Success Factors for Future Growth of Car Sharing Services (Business, Economics, and Law) 365829888X, 9783658298883

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Jens Kopp

Success Factors for Future Growth of Car Sharing Services

Business, Economics, and Law Series Editors Stefan Zeranski, Wolfenbüttel, Germany Svend Reuse, Essen, Germany

In einer Wissensgesellschaft ist es erforderlich, Erkenntnisse aus sehr guten wissenschaftlichen Arbeiten frühzeitig zu fixieren und mit der Praxis zu verknüpfen. Die Reihe „Business, Economics, and Law“ befasst sich mit a­ ktuellen Forschungsergebnissen aus den Wirtschafts- und Rechtswissenschaften und leis­ tet damit einen Beitrag zum Diskurs zwischen Theorie und Praxis. Sie gibt Anregungen zu Forschungsthemen und Handlungsimpulse für die Praxis. Springer Gabler Results richtet sich an Autoren, die ihre fachliche Expertise in konzentrierter Form präsentieren möchten. Externe Begutachtungsverfahren sichern die Qualität. Die kompakte Darstellung auf maximal 120 Seiten bringt ausgezeichnete Forschungsergebnisse „auf den Punkt“. Springer Gabler Results ist als Teilprogramm des Bereichs Springer Gabler Research besonders auch für die digitale Nutzung von Wissen konzipiert. Zielgruppe sind (Nachwuchs-)Wissenschaftler, Fach- und Führungskräfte. Herausgegeben von Prof. Dr. Stefan Zeranski Brunswick European Law School (BELS) Wolfenbüttel

Dr. Svend Reuse FOM – Hochschule für Oekonomie und Management isf – Institute for Strategic Finance Essen

More information about this series at http://www.springer.com/series/11633

Jens Kopp

Success Factors for Future Growth of Car Sharing Services With a foreword by Dr. Ludger Dohm

Jens Kopp Essen, Germany

ISSN 2625-6959 ISSN 2625-6967  (electronic) Business, Economics, and Law ISBN 978-3-658-29888-3 ISBN 978-3-658-29889-0  (eBook) https://doi.org/10.1007/978-3-658-29889-0 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2020 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer Gabler imprint is published by the registered company Springer Fachmedien ­Wiesbaden GmbH part of Springer Nature. The registered company address is: Abraham-Lincoln-Str. 46, 65189 Wiesbaden, Germany

Foreword With the publication at hand, based on his master thesis, the author Jens Kopp intensively engages in the current economically and ecologically relevant debate on new mobility solutions in road-based passenger transport. After an overview of new forms of mobility, the macroeconomic goals pursued with them, and the research objective of the thesis at hand, he arrives at an initial analysis of the mobility industry and the disruptions triggered by a global "Rethinking of Mobility". From the author's point of view and from statistical data on mobility, shared mobility plays an increasing role, especially the current mobility concepts of Ride Hailing and car sharing. Not necessarily car ownership, but access to and availability of mobility services increasingly determine consumer preferences. The few existing scientific studies on the use and user behavior of car sharing focus on the USA and hardly any on European markets. This coincides with the fact that car sharing penetration is still low in Europe. The existing studies are comprehensively reviewed and evaluated in this book in a full chapter. The author then sets himself the ambitious research objectives, firstly, to identify systematic socio-demographic profiles of actual and potential car sharing users in Germany that drive the demand for car sharing. He explores this through an empirical study. Secondly, this study enables him to discuss the growth potential of car sharing in Germany and other markets. Thirdly, the author makes recommendations to the mobility industry for a successful design of the mobility service car sharing. The empirical research methodology, development of an online questionnaire and selection of a relevant sample of potential users in Germany is presented in a detailed, very transparent and scientifically robust manner. With his results, the author arrives at very clear statements about statistically significant factors influencing the car sharing use of potential users. In three multivariate regression analyses, the author derives explanatory hypotheses that partly confirm the evaluated research, while also convincingly drawing new insights from this empirical study, e.g. the consistently strong influence of cost savings as a motivation for car sharing use which has not been identified in this way to date. In the concluding chapter the work provides empirically supported recommendations to mobility service providers for improved design and marketing of car sharing services, for greater market penetration, and even describes implications for OEMs. Finally, the author provides suggestions for further research on the topic against the background of the increasing practical relevance of shared mobility concepts. In the Germanspeaking countries, this publication thus represents comprehensive research with practical transfer on the topic of car sharing and a classification of car sharing within the overall framework of "New Mobility".

Essen, February 2020

Dr. Ludger Dohm, Lecturer at FOM

Table of Contents 1 Introduction ........................................................................................................................... 1 1.1

Problem Statement and Objective ................................................................................ 1

1.1.1

Rethinking Mobility .............................................................................................. 1

1.1.2

The Transformation in the Automobile Industry .................................................. 2

1.1.3

Aim of the Thesis .................................................................................................. 3

1.2

Approach and Research Method .................................................................................. 4

2 Literature and Research Review ............................................................................................ 5 2.1

State of the Automobile Industry: Porter´s Five Forces .............................................. 5

2.1.1

Rivalry between Competitors ............................................................................... 6

2.1.2

Negotiation Power of Suppliers ............................................................................ 7

2.1.3

Negotiation Power of Customers .......................................................................... 8

2.1.4

Threat of Substitutional Products .......................................................................... 9

2.1.5

Entrance of New Competitors ............................................................................. 10

2.2

Trend of Mobility Services ........................................................................................ 10

2.2.1

Current Development of the Industry ................................................................. 11

