Carmakers get more involved in ‘mobility services’ to combat the likes of Uber

Ask just about any analyst, and they’ll tell you that the car industry is on the verge of massive change. Electric powertrains and autonomy will change the cars themselves, but the proliferation of car-sharing services like Zipcar and ride-sharing services like Uber and Lyft will also change the way people get access to them.

Sharing presents an existential threat to carmakers, many analysts believe, because it will lessen the need for car ownership. That’s leaving car companies scrambling to reinvent themselves as purveyors of mobility, rather than just metal, according to a new report from the MIT Technology Review. Over the past couple of weeks, carmakers used both the 2016 Consumer Electronics Shows (CES) and 2016 Detroit Auto Show to announce numerous mobility-service initiatives.

Ford seems to be leading the way here. At CES, CEO Mark Fields said the “mobility” industry is worth $5.4 trillion, but the car industry is only worth $2.3 trillion. He said Ford wants a piece of the mobility action, and may even develop an autonomous car specifically for ride-sharing services. A week later at Detroit, Ford announced FordPass which, among other things, will allow customers to reserve parking, plan trips, and accumulate reward points.

“Uber showed the world that it can help people get where they want to go,” Ford research chief Ken Washington told the MIT Technology Review on the sidelines of the Detroit Auto Show. In November, market-research firm Gartner predicted that by 2020, 10 percent of today’s vehicle owners in “urban markets” will replace their cars with sharing services. But carmakers can keep those customers if they make a concerted effort to extend their focus beyond cars, said Thilo Kozlowski, Gartner’s automotive practice leader.

Other carmakers are showing more interest in services, too. General Motors recently announced a $500 million investment in Lyft, and also bought ride-sharing service Sidecar. It’s also launching a “personal mobility brand called Maven that will include car-sharing services. Audi is also testing an on-demand rental service called Audi At Home in certain U.S. markets.

Carmakers have actually been involved in sharing services for some time. Daimler continues to operate Car2Go with Smart cars, and BMW has its DriveNow service, albeit no longer in the U.S. It will be interesting to see whether efforts like these grow to become major parts of automakers’ business, or whether those companies really should just stick to selling cars.

Posted by Stephen Edelstein

Stephen's obsession with cars is almost too hard to quantify. From the latest electric car to the classics, he's interested in anything with four wheels. When he's not writing, he can be found searching the Internet for a car he hasn't seen before, or reading a good book. He has a Master's Degree in History from Clark University. He currently lives in Connecticut.

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