Mobility illuminates the end of ownership

Utilization, Utilization, Utilization.

New urban mobility services are changing car ownership to the better. I’m suggesting to you that this could be a renaissance for humanity and thus we may be on the cusp of a future which could provide a tremendous leap forward for human kind.

Especially Asia will benefit from this development, spurring growth even further in this region. Investments in automobile-dependent infrastructure in terms of large suburban areas and centralized shopping, living, and working areas have not been taken yet and urban density is higher.[1]

In other words, the end game for mobility services is in Asia.

Most manufacturers have realized this and are changing their strategy accordingly. What most people don’t see yet is how this completely changes the economically optimal strategy for car manufacturing.

The optimal strategy for car manufacturing

If you’re selling cars, the dominant strategy is planned obsolescence. The fewer miles the car lasts, the more frequently the car needs to be replaced and the more revenue you make.

If you’re selling mobility, the dominant strategy is durability and reliability. The more lifetime miles car manufacturers can deliver from each car that comes off the line, the more revenue you make. I.e., Tesla’s stated goal is a “million mile powertrain.”[2]

The economics would really have to be compelling and it’s hard to imagine they will be especially if the number of miles “driven” go up.

Carmakers already adjust and prepare for a reality in which mobility is treated as a service and cars are losing their traditional function as a (middle class) status symbol. In a world where you don’t have to drive yourself but can instead use the time to sleep, watch a movie, study or shitpost on the Internet, a 1.5 hour commute to work isn’t that bad anymore.

Maybe we will even see mobile urban commuter office-busses with wi-fi, printers, video-conferencing, and phone chambers to make transportation work efficient boosting transit productivity. Candy Crush here we come!

Since the labor cost for operating a self-driving car is probably really low (we’ll still need mechanics for maintenance and such) and streets are heavily subsidized by the government, self-driving cars are cheap and could be a competitor to traditional public transport services.

In the end, the key performance indicator for the new mobility world will be utilization of the shared resources.

What do you think how this will play out, leave your comment below.

And don’t forget to recommend if you like this article, please!

Sources

[1] http://www.newgeography.com/content/002808-world-urban-areas-population-and-density-a-2012-update

[2] http://www.hybridcars.com/tesla-sets-1-million-mile-drivetra...