Why Are Automakers Jumping into the Car-Sharing Business?

The car-sharing business

In the last few years, the car-sharing industry has grown at a fast pace. Due to its high future growth potential, it has also grabbed the attention of major automakers including General Motors (GM), Volkswagen (VLKAY), Daimler (DDAIF), and BMW (BMW). Let’s explore why automakers find the car-sharing business attractive by looking at its future growth estimates.

Why Are Automakers Jumping into the Car-Sharing Business?

Future growth estimates

The car-sharing industry’s revenues are just a fraction of the auto industry’s (IYK) revenues. However, the growth potential of car-sharing businesses around the world is immense.

According to a report from Navigant Research, revenue from the global car-sharing business was expected to reach $1.1 billion in 2015. North America and Europe combined were projected to account for nearly 83% of this amount. The report also suggests that global car-sharing revenues are likely to expand to $6.5 billion by 2024.

Types of services

Initially, car-sharing services began with basic services where customers could call the car-sharing company to book a ride at their desired time. Later, with the increasing popularity of mobile Internet, some car-sharing companies launched cell phone applications that allowed their customers to book a ride.

Currently, major car-sharing service companies provide a variety of options to customers, including chauffeured rides, car rentals, and carpooling. Carpooling refers to services where a number of customers going to the same destination can share a cab.

In the future, we can expect the car-sharing industry to expand faster through autonomous vehicle hire services. Continue to the next part of this series to learn about the one of the largest car-sharing service providers, Zipcar.