2.2.2

The “Mobility Industry” ..................................................................................... 12

2.2.3

Car Sharing ......................................................................................................... 14

2.2.4

Ride Hailing ........................................................................................................ 16

2.3

Car Sharing In-Depth ................................................................................................. 17

2.3.1

State of the Concept and User Profile ................................................................. 18

2.3.2

Impact of Car Sharing ......................................................................................... 20

2.3.3

State in Germany................................................................................................. 22

2.4

Conclusion of Literature and Research Review ......................................................... 25

2.4.1 Summary ............................................................................................................. 25 2.4.2 Open Issues in the Literature and Research Hypotheses .................................... 27 3 Research Design .................................................................................................................. 31 3.1

Research Approach .................................................................................................... 31

VIII

Table of Contents 3.1.1

Aim of the Research ............................................................................................ 31

3.1.2

Chosen Research Methods .................................................................................. 32

3.2

Research Description ................................................................................................. 33

3.2.1

Sample and Distribution ..................................................................................... 34

3.2.2

Survey Structure.................................................................................................. 34

3.3

Descriptive Summary of Results................................................................................ 36

4 Evaluation of the Research .................................................................................................. 39 4.1

Application of Research Methods .............................................................................. 39

4.1.1

Proportion Tests and t-Test ................................................................................. 39

4.1.2

Correlation Analysis ........................................................................................... 42

4.1.3

Multiple Linear Regression Analysis .................................................................. 45

4.2

Key Findings .............................................................................................................. 48

4.2.1

Assessment of Hypotheses .................................................................................. 48

4.2.2

Key Factors for Car Sharing Use ........................................................................ 50

4.3

Connection to Existing Literature and Research ........................................................ 52

5 Conclusion ........................................................................................................................... 55 5.1

Summary and Evaluation ........................................................................................... 55

5.2

Limitations ................................................................................................................. 57

5.3

Outlook and Implications ........................................................................................... 59

List of Literature....................................................................................................................... 63 Appendix .................................................................................................................................. 75

List of Figures Figure 1: Porter’s Five Forces model ......................................................................................... 6 Figure 2: Key parties in the mobility industry ......................................................................... 13 Figure 3: Number of registered car sharing users in Germany, from 2008 to 2019 ................ 23 Figure 4: Overview on the survey structure and its four parts ................................................. 36 Figure 5: Sample overview on socio-demographic factors and car sharing evaluation ........... 37 Figure 6: Comparison of highest and lowest ranking means in independent variables ........... 38 Figure 7: Overview on sample data divided into certain socio-demographic groups .............. 40 Figure 8: Individual findings of proportion tests ..................................................................... 41 Figure 9: Individual findings of t-tests ..................................................................................... 42 Figure 10: Independent variables correlating with the dependent variable “How do you assess the future of car sharing” ............................................................................. 44 Figure 11: Results of the regression analysis for the dependent variable “How do you assess the future of car sharing” ............................................................................. 46 Figure 12: Regression equation for the dependent variable “How do you assess the future of car sharing” ........................................................................................................ 47 Figure 13: Regression equation for the dependent variable “How do you rate car sharing” ... 47 Figure 14: Regression equation for the dependent variable “Can you imagine using / continuing to use car sharing” ................................................................................ 48 Figure 15: Summarized results of hypotheses.......................................................................... 50 Figure 16: Independent variables not correlating with any of the dependent variables ........... 51 Figure 17: Three final regression equations ............................................................................. 52 Figure 18: Categorization of relevant factors from research .................................................... 57

List of Abbreviations ADAC

Allgemeiner Deutscher Automobil-Club (General German Automobile Club)

CO2

Carbon dioxide

FOM

Fachhochschule für Ökonomie und Management (University of Applied Sciences for Economics and Management)

OEM

Original Equipment Manufacturer

SME

Small and Medium Enterprises / Small and Mid-sized Enterprises

SUV

Sport Utility Vehicle

TNC

Transportation Network Company

USD

United States Dollar

List of Formulae Formula 1: Basic Pearson correlation formula ......................................................................... 42 Formula 2: Pearson correlation formula for multiple correlation analysis .............................. 43 Formula 3: Multiple linear regression analysis formula .......................................................... 45

Abstract In view of stagnating car sales, saturated markets and increasing levels of pollution and traffic congestion in cities, this thesis analyses the potential of car sharing as a new mobility solution in light of progressive urbanization and researches factors influencing the use of car sharing to assess the growth outlook of car sharing services. For this purpose, a regression analysis is performed to identify statistically significant factors influencing the use and evaluation of car sharing services. Proportion and t-tests are conducted to verify or falsify the socio-demographic profile of car sharing users and further hypotheses as established by current literature and research. The basis for this is an empirical field research conducted in the form of a survey of current and potential car sharing users in Germany (n= 175). Key findings include that cost saving is the only researched factor relevant to influence the use of car sharing services as well as the evaluation of car sharing and the assessment of its future. Drives to the supermarket and weekend or leisure trips are the most significant use cases that influence the use of car sharing. The growth potential of car sharing services is assessed as positive. The existing research shows that car sharing is a viable lever to address substantial ecological and economic mobility issues and the conducted research provides new insights on the factors influencing the use and evaluation of car sharing services, which providers can incorporate into their strategy and advertising.

