As automakers scramble to evolve+ READ ARTICLE
General Motors announced Thursday the creation of a new car-sharing service, the automaker’s latest move to stay ahead of the curve in a rapidly shifting automotive landscape.
The service, called Maven, will offer customers access to vehicles waiting to be picked up around a given city, similarly to existing platforms like Zipcar and Car2Go. Drivers can reserve and unlock Maven cars with a smartphone app. The vehicles will be decked out with high-tech features, like wireless hotspots, OnStar support and the latest smartphone-syncing software from Apple and Google.
Maven’s car-sharing program will initially roll out in Ann Arbor, Michigan, close to GM’s home in Detroit. Through Maven, General Motors will also be either expanding or launching new residential car-sharing programs in Chicago and New York City, along with other experiments in the U.S. and abroad.
GM’s Maven will be entering a tough business. Zipcar, which popularized the car-sharing idea in cities and on college campuses, sold itself to Avis Budget Group in 2013 after it had trouble keeping profits up. However, Maven will have an advantage in that costs will presumably be lower given its ties to an automaker. And consumers are likely more comfortable with car-sharing programs today than they were three years ago.
General Motors’ Vice President of Urban Mobility Julia Steyn is optimistic about her company’s chances. “Maven goes above and beyond a typical rental company,” she says, highlighting the cars’ technology as a standout feature. “In the winter, things like remote start and remote heating . . . that’s the experience that feels like it’s your own vehicle.”
Maven can best be understood as GM’s response to changing American attitudes about cars. Young Americans in particular are less likely than ever to view car ownership as the coming-of-age rite it has long been considered. A recent study out of the University of Michigan found a notable drop in the number of licensed drivers 25 years old and younger. In part, that’s likely a result of young professionals seeking economic opportunities in large cities, where relying on public transportation and on-demand driving services like Uber is considered cheaper and more convenient than owning and maintaining a vehicle.
That shift in thinking is a threat to automakers, who have long benefitted from suburban Americans’ desire for one or more cars per household. Still more uncertainty comes from self-driving technology, which stands to upend the automotive industry. For GM, offering a car-sharing service is a bulwark against these rapid shifts in the automotive business.
“I think the customer is evolving, and for us the customer is in the center,” says Steyn. “We’re not doing all of this for the sake of doing it. We’re doing it because the millennials wanted it, because the customer demanded it. We’re just evolving with it.”
Jack R. Nerad, Executive Editorial Director and Analyst at Kelley Blue Book, says Maven will also expose GM’s vehicles to younger consumers. Potentially, that will plant the seeds of a future purchase should they decide to own a car later in life.
“While there is some debate over how important ride-sharing services will be in the future, there is no doubt that the top global car companies want to have exposure in the space and gain learnings from early adopters,” says Nerad. “A pilot program like GM’s Maven can not only provide those learnings but can also be a marketing opportunity, exposing GM vehicles to groups that might not otherwise consider them.”
The Maven announcement comes just weeks after the company announced a $500 million investment in Uber rival Lyft, and days after it spent what’s almost certainly a far smaller amount on technology and other parts from Sidecar, another Uber competitor that recently closed up shop. Taken together, these moves mirror similar steps taken by other automakers, including Ford Motor Company, to transform themselves from car builders into so-called “mobility companies” that will provide the transportation options of the future, whatever form they may take.