In more ways than one, America was built on cars. Roosevelt, Ford and other massive American icons built their fortunes and established their industrious ideals through the popularity of the automobile, and thousands of towns and cities across the country could not currently exist without motorized vehicles. Even American culture runs on cars — the latest and greatest vehicles are always highly visible in glossy magazines or in blockbuster movies.
And yet, many futurists and economists predict that the end is nigh for the era of cars. Thanks to ride hailing services like Lyft and Uber, car sharing platforms like Zipcar as well as advanced machine learning technology that allows for autonomous driving, cars as we know them could be a thing of the past. If that’s true, how is the automobile industry responding — and how can entrepreneurs capitalize on disruption at such a massive scale?
The Auto Industry Is Trying to Pivot
Auto manufacturers aren’t blind to the changes occurring within the transportation sector. In fact, many have been more than aware of shifting consumer interests for years — but because of the hulking size of most manufacturers, it is easier to say that change is coming than to ensure that change occurs. In fact, a few manufacturers have taken major steps to remain relevant in a world that is increasingly less interested in personal vehicle ownership. For instance, some popular moves include:
Entering the ride hailing market. Several manufacturers have their own ride hailing brands while others have partnered with existing ride hailing companies. For instance, Toyota has a partnership with Uber and GM is pairing with Lyft. In both cases, investing in ride hailing (or ridesharing, as it is more often known) allows automakers to enjoy continued profits from the use of their vehicles, not just from the sale of them.
Participating in car sharing. Like ride hailing, car sharing gives carmakers the opportunity to continue capitalizing on their product, and several manufacturers have created their own car sharing apps. A good example, BMW, Daimler and Volkswagen all have exceedingly popular car sharing services. Car sharing could promise to be even more popular than ride hailing because it gives users more autonomy and privacy, and it could be faster and more convenient, especially for users in cities.
Attempting small sharing. Ride and car sharing are well and good, but a vehicle isn’t necessary for every trip. Thus, many consumers are turning toward smaller means of transportation, like scooters, bikes and skateboards — and automakers are looking there, too. Ford has recently bought the scooter sharing startup Spin, and this is the first of undoubtedly many manufacturers to invest in a small transport option.
Offering exclusive vehicle features. Ride and car sharing are well and good, but they often don’t allow drivers or passengers to access the features they crave; rather, users are forced to accept the vehicles available to them in the ride and car sharing fleets they subscribe to. Features for vehicles are becoming awesomely high-tech, including on-board wi-fi as well as enhanced performance and safety. The allure of these features is causing many would-be defectors to remain in the realm of personal vehicle ownership.
Entrepreneurs Can Move Faster
The auto industry is moving fast to keep up with consumer demand — but entrepreneurs with smaller, more agile startups can move faster. Without the weight of an established brand and bureaucracy, entrepreneurs can slip into markets and target niches more effectively than large, lumbering automakers. Especially with the help of car rental software and similar tools, it is easier than ever to develop a product for the transportation industry and carve out a profitable space previously occupied by personal car ownership.
America is slowly but surely losing its love of cars. However, contrary to what many economists have feared, this is not resulting in the swift devastation of vehicle manufacturers. Rather, manufacturers are taking deliberate steps to remain relevant as consumer tastes shift — but whether or not they find success depends largely on the intelligence and speed of entrepreneurs, who could outperform automakers with relative ease. The future of transportation has yet to be written, which means this major part of American culture continues to be up in the air.