Key words – Car sharing, Mobility solutions, Modern mobility, Urbanization, Car sharing user characteristics, Automobile industry, Mobility Industry, Regression analysis

1

Introduction

For decades, the car has been the most important means of transport for people. Owning a car has become the standard for many, and as a result yearly car sales have continuously grown. The resulting pollution and traffic congestion in cities has increased accordingly, and the issue has gained more and more attention with growing awareness of the environmental impact. Modern mobility solutions have emerged and promise to at least partially address these problems. Car sharing services such as car2go and ride hailing services such as Uber are offering a new form of mobility, and they are growing in popularity. But are these concepts viable? What are the reasons people use these services? Do they have serious growth potential or are they destined for a niche market with a limited customer base? 1.1

Problem Statement and Objective

This section provides an overview of the general topic and underlying issue of the thesis. The changing perception of mobility, the implications for the automobile industry, and the corresponding aim of the thesis are described. In this context, a distinction between the terms “automotive industry” and “automobile industry” is made. The term automotive industry refers to all parts of a vehicle with a more technical focus on engines and equipment parts provided by suppliers, while the term automobile industry focuses on passenger cars as finished products.1 The focus of this thesis is on passenger cars and therefore the term automobile industry is used. 1.1.1 Rethinking Mobility Progressing urbanization and an increasing need for mobility continue to enlarge the volume of traffic on the roads worldwide.2 The global urbanization rate has increased strongly over time from 30 % in 1950 to 55 % in 2018, and it is expected to rise to 68 % by 2050.3 As a result, traffic congestion in cities has further intensified over recent years and led to growing problems of noise, pollution, and lack of parking spaces, thus creating the need for new forms of flexible mobility.4 Transport contributes almost one quarter of the total greenhouse gas emissions of Europe and is the main cause of pollution in cities.5 One of the reasons for this development is

1

Cf. Tiwari, R., Herstatt, C., Aiming Big with Small Cars, 2014, pp. 105-106.

2

Cf. Goll, F., Knüttgen, I., Digitale Revolution, 2017, p. 397.

3

Cf. United Nations, Urbanization Prospects, 2019, p. 10.

4

Cf. Kagermann, H., Mobilitätswende, 2017, pp. 357-358.

5

Cf. European Commission, Mobility, 2016, no page number.

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2020 J. Kopp, Success Factors for Future Growth of Car Sharing Services, Business, Economics, and Law, https://doi.org/10.1007/978-3-658-29889-0_1

2

Introduction

the proliferation of cars and the general growth of the population in cities.6 The awareness of society as a whole has changed in recent years, however, and concerns about ecological and social impacts have increased. Growing concern about climate change has made concepts of collaborative consumption or sharing solutions an attractive alternative for consumers.7 The sharing economy enables the organized and shared use of resources and is an emerging economic and technological concept driven by the development of information technology and information systems.8 Younger generations show declining interest in owning their own cars and are instead looking for more modern mobility solutions.9 Car sharing is a particularly promising part of the sharing economy which provides a potential solution to issues resulting from the ongoing urbanization and demand for new mobility concepts.10 Cars are only used around 3 % of the time, while during the remaining 97 % of their lives they are parked somewhere.11 Car sharing therefore promises more efficient use of automobiles as a shared resource, and users do not have to worry about ownership issues such as maintenance and repair costs.12 The term car sharing describes the organized, joint use of vehicles by a larger number of people. In contrast to traditional forms of daily or weekly rentals, the vehicles are billed by the hour or minute and can be returned at any time.13 Increased use of such shared mobility services could decrease private car ownership and thereby also pollution and traffic congestion in cities. As a result, car sharing is gaining relevance as an alternative means of transport, especially in metropolitan areas in North America and Europe.14 However, it is still unclear whether car sharing will continue to grow or settle as a niche solution with a limited customer base.15 1.1.2 The Transformation in the Automobile Industry The automobile industry is facing a number of challenges due to the developments of recent decades. The demand for sustainable mobility has risen sharply as a result of increasing urbanization and environmental awareness. Political regulations such as the Paris Climate Agreement of 2015 have brought the mobility sector (and in particular the automobile industry) into focus and raised expectations for lower pollutant emissions from cars and more environmentally

6

Cf. Guirao, B. et al., Free-Floating Car sharing, 2018, p. 244.

7

Cf. Herrenkind, B. et al., Car sharing, 2019, pp. 208-209.

8

Cf. Hamari, J. et al., Sharing economy, 2016, p. 2048.

9

Cf. Schleiffer, N. et al., Mobilitätsverhalten, 2017, p. 12.

10

Cf. Herrenkind, B. et al., Car sharing, 2019, p. 209.

11

Cf. Bates, J., Leibling, D., Parking policy, 2012, p. 24; infas, DLR, IVT, infas 360, MiD Ergebnisbericht, 2018, p. 70.

12

Cf. Herrenkind, B. et al., Car sharing, 2019, p. 209.

13

Cf. Pieper, N. et al., Intermodalität, 2013, p. 381; Cf. Kortum, K. et al., Free-Floating Car sharing, 2016, p. 329.

14

Cf. Guirao, B. et al., Free-Floating Car sharing, 2018, p. 244.

15

Cf. Clewlow, R. R., Mishra, G. S., Disruptive Transportation, 2017, p. 4.

