How is Daimler aligning car2go with its strategy and competencies?
Mobility is going to change in the future. Therefore, all mobility companies need to position themselves in the market for new mobility concepts. The development of a modern mobility concept requires a great identification of the employees with the concept. Therefore, car2go employees can use the mobility service for free to increase their identification with the service. For the company it is important to develop new competencies to serve new mobility needs.
Additionally, we all know that Google and other digital companies are also developing mobility services and products. Therefore, it is important to be very attentive to the market development, while not developing to fast, since this bears the risk to loose the customer. The customer is not always as fast as the market development.
The business model of car2go requires to put the customer always in the center of interest, since the customer can always decide which kind of mobility service suits his needs best.
What are the key resources and competencies to deliver the value proposition of car2go?
IT and digital competencies are increasingly in the center of interest for car2go. Earlier, the rental cars could be rented by using a chip card, now cars can in some destinations only be rented through the smartphone. This digital change also includes the car2go app, which is a key element as digital solution for the customer interaction. Furthermore, car2go reduced the number of physical stores like in Vienna and Berlin – everything takes place online or through the hotline.
How is car2go observing the market development?
The business development and business strategy department are central for observing the market development. When we are doing market research, we are not only looking at ourselves but also at the competitors. It is possible to learn from competitors and to analyze how to position car2go in relation to other mobility services. Therefore, we also integrate the customer perception in our analysis. Many customers in the car sharing market are using different offerings to have a high availability of cars. Therefore, many customers developed their own portfolio of mobility services, since modern free-floating concepts like DriveNow or car2go do not charge a basic tariff. This allows the customer to decide individually, which mobility service is suited best for his use case.
Therefore, the market and relevant competitors need to be observed very carefully. Ideally, car2go wants to be top of mind for any kind of mobility use case.
How is car2go making money?
The usage fee is the only source of revenue for car2go. All other sources of income streams are only used to cover the respective costs.
Does car2go also offer other benefits besides the monetary benefits?
The visibility of the product in the street has an effect itself, since potential customers notice the cars. This is a way of an intelligent product placement. Furthermore, the opportunity to rent a car for a small price is a good way for customers to experience a car without actually buying the product. For instance, car2go introduced recently in Berlin besides the Smart cars also Mercedes-Benz cars for the car sharing.
3. Market based view
Who are the closest competitors in this market?
The competitors always need to be seen in regards to the relevant market, since car2go operates on three continents in 31 cities. Nevertheless, in Central Europe the main competitor is DriveNow of BMW, since the service is very close to car2go in terms of the free-floating concept and the pricing model. In the USA, Uber is a main competitor – not because the service is similar, but the use case for the customer is the same. Furthermore, there are smaller regional competitors in many cities.
How relevant is the entry of new competitors into the market?
The market for mobility services has relatively high market entry barriers. To start a car sharing company, high investments are required in the operation of the system. Without the required funding capital and know-how about the specifics of the market it is very difficult to enter the market. I cannot imagine that a new company is really able to become a dominating force in the market.
How is car2go differentiated from its competitors?
Offering the Smart as car for the car2go mobility service is a differentiating factor. It is a small car with only two seats that fits in almost any parking lot and is very effective in the traffic of big cities.
This is the key differentiator to the DriveNow concept. In other markets, car2go is differentiated through the free-floating business model. But the Smart remains also in these markets the greatest differentiator. Hence, the Smart as a product and the business model are the differentiators of car2go within the market of mobility services.
4. Resource based view
What resources are required for car2go?
IT and digital competencies are increasingly getting to the center of interest for developing the car2go business model. There is the internal car2go infrastructure, which operates all the customer
data, the rides and payments. The cars are coupled to the car2go system, which means that, for instance, cars without gas or with damage are logged off automatically in the back office. In addition, there is a large team that cares about the car2go homepage, the smartphone application and all underlying processes. If a new application or homepage is developed, pre-tests ensure that the customer understands the new offering.
5. Closing
What is your view on the future of the automotive industry?
I think autonomous driving will be a great part of future mobility. This has a great influence on our current mobility schemes, since it supports concepts like car sharing. In my vision of the future, the customer has the need for mobility. Then the car drives to the customer and fulfills the need for mobility. The ownership of the car is not relevant anymore and the dependence on the car moves to the background, since cars can be requested at any time I definitely see autonomous car sharing concepts in the future.
Nevertheless, ethical and legal constraints are great obstacles for the introduction of autonomously driving cars. If a child runs on the road, how should the car react? Should the car hit the tree on the side of the street and threaten the life of the driver or should the car threaten the life of the child?
These are considerations, which need to be programmed and this requires, time and thinking.