The corporate car sharing market in Europe is expected to grow rapidly at a CAGR of 87.22% during the period 2014-2019.
Car sharing is developing into a global industry because of it has more advantages than car ownership. Car sharing is more affordable, cost-effective, and environmentally friendly. Corporate car sharing companies are coming up with technological innovations such as operational planning, booking management, licensing, key management, and other in-car services.
Technavio analysts took a look at the corporate car-sharing market in Europe and here are four key factors that they found which are contributing to this high level of growth:
Increased Demand for P2P and One-way Car Sharing
Car-sharing organizations (CSOs) initially operated their fleet of vehicles through the traditional two-way model. However, one-way and P2P corporate car sharing models are gaining popularity. In the P2P model, car owners rent their vehicles to users through CSOs for short periods of time. This has become a revenue-sharing model between the individual car owner and the CSO. It enables direct exchanges between the CSO and the owner of the car via the Internet. Also, the terms and conditions of the transaction are decided between the parties, allowing for customized service.
The one-way car sharing model allows users to choose the pick-up and drop-off points according to their requirements. Here, the vehicles being rented are usually owned by the CSO. It is a convenient option as users need not return the vehicle to the original pick-up point.
The entrance of OEMs provides immense growth potential to the market, as this will allow the introduction of innovative models of car sharing.
Cost-efficiency of Car Sharing Services
Customers using car sharing services benefit from cost-saving advantages in terms of the total costs associated with mobility. As the vehicles available in car sharing fleet are owned by firms, organizations, or individuals, users are free from costs and other issues that can come with owing a vehicle.
Users also have the flexibility of choosing cars as per their requirements, and insurance costs are taken care of for both users and individual car owners. For owners, the cost of insurance is included in the monthly or annual fee they pay to CSOs.
Other benefits for users of car sharing include non-payment for gas or maintenance as all costs are included in the driving rates. Corporate members also have access to a fleet of cars with hassle-free maintenance and management systems. Reduction in fleet costs has also made it an easy and cost-effective method of providing vehicles to employees.
Source of Revenue
Car sharing is becoming a lucrative option for both car sharing companies and individual car owners. Car owners can rent out their unused vehicles for a share of the revenue earned from the process. Matters related to insurance, technology, and billing are handled by the CSO, and the CSO can acquire or lease a vehicle at low costs. Hence, car sharing minimizes costs while maximizing revenues for owners and companies.
Car sharing companies are expanding their businesses by targeting new market segments such as large companies and small businesses. Corporate car sharing is the fastest growing segment and has the highest potential for profit generation as most large companies use car sharing for business travel.
Customer Convenience
Diverse car sharing models are offered by vendors to add to the convenience of customers. One-way and P2P models are replacing the traditional two-way model. Customers view the one-way model as the most hassle-free car sharing option as it allows them to choose their pick-up and drop-off points.
P2P models are also gaining popularity in the market as they offer users the option of renting vehicles for short periods of time through CSOs and other providers. They provide a more customized service as the terms and conditions of use can be decided by the parties involved in the transaction. Also, P2P car sharing requires only minimal manual work in terms of booking and payment, making this a popular option for consumers.
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