Problem Statement and Objective

3

friendly mobility solutions.16 Furthermore, new mobility concepts such as car sharing and ride hailing reflect a change from cars as a product to mobility as a service.17 More and more people no longer feel the need to own a product when they can rent it instead to optimize factors such as time, cost, and quality. Cars are assessed with a stronger focus on costs over their entire lifecycles and their offerings in terms of flexibility, comfort, and lifestyle aspects. To meet this changing demand, automobile manufacturers (or OEMs, Original Equipment Manufacturers) are rethinking their position and strategy in the automobile industry. Offering mobility solutions enables them to maintain a customer relationship even if the customer no longer buys his own car.18 The promise of shared mobility solutions as a method of decreasing traffic congestion is still debated. The idea is that the shared use of vehicles will decrease private car ownership, improve multimodal transport use, and combine different modes of transport, though opponents argue that it will instead dissuade people from public transport and increase road congestion.19 However, there is agreement on one point: these new mobility solutions have a significant impact on the understanding of mobility and have begun to disrupt the automobile industry and its players, indicating a possible paradigm shift.20 1.1.3 Aim of the Thesis The rethinking of mobility in society, the emergence of new mobility solutions, and the resulting impact on the automobile industry are important topics of interest that require further analysis.21 Mobility is a key aspect in modern life, and the automobile industry employs hundreds of thousands of people in Germany alone, making it one of the most important industries in the country.22 Progressive urbanization and the resulting high pollution and congestion levels in metropolitan areas require sustainable answers for future urban living.23 Modern mobility concepts such as car sharing are still developing, and their full growth potential, future, and impact on the industry are difficult to assess.24 The aim of this thesis is to research the characteristics of current and potential car sharing users to derive the key success factors that influence the use of car sharing. Based on these findings and a detailed review of existing literature and research,

16

Cf. Goll, F., Knüttgen, I., Digitale Revolution, 2017, p. 391.

17

Cf. Clewlow, R. R., Mishra, G. S., Disruptive Transportation, 2017, p. 5.

18

Cf. Neumann, K-T., Mobilitätsanbieter, 2017, pp. 380-381.

19

Cf. Tils, G. et al., Car sharing, 2015, p. 5; Schaller, B., Ride Services, 2017, pp. 17-18.

20

Cf. Fournier, G., Donada, C., Automotive Mobility, 2016, p. 28; Clewlow, R. R., Mishra, G. S., Disruptive Transportation, 2017, pp. 3-5.

21

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, pp. 253-254.

22

Cf. Kagermann, H., Mobilitätswende, 2017, pp. 358-359.

23

Cf. Tils, G. et al., Car sharing, 2015, pp. 7-9.

24

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, p. 258.

4

Introduction

the growth potential of car sharing services and the future of the concept are assessed. Furthermore, the key implications for businesses are derived and measures for car sharing providers to shape the growth of their services are presented. 1.2

Approach and Research Method

To identify the characteristics of current and potential car sharing users, quantitative data research based on a survey was conducted. The research process for quantitative data research, as detailed by Döring and Bortz (2016), is divided into the following steps:25 1. 2. 3. 4. 5. 6. 7. 8. 9.

Research topic State of literature and research Research design Operationalization Sampling Data collection Data processing Data analysis Presentation of Results

In accordance with this approach, the thesis is structured into five sections that incorporate the individual steps in chronological order. Section 1 detailed the general topic and motivation behind the thesis, including its problem statement, aim, and approach. Section 2 provides a detailed review of current literature and research to understand the state of the automobile industry, the current development of mobility services, and a detailed analysis of the car sharing concept. This is followed by a comprehensive summary of the findings and open issues relevant for the research conducted for this thesis. In section 3, the research design is detailed, including the research objective, the chosen research methods, the sample, the questionnaire for the survey, and a descriptive summary of the survey results. Section 4 provides the evaluation of the research and consists of the application of the chosen research methods, the analysis of the findings, and the connection to the existing literature and research reviewed in section 2. The thesis ends with the conclusion in section 5, including a summary and evaluation of the findings and limitations of the thesis as well as an outlook and implications for car sharing providers and the automobile industry.

25

Cf. Döring, N., Bortz, J., Forschungsmethoden, 2016, pp. 23-25.

2

Literature and Research Review

Section 1 provided an introduction to the research topic, including the problem statement, aim, and approach of the thesis. In this section, a detailed review of the current literature and research is conducted, including the state of the automobile industry, the trend of mobility services, and a detailed analysis of the car sharing concept. This section closes with a summary and derived research hypotheses. On this basis, section 3 presents the research design for this thesis. Regarding the research process for quantitative research (as detailed in the approach of the thesis), the first step is completed. The next step, i.e. explaining the state of literature and research, is now being conducted. 2.1

State of the Automobile Industry: Porter´s Five Forces

To understand the current situation of the automobile industry, the Five Forces model from Michael Porter is applied. The model was designed as an industry analysis tool that analyzes the structure of an industry to determine its attractiveness. 26 Furthermore, it can be used to understand the different forces working in an industry in order to gain a comprehensive understanding of the current situation of the industry and the parties involved.27 The five forces affecting the attractiveness of an industry are the rivalry between existing competitors, the negotiation power of suppliers, the negotiation power of customers, the threat of substitutional products, and the entrance of new competitors. These forces determine the structural competition rules in the industry, and understanding these rules serves as a basis for strategy development in the participating companies.28

26

Cf. Porter, M., Competitive advantage, 1985, pp. 4-5.

27

Cf. Schawel, C., Billing, F., Management Tools, 2018, pp. 141-143.

28

Cf. Porter, M., Competitive advantage, 1985, pp. 4-5.

