United States

The evolution of ride sharing


There once was a time when ride-sharing meant putting a number of people who were going to the same destination into one vehicle. At the time, it was called carpooling—a quaint phrase that evoked a collection of vehicles that were gathered together for a single purpose: To bring people to work. Despite the term, what really was being shared in carpooling was not the car but the ride itself.

Fast forward to 2017 and the definition of ride-sharing has flipped: Rather than a collection of cars owned by many people, there may be only one vehicle. Instead of a number of riders, there may be only one. The premise of the single purpose was replaced by the multidestination, multipurpose proposition—one that can even bring in some revenue for vehicle owners. Now it’s not the ride but the vehicle that is being shared. An element of ride-sharing splinters into ride hailing services such as Uber and Lyft.

Down the road, the evolution of ride-sharing and ride-hailing will be taking a quantum leap. Vehicle sales will drop as transportation options expand. Cars will be truly independent, driving, parking and recharging on their own—even to the point of looking for freelance work: If Honda and other OEMs have their way, autonomous cars will pick up riders and drop them off while their owners are busy doing something else.1

As a whole, the United States might be buying more cars than ever, but the patterns of who owns those cars are changing. The number of American households without a car has been increasing since 1960.2 Millennials, for example, are less interested than baby boomers in buying cars, preferring the freedom of ride-hailing over the hassle of ownership. This could mean the beginning of a trend towards specialized vehicles specifically built for these services—and the consequent reduction of private-use vehicles.3

What can automotive and aftermarket suppliers do to prepare for this brave new world? As technology becomes a greater component in the auto supply chain, suppliers will have to compete or work with new competitors—many of them from outside the auto industry. Auto industry executives will have to be nimble as they monitor industry trends and consider new business models as they plan for long-term growth.

Ride-sharing has not evolved into a dystopian nightmare but a great opportunity for auto suppliers. The future of automotive innovation is no longer determined by automakers alone—and it never should have been. While signs point to a decrease in car ownership on the horizon, this only opens up opportunities for a future of shared mobility solutions to come into play. Customer service and support will continue to be a priority among many suppliers, and a notable percentage are offering increased technical support and other value-added services to OEMs and, ultimately, to end users.

Studying and adapting to the changes in that technology will be central to the strategy of OEM suppliers that make the parts and the aftermarket companies that service them.

1. Etherington, D. “Honda’s NeuV is a mini electric concept car with emotional intelligence” (Jan. 5, 2017) Techcrunch.com
2. Siu, J. “Number of Households Without a Car Increasing” (Oct. 18, 2013) AutoGuide.com
3. Gao, P. et al., “Disruptive trends that will transform the auto industry” (Jan. 2016) McKinsey & Company

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Lawrence Keyler
Global Automotive Sector Leader


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