Car makers and auto parts companies want to make sure you’ll need them to get around, even when urban car ownership plummets, as expected in coming years.
They’re jealous of the Ubers and Lyfts of the world that connect riders to on-demand transportation options, and they’re trying to catch up.
Transportation analysts have painted a picture of the future, and it’s a scary one if you’re a car maker dependent on individual car ownership, and a rosy one if you’re offering some other service like ride-hailing or bike-sharing. More and more people are expected to get around using apps to jump into carpool pickups and unlock bikes to get from the train to the office. So it makes sense that companies like Volvo and Bosch are getting into the ride-hailing and carpooling game. If you can’t beat ’em, join ’em.
That’s why Wednesday Volvo announced its “Volvo Cars Tech Fund.” This is how the Swedish car maker invests in startups, especially those offering digital tools to get around. Already its portfolio includes an Uber partnership through its autonomous car testing program and Luxe, a smartphone app for valet service.
Last week, the German automotive company Bosch announced it was building out a digital transportation services division and acquiring U.S.-based carpooling app SPLT. Bosch cited a 60 percent increase by 2022 in ride-share users around the world — that’s 685 million users who will have choices about which platform they use to get around.
The parts maker is going deeper into car sharing, ride-sharing, and connectivity-based services for car drivers. With SPLT, Bosch hopes to connect people to rides, and unlike Uber or Lyft, it taps into existing trips. SPLT may be small (app data firm Apptopia found the app has been downloaded just over 8,800 times) with its focus on finding rides for businesses, but it’s part of a model that companies want in on: connecting riders to cars already on the road. Jaguar Land Rover’s venture capital group invested in SPLT, along with 10 other transportation tech companies like Lyft, last year. The interest in carpooling is strong.
The Bosch partnership was logical, as SPLT founder and CEO Anya Babbitt explained in a phone call last week. Two years ago her start-up helped Bosch Mexico employees find a better commuting experience with its transportation management tools. The auto research and parts company (it’s better known outside the U.S. for its transportation technology and research) over time was more involved with the SPLT platform and software as a product, not as a commuter tool. Eventually employees weren’t just using SPLT, but improving the app.
“[SPLT] can change the way people commute,” with its on-demand carpooling for companies to offer employees, whether they work at hospitals, universities, or big corporate campuses,” Babbitt said. Bosch saw that it aligned with its transit goals to reduce traffic and connect cities.
Welcome to the road of tomorrow.
Paul Warburton is the Japanese technology company Fujitsu’s head of automotive and he’s long predicted this push toward mobility services, the wonky name given to the industry that includes everything from Uber to dockless bike rentals. He said in an email that companies like Bosch “make moves to increase their value” — like acquiring a small on-demand carpool matching app.
“It will be ambition and vision that will establish the real winners in the industry’s disruption.”
Longer term, Warburton is concerned that companies like Bosch will get stuck providing vehicles and car parts for these apps instead of truly creating the platforms and networks for riders to get around. “It will be ambition and vision that will establish the real winners in the industry’s disruption,” Warburton said.
Yet again, so many other companies are trying to catch up to the Uber model.
GM’s Maven is a car-sharing app that earlier this month expanded to Canada. The service claims to take 10 cars off the road and reduce congestion and car pollution with its access to cars near you that you can rent for only the time you’re using it. It wants to be an alternative to car ownership and paying for someone else to drive you. With recent studies showing services like Uber actually add to congestion with more cars on the road and more reliance on paid rides instead of public transit, the car-share model is trying to disrupt how Uber fundamentally works. The American car maker launched the car-sharing program more than two years ago.
Just this week Ford launched a self-driving food delivery business in the Miami area. While it tests out delivering Domino’s orders and Postmates requests, it’s also testing mapping tools from Argo AI for its autonomous vehicle development.
These types of services will keep cropping up from all sectors of the auto industry. Warburton from Fujitsu even sees insurance companies eventually delving into these platforms with their abundance of driver data. Companies will keep acquiring ride-hailing copycats and car- and bike-sharing platforms in the ongoing battle to get into your daily commute, some how, some way.