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2020 J. Kopp, Success Factors for Future Growth of Car Sharing Services, Business, Economics, and Law, https://doi.org/10.1007/978-3-658-29889-0_2

6

Literature and Research Review

Figure 1: Porter’s Five Forces model29

The model is applied to analyze and understand the state of the automobile industry by looking at each of the five forces individually and analyzing the impact they have had on the industry in the past, the impact they currently have, and, if possible, the impact they may have in the future. This will serve as a basis to analyze and understand the industry’s development and the trend of mobility services in section 2.2. 2.1.1 Rivalry between Competitors Competition between automobile manufacturers has historically been fierce. The industry has long been characterized by battles for growth, mergers, and acquisitions.30 The automobile industry has been growing steadily for decades in industrialized and emerging countries, and manufacturers have thus often been able to achieve their growth targets by meeting growing demand or expanding into new markets.31 Growing manufacturers started acquiring smaller competitors or looking for joint ventures to improve their standing in the industry, and over time the industry experienced strong consolidation. From 1970 to 2006, the number of independent manufacturers worldwide decreased from 36 to 13, although the remaining manufactures often operate several brands.32

29

Own design, based on Porter, M., Competitive advantage, 1985, p. 5.

30

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, pp. 274-275.

31

Cf. Ebel, B., Hofer, M., Automotive Management, 2014, pp. 4-6.

32

Cf. Diez, W., Automobil-Marketing, 2006, p. 24.

State of the Automobile Industry: Porter´s Five Forces

7

The growth of the automobile industry has decreased globally over recent years and is stagnating in many markets, especially in industrialized countries. Global car production continuously grew from 2000 to 2016, starting at 58 million vehicles in 2000 and growing to 95 million vehicles in 2016. However, since then car production has declined, with 93 million vehicles in 2017 and 92 million in 2018.33 Global car sales grew until 2016, but have since stagnated.34 Even Asia, which was the main driver of growth for decades, no longer has increasing car sales but instead has maintained the same level over the past four years.35 As a result of this development, manufacturers can no longer achieve their growth targets simply by meeting growing market demand. Instead, they focus more on taking market shares from their competitors, increasing the already fierce competition further. Innovations, customer loyalty, and brand recognition are therefore more important than ever for the OEMs.36 Within the framework of Porter's Five Forces model, the force rivalry between competitors is rated with a high influence on the industry. 2.1.2 Negotiation Power of Suppliers The automobile industry experienced an outsourcing wave around 1980 that prompted most manufacturers to change their strategy from maximum vertical integration to concentration on their core competencies and, as a result, to outsource large parts of the manufacturing process to external suppliers.37 While this makes suppliers a critical part in the automotive value chain today, it has also led to a large total number of suppliers worldwide, many of whom specialize in specific equipment and technologies. Thousands of smaller local suppliers only work with a small number of manufacturers and offer their specialized product range according to their customers’ demands. These suppliers are dependent on their customers, as they cannot afford to lose orders. This often results in limited negotiation power and lower margins. One exception is raw material suppliers; they have stronger negotiation power because there are not as many raw material suppliers as there are for other automotive products.38 To achieve a better standing and become less dependent on single orders, the automotive supplier industry is facing its own wave of consolidation. Small and medium-sized enterprises in this industry are often strong in their specific technological expertise but lack financial resources, so they are therefore welcome candidates for acquisitions by the big players. Industry giants such as Bosch can use this to

33

Cf. OICA, Automobile production, 2019, no page number.

34

Cf. Scotiabank, Cars sold worldwide, 2019, no page number.

35

Cf. Scotiabank, Global car sales, 2019, no page number.

36

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, pp. 274-275.

37

Cf. Stockmar, J., Automobilzulieferer, 2014, p. 216.

38

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, pp. 275-277.

8

Literature and Research Review

achieve a wide product range, satisfying margins and a decent negotiation position, but they remain the exception among suppliers overall.39 New entrants on the supplier side include technology companies such as Google and Apple. In contrast to traditional automotive suppliers, they do not provide mechanical hardware components, but offer technological features for more advanced automobiles, such as multimedia and navigation services. With an increasing importance of innovation, these companies can position themselves as valuable partners for modern mobility solutions, autonomous driving, and more.40 These kinds of suppliers are still relatively new to the industry and assessing their power in the industry is difficult. Within the framework of Porter's Five Forces model, the force negotiation power of suppliers is rated with a low influence on the industry. 2.1.3 Negotiation Power of Customers Private customers typically only buy a single automobile every few years or sometimes decades, resulting in very limited negotiation potential during the purchase. Companies that buy company cars need a larger number of cars and are primarily looking for premium vehicles, which gives them a better negotiation position than individual private buyers.41 This alone, however, would still lead to overall weak negotiation power for customers. Customers as a whole, on the other hand, dictate the demand, which in the case of cars can be very niche.42 One example is sport utility vehicles (SUVs), which became very popular in the 2010s and prompted manufacturers to develop new models and segments to meet the customers’ demands. High competition between the OEMs increases the importance of customer loyalty43, and strong brand awareness can create a positive image of the brand that conveys emotions and makes it appear reliable and desirable to avoid dilution with the competition. The communication of emotions plays an increasingly important role in brand communication and customer loyalty.44 However, as people are rethinking the concept of mobility, it is no longer only about direct car sales, but also new markets and growth opportunities.45 With increasingly flexible living and working environments, mobility has become a megatrend and an expression of modern living. While the range of everyday mobility is increasing overall, a decline in the distance travelled by car can be observed, especially in younger generations. In urban areas, younger people become less interested in purchasing their own cars than in pursuing other purchasing preferences. 39

Cf. Stockmar, J., Automobilzulieferer, 2014, pp. 217-219

40

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, p. 277; Schmalz, W., Verantwortung, 2017, pp. 264-265.

41

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, p. 278.

