One of the biggest problems with urban living is the headache caused by traffic gridlock. Could unattended retail be the solution?
According to a United Nations study released last year, cities are home to more than half the world’s population. That figure is expected to rise dramatically to two-thirds by the middle of the century. And to paraphrase the late rapper, the Notorious B.I.G., more people mean more problems.
As city populations grow, traffic congestion is likely to worsen because more residents will require more transportation options. Based on modes of transportation available today, this means more vehicles will clog city streets, and rush hour, already a misnomer in many metropolitan areas, could transform into an around-the-clock, bumper-to-bumper cluster fest.
In anticipation of a new glut of residents, some urban communities are encouraging alternatives to vehicle ownership, such as car-sharing services. These unattended vehicle solutions are geared toward urban residents who need access to a vehicle they can operate themselves but don’t want to own or lease. Notable players in car sharing, like Zipcar or car2go, can provide urban dwellers with convenient access to wheels without the higher expenses involved with ownership. These unattended services allow occasional motorists to reserve and unlock a car via smartphone app (or, in Zipcar’s case, a Zipcard) and then return it to a designated parking space when they’re done with it.
Even automakers like Ford and Toyota are now testing the car sharing market, as vehicle ownership patterns change. Last year, General Motors (GM) revealed its own road map to the car sharing market with the launch of its service, Maven. Since its rollout last year, the program has expanded into 14 markets nationwide.
PYMNTS recently caught up with Bob Tiderington, senior manager of member management and operations for General Motor’s Maven service, about how Maven and other unattended car-sharing programs are reshaping urban mobility. Tiderington also discussed GM’s newest service, Maven Gig, a platform specifically designed to help workers participating in the growing gig economy.
Accessibility Without Responsibility
City residents who need access to a car can sign up for Maven by downloading the program app and registering for the service. The app enables customers to locate vehicles and make reservations. The smartphone acts as a fob key that allows the customer to both access the car and start the engine using the Maven app.
Rates start at $8 per hour, and customers can return the car to a designated Maven parking space once they’re done using the service. Maven vehicles also offer features like Apple CarPlay, 4G LTE Wi-Fi and access to GM’s OnStar service, which provides features like hands-free calling and navigation.
Tiderington sees GM’s investment in a car-sharing program as a way to offer city dwellers on-demand access to vehicles.
“There’s always going to be a contingency of folks in the world that want to drive cars and have control of the steering wheel,” he said. “At the same time, in more and more cities, car ownership will continue to become more and more of a challenge.”
The challenge to which Tiderington is referring is the expected growth of city populations. As more people move to cities, city leaders and urban planners are working on solutions to ease up congestion.
Tiderington said both city leaders and automakers can benefit from unattended car share programs. For policymakers, these programs offer residents access to vehicles with designated parking spaces. For automakers like GM, the programs create opportunities to tap into new lines of revenue from rentals and can act as extended test drives, which could serve to foster sales.
With city populations growing, Tiderington sees an opportunity for car-sharing programs to help urban planners prevent an urban mobility nightmare from becoming a reality through excessive traffic gridlock.
“Operating a [car-sharing] service versus selling everybody a car, in some parts of the world, just frankly makes better sense,” he said.
In other words, trying to get everyone in an urban setting to own and operate a car is just a recipe for disaster and could cause a spike in traffic snarls. By some accounts, the average U.S. commuter loses 42 hours each year stuck in traffic jams. Tiderington sees an opportunity for car-sharing programs to help ease street congestion by reducing the need for individuals to own cars and, in turn, reduce the number of cars on the road. Plus, by offering designated parking spaces, the services can reduce the time motorists spend looking for parking spaces.
A review of another unattended car-sharing service reached a similar conclusion. Last year, a UC Berkley study of car2go’s offerings in 2015 across five major North American cities found the service had the equivalent impact of removing more than 28,000 vehicles from the road and reducing greenhouse gas emissions by up to 14 metric tons per year.
Delivering Mobility for Gig Workers
According to the latest PYMNTS.com Gig Economy Index™, the number of people employed in some type of gig work in the U.S. has grown in recent years to 55 million workers, or roughly 35 percent of the population. To tap into this market potential and address the needs of this emerging workforce, GM recently introduced an offshoot of Maven, one specifically helping the gig economy.
Maven Gig, launched in early May, is billed as an option to provide gig workers access to vehicles for delivery and transportation-related jobs. The service will initially provide customers with a Chevrolet Bolt EV that can be rented for $229 a week. The service can be used by freelance drivers to deliver packages, food orders or groceries or for rideshare services.
The service is currently available in the San Francisco and San Diego markets, and the company has eyes on expansion into Los Angeles later this year. Maven Gig has already partnered with some notable companies that rely on gig workers for driving-related work, including Lyft, Uber, GrubHub, InstaCart and Roadie.
As the gig economy grows, Tiderington said, so, too, will the role of unattended car-sharing services like Maven Gig.
“At the end of the day, Maven Gig is an enabler for the sharing economy,” he said. “That’s something we look at and say, ‘That’s an opportunity for us.’”
With more workers participating in the gig economy, Tiderington said, GM sees a chance to offer this growing pool of workers access to vehicles without requiring customers to take on the additional expenses associated with vehicle ownership, such as insurance or maintenance fees.
“For those folks who are out there and may not have the means to go out there and flat-out purchase or lease a vehicle … they have the opportunity to participate in this type of economy at a much lower, more cost-effective rate,” he said.
The Shared Road Ahead
To date, Tiderington said Maven customers have collectively driven over 145 million miles. Data from how customers are using the vehicles could help inform what markets the unattended car-sharing service should expand into next.
“We definitely will look at certain behaviors of those that are using our vehicles,” he said. “Holistically, it helps us to understand on a micro level what kinds of locations around the city we should be looking at for additional stations or locations.”
As an example, Tiderington said that if a large number of customers were using the service to drive from Chicago to Indianapolis, GM might decide the Indianapolis market should be considered for a new Maven location. In other words, as long as urban residents want access to vehicles without the costs and responsibilities associated with ownership, automakers and other players in the car-sharing industry are prepared to offer their own mobility solutions.
Looking ahead, Tiderington sees no indication that demand for services like Maven will wane anytime soon. The global car-sharing market, which includes rideshare services like Uber and Lyft, is expected to grow to $16.5 billion by 2024, as urban centers seek to reduce carbon emissions and encourage city residents to participate in car-sharing programs.
As the market grows, Tiderington expects Maven and its parent, GM, to play an active role shaping its future.
“I think we’re on a good path,” Tiderington said. “I think we’ll continue growing not only as an automotive company, but as a true mobility solutions provider going into the future.”
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The PYMNTS.com Unattended Retail Tracker™ serves as a bimonthly framework for the space, providing coverage of the most recent news and trends, as well as a provider directory to highlight the key players contributing across the segments that comprise the expansive unattended retail ecosystem.