Car Sharing: Fashionable? Need to? Profitable or not?

Interest in the topic of car sharing has not waned so far, either from users of this service, or from professionals. Some people come up with special schemes for how to sell more cars in car sharing, while others think how to service them.

But most importantly, car sharing haunts journalists. It seems that if a journalist has nothing to write about, he can always raise the topic of car sharing, and start reasoning something like this: car sharing cars are a universal evil, because they fight for nothing, occupy parking lots and even kill the whole auto industry, because why buy a personal car, if a car-sharing car is at hand. There is another journalistic exaggeration: car sharing is a panacea for all urban problems, from traffic jams and from harm to the environment, and such a car is much cheaper than a private car.

I don’t want to speculate a lot about the impact of the car-sharing service on the after-sales service market. And the main leitmotif here is that car sharing is to blame for the decrease in the mileage of private cars, which means that “after-sales” are falling.

Let’s turn to the numbers. There is evidence that a car engaged in a car-sharing service is operated daily for an average of 3.5 hours. Let’s add an indicator of the speed of travel: for example, in Moscow the average speed of car traffic is slightly more than 20 km / h. Let’s help carsharing to influence more mileage and suppose that all these 3.5 hours such a car moves along the capital’s roads without stopping and at a speed of 60 km / h. Thus, the daily mileage will be 3.5 * 60 = 210 km.

Let’s say the car is operated every day in the same mode. Multiplying 210 km / day by 365 days, we find that a car drives an average of 76,650 km per year. This value is noticeably 5-6 times higher than the average annual mileage of a passenger car in the fleet. It’s like, for example, going around the Earth at the equator one and a half times! And if you count in parrots – well, that is, in terms of “after-sales” – then these are five MOTs with a change of oil, filters and other things, and also, most likely, two changes of pads and candles. In this situation, every car sharing car for the after-sales service sector is just a gift.

But let’s continue to reason and count. Let’s round it up and assume that there are 30,000 cars in the car-sharing service in the country – I round it up, by the way, in favor of car-sharing. And we get that the total annual mileage of all such cars reaches an impressive 2.3 billion km. I cannot deny myself the pleasure of making a comparison: it’s like driving 15 times from the Earth to the Sun!

And now let’s go from big numbers in the opposite direction to small and understandable numbers. So what does this 2.3 billion kilometers mean for the country’s car fleet? What is the share of this mileage in the total annual mileage of the entire fleet? The answer is 0.4%, think about it – zero point four percent!And I again consider this to be an influence in favor of car sharing, since I admit that absolutely the entire mileage of carsharing cars occurs exclusively at the expense of those who already own their own car. Here’s another comparison: it’s like every driver in the country did not drive 65 km a year, that is, he gave up using his personal car for less than two days! Since the average daily mileage of private cars in the country is about 42 km. Let’s translate this into everyday history, if a person was ill for 2 days this year more than last year, then he influenced the mileage with his sick leave even more than the car-sharing park. This means that winter flu epidemics are more dangerous for personal vehicle runs than all carsharing cars.

You might say: “So this is about Moscow! You can’t count the whole park! ” And you will be right. If we redo everything just for Moscow, assume that the entire car-sharing fleet is located in the capital and use the same 2.3 billion kilometers, we get that this entire annual mileage is 4% of the mileage of Muscovites’ personal car fleet. This, of course, is no longer tenths of a percent and is not within the statistical error. But even this value is not enough to have a significant impact on the after-sales service.

And even if we assume that car sharing took away the runs from personal cars, and at the same time do not take into account the fact that carsharing cars can be used by people who do not have a personal car, then in the after-sales service we will receive a change only in the composition of customers, but not in volume works. After all, there is a car, it has mileage, which means that it is also serviced. And if, nevertheless, we take into account that not only car owners use car-sharing, it turns out that the total mileage of personal and car-sharing cars is even more than just personal cars, which means that the car-sharing service only increases the potential of the after-sales service market.

About the Author

Alexander Gruzdev is an extraordinarily experienced consultant in business analytics. Since he was 14, Mr. Gruzdev was working in the market research industry and started several businesses including gambling organizations, retail shops, and real estate.

Since his first entrepreneurial endeavors began, he never quit market research – in fact, during the last 15 years Mr. Gruzdev held the positions of general manager and shareholder in this segment. His experience in global market intelligence spans over 20 countries including Europe, Russia, Asia, and the MENA region, for more than 100 different customers.