42

Cf. Ebel, B., Hofer, M., Automotive Management, 2014, pp. 6-7.

43

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, p. 275.

44

Cf. Esch, F.-R., Hanisch, J., Markenmanagement, 2014, p. 291.

45

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, pp. 281-282.

State of the Automobile Industry: Porter´s Five Forces

9

In areas with well-connected transport structures, they are turning to multimodal transport use instead.46 As the idea of owning one’s own car loses popularity and a growing number of alternatives emerges, the position of customers in the industry is increasingly improving. Within the framework of Porter's Five Forces model, the force negotiation power of customers is rated with a high influence on the industry. 2.1.4 Threat of Substitutional Products Historically, the main substitutional product of cars has been public transport. As the preferred means of transportation, the automobile enjoyed steadily growing popularity for decades, especially in industrialized countries, without really being challenged by public transport.47 A survey in Germany in 2017 showed that cars are used for 75 % of all passenger kilometers, and 77 % of all people enjoy using their cars. Public transport, on the other hand, is used for 19 % of all passenger kilometers, and only 34 % of passengers enjoy using trains and busses.48 The trend is changing, however; in 2002 cars were used for 80 % of all passenger kilometers while public transport only accounted for 8 %.49 The emergence of new mobility solutions such as ride hailing and car sharing is shaking up the industry, and an increasing number of people is looking for alternate mobility solutions. 50 Everyday mobility is increasing and, especially in large cities, traffic congestion, poor air quality, and noise disturbance are becoming more and more of a problem. In addition, mobility is seen as a key component in reducing CO2 emissions, and it further increases the importance of sustainable urban mobility management for communities and governments. One way to achieve this is to switch from individual to public transport, for example through integrated multimodal transport use.51 Users of modern mobility solutions such as car sharing are perceived as ambassadors for the use of multimodal transport, and combinations of car sharing and traditional public transport, for example, are seen as real alternatives to owning a car.52 The impact of substitutional products has thus changed over the last decades from low to medium, with potentially high impact in the future. This results in the following rating. Within the framework of Porter's Five Forces model, the force threat of substitutional products is rated with a medium to high influence on the industry.

46

Cf. Tils, G. et al., Car sharing, 2015, pp. 7-9.

47

Cf. Bratzel, S., Das Auto der Zukunft, 2014, pp. 94-95.

48

Cf. infas, DLR, IVT, infas 360, MiD Ergebnisbericht, 2018, pp. 46, 127.

49

Cf. infas, DIW, MiD Ergebnisbericht, 2004, p. 95.

50

Cf. Kottmann, A., Mobile Services, 2015, pp. 533-537.

51

Cf. Tils, G. et al., Car sharing, 2015, pp. 5-8.

52

Cf. Tils, G., Rehaag, R., Nachhaltige Mobilität, 2017, p. 181.

10

Literature and Research Review

2.1.5 Entrance of New Competitors In the past, the threat of new entrants in the industry was rather low. In order to become a viable player in the automobile industry, companies have to invest strongly in product development and production sites, build an efficient value chain with dependable suppliers, create brand value and marketing, and establish a distribution network that can compete with the established OEMs that have been there for decades.53 A particular challenge has always been the complexity of the powertrain of traditional cars. Consisting of a combustion engine with injection, transmission, and exhaust aftertreatment, these powertrains require years of development and experience, making them a total investment that most companies cannot afford.54 However, with the discussion around innovations such as autonomous driving and new propulsion systems such as an electric drive increasing in popularity, new ways to enter the industry are emerging. In 2014, Google created a test vehicle that demonstrated the possibilities of autonomous driving on a car built entirely without a steering wheel or pedals. For the development, Google worked with automotive suppliers Continental and Bosch and left out traditional OEMs completely.55 Prominent manufacturer of electric vehicles Tesla Motors is a relatively new competitor that has managed to bypass the long and expensive development and learning time required to build a conventional car by focusing exclusively on its electric drive. Thanks to the simpler design of the electric powertrain, new competitors can develop their own concepts and bring them into production with more limited resources than traditional combustion engines require. 56 What was originally considered to be a niche concept with a limited customer base has since allowed Tesla to achieve significant growth, and at the end of 2018 it even had higher market capitalization than established industry powerhouses BMW and Daimler for a short period of time.57 Within the framework of Porter's Five Forces model, the force entrance of new competitors is rated with a medium influence on the industry. 2.2

Trend of Mobility Services

Following the analysis of the state of the automobile industry, the current development regarding the trend of mobility services and the potential emergence of a “Mobility Industry” is analyzed. Given the changes in many forces of the industry and the growth of alternate mobility concepts, the automobile industry is in a state of upheaval. The two concepts of car sharing and ride hailing in particular are shaping the perception of mobility in a new way and are becoming increasingly popular. This section analyzes this development and provides more detailed information on car sharing and ride hailing as the most prominent modern mobility concepts.

53

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, pp. 278-279.

54

Cf. Spiegelberg, G., Mobilität 2.0, 2014, p. 73.

55

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, pp. 2, 12.

56

Cf. Spiegelberg, G., Mobilität 2.0, 2014, p. 73.

57

Cf. Finanzen.net, Tesla, 2018, no page number.

