Forget cars, think fleets
The second industrial revolution was led by the auto industry. City infrastructure was built keeping car travel in mind, as they went from a status symbol to a commute necessity, leading to many urban households in developed markets owning a vehicle.
This has now changed of course. People are increasingly migrating to different cities and countries, and they do not see the need to have a car with an uncertain future, love of freedom, and the availability of transportation for hire. On the other hand, even the people who do own a car, hardly use it.
An average car belonging to an individual person or family hardly drives for 3-5% of the time. Most of the time, it simply stays in garages at work or home.
This is an opportunity that small and big businesses are increasingly starting to tap into. However, the market is still young and fragmented.
There are various ways in which businesses can take advantage of the changing times to stay ahead of the curve:
Develop innovative solutions to enable driverless cars
Advanced driver-assistance systems (ADAS) have become increasingly popular, as per reports from Bosch, a technology and services company. Automatic lane-keeping support, remote parking, and drowsiness detection are some of the popular features for new buyers. Moreover, installations of ADAS are on the rise.
This is the primary step before driverless cars become a norm. These features need to be able to use the power of 5G and AI to compute quickly, and keep passengers safe. However, they also need to be secure and allow humans in the driver's seat to override the functions quickly and easily.
The World Economic Forum has already formed Global Autonomous and Urban Mobility Council to support and overlook the development of autonomous vehicles. It is co-chaired by Brian Gu Hong-Di, Vice-Chairman and President of Xpeng Motors, Keiichi Ishii, Minister of Land, Infrastructure, Transport and Tourism of Japan, and Dara Khosrowshahi, Chief Executive Officer of Uber Technologies.
Focus on durable technology
The challenge of adding multiple computer parts to cars is their delicateness and durability. With the auto industry focusing on fleets for their corporate partners, it is expected that those cars will drive for a lot longer than the ones owned by individuals today. Whether it is Udrive, Ekar or Swvl and Careem, everyone needs strong durable cars that do not break down easily.
Furthermore, manufacturers need to rethink car designs, which can be easily upgraded with better systems to reduce waste.
This is a challenge when it comes to strengthening the hardware of the cars. Manufacturers need to focus on simplifying systems and improving their capabilities to account for longer term viability of vehicles.
Insurance providers across the globe are focusing on their B2B business of catering to fleets. In zero-sum markets for auto insurance, such as the UAE, the competition is increasing. While there are businesses with large fleets cropping up to cater to the market, they are just a handful. Moreover, when it comes to startups, insurance providers need to understand the economics to provide higher value at lower costs in order to win.
There are also other ways to look at insurance to stay ahead of the competition. For example, driving distance-based insurances have cropped up across the world and was also recently introduced in the UAE through Beema.
With the advent of autonomous driving, we are curious to see whether and how insurance providers will support or inhibit the adoption of driverless cars.
Businesses such as Yallaparking have provided a good solution to car owners; partnering with hotels and property developers to rent out spaces for short and long term use. Udrive and Ekar have worked with the RTA to allow parking in open spaces and public parking areas.
A young startup from Kazakhastan, TuraQshare, told us about their “Airbnb for cars” model, that allows people and business owners of condos, villas, and car parks to upload their parking space data and allow people to park from a few hours up to a month. Drivers can view available parking spaces via the mobile app.
Is there an idea you have that can solve parking challenges of fleet owners or their customers?
The B2B market was already big for the auto industry. While it is going to get bigger with ride-hailing and car-sharing market growing, it is also going to change with new technologies being introduced. Every player in the industry needs to take on a value-adding role in order to grow in the fourth industrial revolution.