GM is piloting a new P2P car-sharing service

Mar 15, 2018

GM will start piloting a new peer-to-peer (P2P) car-sharing service this summer that will allow GM car owners to rent out their vehicles when they're not using them, according to Bloomberg.

Owners of GM cars, including Chevrolets, Buicks, and Cadillacs, will be able to make their cars available on GM's Maven car-sharing platform for other drivers to rent and will split revenue from bookings with the automaker. While the tests will initially be conducted as part of Maven, the automaker hopes to spin them out into a separate business segment if these pilots are successful. It's unknown exactly which geographies the company will test this service in, though it will likely be in areas where Maven already operates.

This move gives the auto giant an opportunity to expand its existing portfolio of mobility services. Like most automakers, GM is in the middle of a transition toward offering mobility services alongside its traditional vehicle sales revenue streams. Its Maven car-sharing service already allows users to rent cars from a fleet owned by GM, and the company plans to offer an autonomous ride-hailing service, like the one it's testing with employees of its Cruise autonomous car division in San Francisco, starting sometime next year. This new P2P service adds to these emerging revenue streams for the automaker.

However, GM will face a tough competitive landscape from several startups that have been in the space for at least a few years and raised millions of dollars. Turo, for instance, already counts 5 million users in the US and Europe — more than traditional car-sharing services like Zipcar and Car2Go — and has raised a total of $172 million. The company also likely benefits from an innovative brand reputation among early adopters since it pioneered P2P car-sharing back in 2009. GM has a large base of potential users among its car owners, but it needs to figure out how to effectively market the car-sharing service to that audience.

Moreover, other automakers like Ford are also increasingly betting heavily on shared mobility services and could explore the market in the future as part of their own growing efforts. Nonetheless, these pilots will give GM a chance to test consumers' appetite for P2P car-sharing and potentially grab a larger share of a global mobility services market that will be worth an estimated $2.2 billion in 2030.

This pilot service also mirrors Tesla's ambitions for driverless cars, which means the companies will likely eventually compete head-to-head for customers. Elon Musk, the CEO of the electric vehicle (EV) maker, wrote in a blog post in mid-2016 that the company hoped to sell its self-driving cars to consumers who can make them available to the "Tesla Fleet" that will be available to the general public for ride-hailing. While these vehicles will likely be significantly more expensive than their manually driven counterparts for at least the first few years they are available, buyers would theoretically offset that cost through the money they earn from giving rides.

Once GM releases fully autonomous cars, it could leverage this new P2P car-sharing service to launch a similar service. This would, at least in theory, broaden the availability of GM's autonomous cars, allowing them to capture more rides than it would if it only operated its own fleet of autonomous vehicles.

Source: Business Insider