Trend of Mobility Services

11

2.2.1 Current Development of the Industry The industry analysis using Porter’s Five Forces in section 2.1 showed that the industry is in a state of upheaval. Increasing environmental awareness, progressive urbanization, megacities that demand optimized transport with resource- and space-saving concepts, as well as demographic and cultural changes are leading to a rethinking of what mobility means and how to manage the challenges of today and tomorrow.58 Younger generations show declining interest in owning their own cars and instead look for more modern mobility solutions.59 In Europe, an increase in the transport of goods by road is resulting in additional strain on the infrastructure, despite the expansion of highways.60 In a recent forecast, the International Transport Forum (2019) stated that “[global passenger transport] will increase three-fold between 2015 and 2050, from 44 trillion to 122 trillion passenger-kilometres”.61 With current and announced mitigation policies, CO2 emissions from transport are still estimated to grow by 60 % during that timeframe.62 New mobility concepts need to be found, and providers of such concepts (for example the ride hailing service Uber) have experienced significant growth over recent years as a result of this development.63 This poses a challenge to the automobile industry, as ride hailing is a form of vehicle-based mobility that focuses on ordering a ride as a means of moving from one point to another, and the specific brand of car used for that ride is irrelevant (see section 2.2.4 Ride Hailing). The OEMs do not participate in the transaction and are therefore reduced to a supplier role for this specific service.64 An increase in the use of new mobility services is leading to reduced car ownership and thus threatening the core business of the OEMs, as studies in North America, Europe, and Canada have shown (a more detailed review of the studies is conducted in section 2.3).65 With regard to the analysis of the automobile industry, the current development implies a declining market position for OEMs. While in the past manufacturers were at the center of the industry and were mostly threatened by rivalry between competitors in an overall growing industry, they are now at risk of being pushed out of the center and into a supplier role for new mobility services.66 In a study from 2016, McKinsey & Company forecasted recurring revenues from shared mobility to be the strongest growth factor for global automotive revenues by 2030, adding another 30 % to the total revenue from traditional one-

58

Cf. Spiegelberg, G., Mobilität 2.0, 2014, p. 76.

59

Cf. Tils, G. et al., Car sharing, 2015, pp. 7-9.

60

Cf. Spiegelberg, G., Mobilität 2.0, 2014, p. 76.

61

International Transport Forum, Transport Outlook, 2019, p. 26.

62

Cf. International Transport Forum, Transport Outlook, 2019, p. 18.

63

Cf. Dias, F. F. et al., Car-sharing and ride-sourcing, 2017, p. 1307.

64

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, p. 272.

65

Cf. Martin, E., Shaheen, S., Car sharing, 2011, pp. 2096-2097.

66

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, p. 272.

12

Literature and Research Review

time vehicle sales and aftermarket.67 For OEMs to participate in this growth, they have to enter the shared mobility market. One way of doing this is to invest in ride hailing providers, as has happened in the past with two of the main players, Uber and Lyft.68 Another way is to create their own new mobility services, an approach that Daimler and BMW have taken with their services car2go and DriveNow. The two services were merged into a joint venture in early 2019 in order to create a relevant tech player that can compete globally in the growing mobility services market.69 A shift in mindset can be observed across OEMs, as several of them showed increased focus on the provision of mobility services as a key part of their strategies in their recent annual reports.70 2.2.2 The “Mobility Industry” In literature and research, the term “Mobility Industry” appears only sporadically. Of all the documents reviewed, only seven mention a mobility industry, and a unified definition could not be found.71 In these documents, the term is used in the context of new mobility services and shared mobility, implying a corresponding industry for these services. Wedeniwski (2015) provides the most detailed description of this concept, so his work is the subject of this chapter. He proposed the emergence of a mobility industry as a result of the ongoing development in the automobile industry and the trend of mobility services.72 The subject of this industry is services and products designed to satisfy mobility needs to move from one point to another. This includes both the transit itself and services such as information on the location of the nearest vehicle, public transport timetables, and booking systems.73 The need for a mobility industry is resulting from the changed perception of both the automobile and mobility in general. While the automobile has been the preferred means of transportation for decades due to its flexibility, new mobility concepts are emerging that can satisfy mobility needs without placing the automobile at the center.74 As a result, the mobility industry has a new distribution of power and structures which are different from those of the automobile industry, as described in section 2.1. Four key parties form the mobility industry: automobile manufacturers, technology and electronics companies, mobility service providers, and public transport. 67

Cf. Kaas, H.-W. et al., Automotive revolution, 2016, p. 6.

68

Cf. Dias, F. F. et al., Car-sharing and ride-sourcing, 2017, p. 1310.

69

Cf. Pander, J., Spiegel, 2019, no page number.

70

Cf. BMW AG, Annual report, 2019, pp. 29-30; Daimler AG, Annual report, 2019, p. 107; Ford Motor Company Corporation, Annual report, 2019, p. 15; Toyota Motor Corporation, Annual report, 2019, pp. 7-9; Volkswagen AG, Annual report, 2019, p. 52.

71

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, p. 12; Fournier, G., Donada, C., Automotive Mobility, 2016, p. 28; Kaas, H.-W. et al., Automotive revolution, 2016, p. 7; Martin, E., Shaheen, S., car2go, 2016, p. 22; Murphy, C., Shared mobility, 2016, p. 4; Goll, F., Knüttgen, I., Digitale Revolution, 2017, p. 391; Shaheen, S. et al., Peer-To-Peer Car sharing, 2018, p. 7.

72

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, p. 254.

73

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, p. 13.

74

Cf. Sommer, C., Mucha, E., Mobilitätsdienstleistungen, 2014, pp. 500-501.

