Car-sharing, bringing us closer to Autonomous driving

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This weekend I had my first real DriveNow experience. I signed up for DriveNow about 6 months ago to test-drive it and ended up getting billed EUR 119.19 for just 5 minutes of driving and another 10 minutes looking for parking. Truth being told, customer service was excellent and about EUR 15 was all that was deducted from my account. However, I got a free lesson of how to lock and leave the car available for other drivers to pick it up when I was done. In a leap of faith, this weekend I booked a full day package and was happily surprised by the convenience and ease of my DriveNow experience.

What is DriveNow?

DriveNow is a BMW owned car sharing company with an estimated worth of EUR 420 million. DriveNow has over one million customers and operates a fleet of 6,000 vehicles in nine European countries, including the 5 largest cities in Germany. DriveNow is just one of many car sharing services and the concept is not particularly new. So how is car sharing associated with autonomous driving?

Leading the way to autonomous driving

One of the promises of autonomous driving is improved efficiency of the global car fleet. Fortune.com wrote in 2016 how cars are used less than 5% of their lifetime, which naturally present a tremendous opportunity if that number could be flipped, so a car would be used 95% of its lifetime.

Car sharing, in its own right promises reducing congestion on roads and improving the efficiency of the car. The fact that a woman can take the car to work, and then a colleague can drive that car across town for a meeting, a student can then take the car to class, where from a dad can take his kids to football practice, is alone significantly improving the utilization of the car.

What the car sharing companies are normalizing the customers to, is NOT to own a car but to share it. They are making the customer comfortable relying on an app to get them a car when and where they need one. They are paving the way for a world where individuals don’t own cars and where all transportation operates on demand.

What is in if for BMW?

DriveNow, 100% owned by BMW, is one of the leading car sharing players in Europe and you might wonder, why is BMW investing in car sharing? Isn’t BMWs main objective to sell more cars and isn’t that conflicts with the concept of car sharing that will lead to fewer cars on the road? That might very well be true, however, what BMW is doing is playing the long term game. Allow me to explain how.

BWMs short term objective is to sell as many cars as possible. However, BMW also know that the tide is turning and that in the long term, just selling cars is not going to be sustainable. Especially in an economy that is transforming from owning to leasing or sharing.

Simply, BMW can choose two paths in an era of autonomous driving. They can become a supplier of autonomous vehicles to the likes of UBER or other service companies. Or, BMW can be the service provider and own the customer relationship.

BMW stands for luxury, quality, big engine and great design. People are willing to pay extra to own a BMW, because of the way it makes them feel. In a world, where no one owns their own transportation the demand for such vehicles will be limited.

The future of the transportation game will be owned by the service provider, not the automobile manufacturer and DriveNow is the vehicle to drive BMW into that new future. With DriveNow, BMW is building a loyal customer base which is being educated to press just one button and get access to the their preferred ride. The game of a service provider is all about having critical mass and BMW is investing heavily in getting a solid footprint with DriveNow in Europe. The question is if they are moving fast enough to compete with companies like UBER or Waymo owned by Google that are heavily investing in autonomous driving.

BMWs advantage might be what UBER and Waymo does not have, an actual car manufacturing line. If BMW can attract critical mass to its DriveNow service and master the art of building autonomous cars, it might be a competitive advantage in the future of autonomous driving.

Published by Alexander Hold

My passion for business started young. As a child, I absorbed lessons on business strategy keenly observing my father as he ran his rising startup. As he drove all over Denmark visiting clients, he took me along for company and on the way taught me the fundamentals of customer obsession and sales. As an adult, I combined my passion for business, with a deep desire to explore the world. I left Denmark at the age of 20, and since then have lived in 5 countries: Australia, Norway, Singapore, Ireland and Germany. Everywhere I have been, I have enriched my knowledge on how business is done in that region, what it takes to win the loyalty of local customers, and how to collaborate across cultures. Coming from hi-tech Scandinavia, I have always been drawn to technology. At Salesforce, I consulted companies on how to leverage the technology giant’s products to innovate on behalf of their customers. Today, I spearhead innovation products and programs for the Global Savings Group (GSG), one of Europe's fastest growing tech companies. I advise partners across 19 countries on smart and personalized marketing solutions. I lead and enable teams to bring innovative products to market. Everyday, I am powered by the same passion that began decades ago. Contact me if you’d like to collaborate on leveraging the power of technology to delight customers and empower teams.