How are rideshare companies changing the fleet and automotive industries?

Rideshare companies have changed the fleet and automotive industries by increasing global access to transportation, influencing purpose-built vehicles, inspiring a new wave of autonomous vehicles, and catalyzing new technology within the supply chain industry.

While popular rideshare companies are making headlines and changing how modern society thinks about vehicles, they also hold the potential to create an even bigger industrial impact.

Growing Market Supplements Conventional One

Although the rideshare market will continue to grow, it will still not outpace the market for new vehicles in rapidly developing companies, or replace an average American's desire to own a car. In fact, a 2017 McKinsey survey showed that two-thirds of all U.S. respondents prefer driving their own cars and nearly that many are not interested in trading vehicles for even free shared rides.

Ridesharing will continue to grow in China, Europe and the United States. The Chinese market is valued at $24 billion and the U.S. market is at $23 billion. The European market is valued at less, but it is still growing. In these markets, ridesharing customers reported that they expect to continue in the future.

Purpose-Built Vehicles

One potential new market segment that may subsequently arise in the automotive industry is purpose-built vehicles. Currently, the average cost for a vehicle in the United States is $24,000 because it must appeal to a broad potential buying audience. However, a vehicle built for the sole purpose of ridesharing duties could be built much less expensively, simpler, and have much lower levels of complexity and features.

For example, an easy-to-clean interior may be more important than many of the complex technological and communications systems now available. Industry experts predict that the cost of producing a purpose-built vehicle could be one-quarter less than a conventional one.

Autonomous Vehicles

Everyone has heard of the promises of the self-driving car. Although this is slowly becoming a reality, these autonomous vehicles would significantly affect the ridesharing industry. Without the need for drivers, autonomous vehicles could provide rides in sparsely populated areas much more easily and cost-effectively.

Since nearly half the cost of ridesharing services involve driver expenses, an owner of an autonomous fleet would have a significant competitive advantage.

Parcel-Sharing Offshoots

The sharing economy also impacts the supply chain and parcel distribution markets. Currently, transportation accounts for more than 10 percent of the U.S. gross domestic product, which means that significant opportunity exists in this sector.

For example, industry studies show that roughly 40 percent to 50 percent of a company’s logistics costs may reside in the final delivery mile. Currently, crowd-sourcing that last-mile delivery by using a database of approved drivers in local communities is already taking a bite out of that expense.

Regional carriers could begin coordinating with national and global networks to increase efficiency, reduce costs, and shorten delivery times even further.

The same idea can apply to the long-haul trucking industry, where logistics management software can be integrated across providers, so that truck capacity can be further optimized. Carriers may be able to pick up or drop off deliveries during their typical route, handing off packages to other companies heading in the delivery direction.

Warehousing Offshoots

Extending the technological developments another step brings in warehouse sharing as well. Those offering temporary storage space along transportation routes can enter the supply chain, providing warehouse sharing services on-demand. By improving the communication between all these parties along the supply chain, logistics managers make transportation more efficient and faster.

Conclusion

It’s easy to see that ridesharing companies really spurred a great deal of change in modern society about how to get people and parcels to the places they need to go faster and more efficiently than ever before. As manufacturers, distributors, and others work hard to take advantage of these opportunities, we’ll continue to see more changes in the automotive and fleet industries in the near future.