much. And which translates into being able to forget anything on the car, or leave it there for when you need it, with no fear of not finding it anymore (at least in countries with a reasonable deal of safety). Or of not finding the car again, what is a huge possibility when it comes to car sharing.

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Like the other “mobility services”, Riversimple will charge you a monthly fee and for the distances you cover. And it will also take care of maintenance, refueling and insurance. The difference, besides using the same car for as long as the contract is valid, is that Riversimple builds the vehicle. And it is made in a way that turns the logic of car making upside down. Mostly because it is essential to its business model, but also because it makes sense. “The more fuel-efficient the car is, the less the company has to spend in refueling. The more dependable it is, the less we will have to spend on maintenance. We are building cars that will last for at least 20 years, so we will consume less natural resources. When you sell a car that is fuel-efficient, the savings go to the customer. When we do not sell it and refuel the car, the savings come to us”, says Hugo Spowers, founder of Riversimple.

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In the Riversimple business model, selling the car is a bad deal. Besides pushing a source of income to customers (savings on maintenance and fuel consumption), the large-scale model of the current automotive industry would not allow it to compete or to develop its technology. The Riversimple models will be powered by fuel cell and count on what the company calls a network electric structure, something that we explain better in the article this link points to. The idea is to keep on improving both technologies and to apply the improvements on current cars, not on new models. That is not possible in any car we know nowadays apart from the Tesla Model S in what relates to software.

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Transportation appliances?

Cars are not sole transportation appliances, even if they are for most people. The same people who never check the tire pressure or the engine oil level, that do not perform due maintenance or that even care for the car state rather than when the fuel tank is depleted. All these guys want something that moves around and never breaks, a need that helps to explain why the brands with a better reputation for reliability are the ones that sell more nowadays. Most of them don’t even like to drive. These are the main focus of the new model of car use. And of the ownership extinction.

In a sense, that will be a good thing. The current standard of consuming more and more raw material in order to promote economic growth will probably cease to exist. We will not speak of recycling as often as we do now because planned obsolescence will not be a need. Companies will not sell us products, but services. And the ones that provide the best services, though the best products and fairest prices, will keep on earning money. Since efficiency will be the main goal, electric motors will have even more incentive than today (no company will afford to burn 60% of what they spend in refuelling the vehicles). And most cars will be in much better shape than the current ones we find in every street, or else, with tires in the recommended pressure levels, wheels properly aligned and balanced and so forth.

For a selected few, including most of our readers, automobiles are also incredibly fun machines. They allow you to test your piloting skills in race tracks. They are amazing pieces of engineering, some of which are so enchanting that they become instant classics. Some are works of art and do not lose value with time, but only increase it. And some others are even fun to fix. As Italian folks say, “Donne e motori, gioie e dolori” (Ladies and engines, joy and pain). Breaking is part of the package. For the people and cars that fit this description, ownership will very likely remain the same, only with a hobby status. Tracks will still be around, even if in a similar fashion golf clubs, to which only a few will have the means to afford. Get ready for the change in case you are a petrol head.

 

Read the other Car Revolution articles:

The car revolution – what you can expect from the future on four wheels

The car revolution – Part 1 – Electric motors will propel everyone (and everything)

The car revolution – Part 2 – Ownership will change so radically it will probably disappear (this one)

Gustavo Henrique Ruffo

I have been an automotive journalist since 1998 and have worked for many important Brazilian newspapers and magazines, such as the local edition of Car and Driver and Quatro Rodas, Brazilian's biggest car magazine. I have also worked for foreign websites, such as World Car Fans and won a few journalism prizes, among them three SAE Journalism Awards and the 2017 IAM RoadSmart Safety Award. I am the author of "The Traffic Cholesterol", a book about bad drivers that you can buy at Hotmart, Google Play, Amazon and Kobo.