By Alex Thibault
We are in the middle of a tectonic shift in the market for mobility services. Organizations small and large are diving in every week and becoming operators in a space they wouldn’t have considered 10 years ago.
For a number of good reasons, car manufacturers and distributors, oil and gas companies, insurance providers, car rental operators, startups and even—you guessed it—parking lot operators are positioning themselves to grab different portions of a pie poised to grow exponentially in the next few years. Some of those reasons are:
- A gigantic opportunity. A recent McKinsey study concluded that new mobility services will generate revenues of $5 trillion in 2030, compared to $30 billion in 2016. To give a reference point, the entire automotive market, including car sales and aftermarket products and services, currently stands at about $3.5 trillion and it took close to 110 years to create that much value. A $1.5 trillion market will appear in about 15 years, representing a compound annual growth rate of 30 percent over an extended period. Simply put, this could be one of the biggest opportunities we will see in our lifetime.
- The shift from product to services in the mobility industry is only beginning. Historically, the companies that have owned the lion’s share of the mobility space have been car manufacturers. Their growth was built on a model where individual car ownership was the de facto option, with the only day-to-day alternative being public transit in high density areas. Now, ride-hailing services offer convenient transport options around the globe and free-floating carsharing offers a cheap and flexible option for most commuters and people who need to get around a city.
However, when a service like Uber has the worst public image period in its history and still reports that revenues are up 17 percent from the previous quarter and car2go reports use up 40 percent from a year earlier, one can only infer that the appetite for mobility services is still far from being satisfied globally. Very far.
Alex Thibault is general manager, North America, with Vulog. He will speak on this topic at the 2018 IPI Conference & Expo.