“Opportunities increase when you help others win. A little win for a partner is a little win for you.”
If you are a start-up founder, a business owner or a regular news reader; ‘Partnerships’ and ‘Eco-system’ are words that you will come across regularly. We live in a world where regular business partnering is done by start-ups, large companies, Government and NGO’s alike. The focus on scalability, sharing benefits and supporting each other through turbulent times are essential motivations for seeking strong business partners and keeping your customers happy. But partnerships must be built carefully and thought out thoroughly. If done right, they can be successful like partnership between Spotify and Starbucks.
From the food that we eat to the apps we use; everything has partnerships involved. An area which is the prime focus these days for business partnerships is: Mobility. Companies ranging from Automotive manufactures, Car Dealers, Mobile manufacturers, Ride-hailing firms and Car-sharing platforms etc. all are trying in some way to be involved in the journey that you make on your four wheels.
While Car-sharing is still in early stages of growth across the globe, it is expected to grow at a CAGR of 17% over next 5 years and is expected to reach ~$100 Billion in market size. So, it is logical that everyone wants to be involved in one of the fastest growing mobility segments and share some of this large pie.
Let’s look at some examples of why so many different businesses are partnering with car-sharing companies and why it makes so much sense:
Car Manufacturers and Dealers
Even before the Covid-19 pandemic, traditional car manufactures were facing revenue decline and searching for additional revenue streams. Hence, we saw partnership between Daimler & BMW to roll out Car2Go (a car-sharing company) and Toyota invested $500M in Uber on self-driving vehicle development.
Big-time manufacturers have noticed that the car ownership model is on the decline and have decided to shift towards the car-sharing trend.
Covid-19 pandemic has choked the revenue streams of traditional Automotive manufacturers and Car Dealers. But these firms still have a large inventory of cars. So, what can they do?
This is where car-sharing comes in! Instead of selling the car to one customer, these firms have been partnering with car-sharing companies to lease/rent out their cars to multiple customers in form of short and long-term rentals. A prime example is our local Singaporean P2P car-sharing platform, Drive lah, which has a successful partnership with Cycle & Carriage to rent out vehicles. Drive lah gets access to a fleet of vehicles for its customers and C&C gets to increase its vehicle utilization and recover the cost associated with the car. Also, this serves as a great way for customers to test out the car over an extended duration, which they might just end up buying. A win-win for all parties!
Real Estate Companies
According to a 2019 study of Millennial’s by ZipCar, 78% of participants said that car ownership is a financial burden. Also, 55% have actively made an effort to drive less. Millennial’s are more open to collaborative access over ownership and more environmentally conscious as compared to older generations. In short, folks today want hassle free access to cars without ownership.
To capitalize on this trend, real-estate firms are partnering with mobility companies to provide transport facilities for its residents without increasing car-ownership and need for parking spaces. An example of this is GoGet, a car-sharing firm in Australia, which has actively partnered with property developers in Sydney and Melbourne for dedicated parking spaces on the properties and in turn provides cars for the residents and nearby commuters. Thus, building residents can enjoy the benefit of having a car-free lifestyle and have access to cars all the time.
Properties with car-sharing facilities are seeing increased premiums as people value the convenience.
Governments across the world are keen to reduce pollution and traffic congestion. While cities such as Jakarta observe weekly Car-free Sundays, these are not permanent solutions. And hence, cities across the globe are partnering with car-sharing companies to:
a) Reduce the traffic congestion
b) Control pollution and reduce carbon footprint and
c) Supplement the public transport network to ensure connectivity throughout the city
Car-sharing companies in Singapore, Thailand, Korea etc. all actively partner with Government and City Councils to efficiently plan out smart city offerings and define parking infrastructure to reduce congestion in main areas.
As University students, most of us have been stuck in our dorms over the long weekend and dreamed of having a car to take a quick trip across the city with our friends. While most students can barely manage their Ramen budget, having a car is out of question!
A lot of car-sharing companies see potential in partnering with Universities and offering special rates to students. The student rates help increase the adoption of car-sharing as well as reduce the congestion in Universities where parking is limited.
Zipcar, a US based car-sharing company has partnered with University of California to develop student plans for on-campus students.
There is a shift in how people travel. From living in hotels to moving into friendly AirBnB’s. People want to have a more local experience and one way for this is to rent a car and travel around the city that you are visiting. In our friendly neighbor Malaysia, Moovby (a P2P car-sharing company) has partnered with Traveloka (an online travel company) to capture this market segment.
Car-sharing is a segment where any and every business can find something for itself. Companies into manufacturing, logistics, music, automotive repair, healthcare, travel etc. can find an area where they can benefit by partnering with a car-sharing firm.
A prime example of how effective car-sharing is the fact that such platforms volunteered to provide cars free-of-cost to healthcare workers to ensure speedy response to emergencies during Covid-19. During times of Covid-19, car-sharing platforms are seeing an increase in long-term leasing since people prefer the safety of having a personal vehicle to avoid public transport.
So, whether you are a small start-up or a large company in any sector or Government organization, car-sharing is a segment that you should look into for partnership opportunities. Given the wide scope, every industry sector can find something to partner with in the car-sharing era and enhance its customer reach.