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Cars-as-a-service, Alibaba and ridehailing, mental health, and the future of financial services

By Danny Crichton

The future of car ownership: Cars-as-a-service

It’s Mobility Day at TechCrunch, and we’re hosting our Sessions event today in beautiful San Jose. That’s why we have a couple of related pieces on mobility at Extra Crunch.

First, our automotive editor Matt Burns is back with part two of his market map and analysis of the changing nature of how consumers are buying cars these days. Part one looked at how startups like Carvana, Shift, Vroom, and others are trying to disrupt the car dealership’s monopoly on auto sales in the United States.

Now, Burns takes a look at how startups like Fair and premium automakers like Mercedes are disrupting the very notion of owning a car in the first place. Rather than buying a car or leasing one, users with these new services are asked to subscribe to their cars, giving them the flexibility to get a car when they need it and to get rid of it when they don’t. Fair has raised $1.5 billion in venture capital, so clearly the space has caught the eye of investors.

“In simple terms,” co-founder and then CEO [of Fair] Scott Painter, told TechCrunch following its recent raise, “for every dollar in equity we unlock $10 in debt, and we borrow that cash to buy cars.”

Fair works much like a traditional lease with more options. Users can drive the vehicles as long as they’re paying for them and can switch to a different one whenever. This is different from a traditional lease where the buyer is often locked into the vehicle for two to four years. The model makes Fair an excellent option for Uber and Lyft drivers, and in the last year, Uber sold fair its $400 million leasing business to accelerate this offering.

Meituan, Alibaba, and the new landscape of ride-hailing in China

Meanwhile, on the other side of the world, our China tech reporter Rita Liao takes a deeper look at the quickly changing tides of the ride-hailing industry in China. It’s a fight between intermediation, disintermediation, and who ultimately owns the ride-hailing consumer. As transit in China and the rest of the world increasingly becomes multi-modal, who owns the gateway to figuring out the best method and paying for it is increasingly in the driver’s seat:

The future of car ownership: Cars-as-a-service

By Matt Burns

Car shoppers now have several new options to avoid long-term debt and commitments. Automakers and startups alike are increasingly offering services that give buyers new opportunities and greater flexibility around owning and using vehicles.

Cars-as-a-Service

In the first part of this feature, we explored the different startups attempting to change car buying. But not everyone wants to buy a car. After all, a vehicle traditionally loses its value at a dramatic rate.

Some startups are attempting to reinvent car ownership rather than car buying.

Don’t buy, lease

My favorite car blog Jalopnik said it best: “Cars Sales Could Be Heading Straight Into the Toilet.” Citing a Bloomberg report, the site explains automakers may have had the worst first half for new-vehicle retail sales since 2013. Car sales are tanking, but people still need cars.

Companies like Fair are offering new types of leases combining a traditional auto financing option with modern conveniences. Even car makers are looking at different ways to move vehicles from dealer lots.

Fair was founded in 2016 by an all-star team made up of automotive, retail and banking executives including Scott Painter, former founder and CEO of TrueCar.

The future of car ownership: Building an online dealership

By Matt Burns

Buying a car is painful. Dealerships are the worst, and the options are endless. The rise of the Internet produced powerful tools for shoppers, but in the end, most buyers still have to trudge down to a car lot.

For this series of articles, TechCrunch spoke with several founders and investors attempting to rethink car buying. It’s clear these startups are the underdog in this fight. Most consumers buy cars the same way as their grandparents did and for good reason. Dealerships nationwide fought for years to enact laws and regulations that protect their businesses.

Several young companies are attempting to put the dealership online. Companies like Carvana, Shift, Vroom and Joydrive are putting the entire car buying process online, allowing customers to buy, trade-in and even test drive vehicles without talking to a salesman in an oversized golf pullover.

In the next part of this series, we’ll look at companies like Fair that are moving consumers away from purchasing and into short-term leases. Even automakers are trying something new. Tesla sells directly to consumers while Volvo, BMW, Mercedes and others are launching subscription options to give owners even more flexibility.

The three new dealerships

Several companies are building online car dealerships. Shoppers find and buy a vehicle solely through these sites, and often, the cars are delivered to the buyer. These online dealerships even take trade-ins.

Three services dominate this space, and they were all founded in 2013. Carvana, Shift, and Vroom hit the market at the same time but have experienced different paths. One thing is clear though: it takes hundreds of millions of venture capital money to build an online dealership.

Emily Melton, co-founder and managing partner, Threshold Ventures (formally known as DFJ Ventures), points to consumer’s changing expectations and an optimized process across all kinds of vehicles. She invested in Shift’s recent $140m round.

Audi works with Fleetonomy to monitor and manage fleet utilization for its on-demand program

By Jonathan Shieber

Audi just completed a trial with Israeli company Fleetonomy as part of a potential wider rollout of the Israeli company’s fleet monitoring and management services designed to improve utilization.

Using Fleetonomy’s tools that provide predictive analytics of fleet utilization, Audi was able to improve the overall efficiency and utilization of its on-demand services.

Audi has always aspired to provide a great experience by advancing through innovation and technology. By taking an innovative multi-service approach, Fleetonomy’s platform showed great success in improving fleet efficiency while simultaneously reducing costs associated with utilization and operation according to fleet constraints,” said Nils Noack, Mobility Strategy, Audi Business Innovation GmbH. “We’re looking forward to exploring further the opportunity to leverage Fleetonomy’s AI-based fleet management platforms and to pushing Audi’s vision of innovative mobility services.”

Car companies around the world are rolling out on-demand or rental programs for their fleets as a way to replace traditional car ownership. Audi launched its on demand program back in 2015 and has a new version, Audi Select, which rolled out in 2018.

Using data from Germany and San Francisco,  Fleetonomy was able to predict demand and move supply of the Audi fleet around to rebalance vehicle availability in real-time, the company said.

“As the industry transforms, automotive manufacturers are expanding their role as providers of on-demand transportation services and are looking for efficient ways to manage their fleets according to dynamic demand and supply,” said Fleetnomy Co-Founder & CEO Israel Duanis, in a statement. “Fleetonomy provides unique fleet management solutions that help fleet operators automate, optimize and manage smart transportation services that meet current and future industry needs. We are very excited to have taken part in this project and are confident that Fleetonomy can positively influence overall efficiency, as well as enhance Audi’s smart transportation management capabilities in the future”.

Late last year, Fleetonomy snagged $3 million from investors including Vertex Ventures, with participation from Kardan Ventures and VectoIQ.

Now the company will look to expand on its success with other automakers as well as deepen its relationship with Audi.

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