Trend of Mobility Services

13

Figure 2: Key parties in the mobility industry75

Manufacturers have experience in product development and enjoy strong expertise in the important areas of research & development, sourcing & logistics, and production. Even though alternatives to car-based transportation are increasing in popularity, cars remain the most commonly used means of transport.76 As such, traditional automobile production is still a key component in the mobility industry. Technology and electronics companies provide the technological basis for mobility services by offering flexible mobile interaction. The platforms that companies such as Google and Apple provide enable mobility service providers to create mobile services that include information about the best route and means of transport to a destination as well as ordering and billing through a single website or smartphone. Adding to the importance of infotainment systems in cars that are also provided by technology and electronics companies, these players also hold an important position in the mobility industry.77 Mobility service providers are the newest of the four parties in the mobility industry, and they strongly shape it through innovation and disruption.78 They include car sharing and ride hailing, among other concepts. Their aim is to offer new mobility concepts, usually through internet-based platforms, that meet the growing demand for flexible and sustainable mobility in line with modern living.79 While many of these players are still quite new and need to mature, there are also examples of

75

Own design, based on Wedeniwski, S., Mobilitätsrevolution, 2015, p. 255.

76

Cf. Schönharting, J., Mobility Strategies, 2014, pp. 405-406.

77

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, pp. 257-258.

78

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, p. 258.

79

Cf. Tils, G. et al., Car sharing, 2015, pp. 7-9.

14

Literature and Research Review

how successful companies in this business can be. The aforementioned ride hailing service provider Uber went public in 2019 and reached a market capitalization of over 70 billion USD on its first day at the stock market, approaching the value of the two established automobile manufacturers General Motors and Ford combined.80 Public transport, as the final party of the mobility industry, is the most established alternative to cars.81 As a sustainable option to transport large numbers of people safely in metropolitan areas and with an existing infrastructure, it is an important pillar of the mobility industry.82 The disadvantages of public transport include reduced flexibility, and although there is an established infrastructure to build on, the expansion of this infrastructure is a costly affair.83 Targeted use of public transport in the context of the mobility industry can be achieved through multimodal transport use, e.g. using mobility services like car sharing to reach the nearest train stop. Public transport can be used to cover the longest distance, after which car sharing can be utilized, if needed, to arrive at the destination.84 When comparing the mobility industry and the automobile industry as analyzed in section 2.1, it is notable that the OEMs are in different positions. In the automobile industry they have enjoyed a strong market position and high negotiation power for decades, being mostly threatened by competition among each other and changing customer demands. Recent development in the industry poses new challenges, as the threat of new competitors and substitutional products is increasing and weakening the position of OEMs.85 When looking at the mobility industry, this development becomes even clearer: the center here is not taken by OEMs and their car sales, but by the general demand for mobility. This demand can be met the traditional way by buying one’s own car, but the other players described in this section are another option. As more people turn to mobility services, the OEMs are at risk of falling back into a supplier role to mobility service providers with a much weaker position in the mobility industry than in the automobile industry.86 2.2.3 Car Sharing This section gives an overview of car sharing as a mobility service in the context of the general trend towards new mobility services. The aim here is not to carry out a detailed analysis of the particularities of car sharing, current data, and studies (as is done in section 2.3), but rather to show the concept’s relation to the mobility industry and ride hailing as an alternate mobility service.

80

Cf. Reddy, A., BusinessInsider, 2019, no page number.

81

Cf. Schönharting, J., Mobility Strategies, 2014, pp. 405-406.

82

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, pp. 256-257.

83

Cf. Wendt, H., Netzzugang, 2012, pp. 230-231.

84

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, pp. 256-257.

85

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, pp. 274-279.

86

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, p. 272.

Trend of Mobility Services

15

Car sharing was defined by Pieper et al. (2013) as the organized, joint use of vehicles by a larger number of people.87 Kortum et al. (2016) added that, unlike traditional forms of daily or weekly rental, the vehicles are charged by the hour or minute.88 The first car sharing services emerged in the 1980s, and the motivation was a mixture of pragmatic reasons such as cost reductions and idealistic reasons such as sustainable travel behavior.89 Today there are three main types of car sharing: station-based, free-floating, and peer-to-peer car sharing.90 Originally, the concept of station-based car sharing was the most popular version. It revolves around fixed stations where car sharing vehicles are picked up and returned after usage.91 The emergence of the freefloating car sharing concept has further diversified the offer of individualized mobility for a larger number of users. The free-floating concept allows users to pick up and return the shared vehicles on any public parking space within the defined area of use. This model has led to an increased visibility of the services and contributed to car sharing gaining more presence and acceptance.92 Free-floating car sharing systems are present in more than 35 cities and more than 10 countries worldwide.93 Two popular providers of free-floating car sharing are Daimler’s car2go and BMW’s DriveNow, which were merged in early 2019 into the joint venture Share Now.94 Peer-to-peer car sharing is the shared use of private vehicles organized through internet platforms and also includes carpooling, where users that are traveling with their cars anyway offer to take other users along.95 While free-floating car sharing has become the most popular form of car sharing and increased the acceptance of the concept, there is also criticism of achieving less positive effects than station-based car sharing, as fewer users replace their own vehicles with this form of mobility and use it additionally instead.96 A study on Germany, for example, showed that only 33 % of freefloating car sharing users believed that car sharing can replace their private vehicles, compared to 63 % of station-based car sharing users.97 Overall, however, car sharing is making a positive

87

Cf. Pieper, N. et al., Intermodalität, 2013, p. 381.

88

Cf. Kortum, K. et al., Free-Floating Car sharing, 2016, p. 329.

89

Cf. Shaheen, S. et al., Car-sharing, 2009, p. 35.

90

Cf. Jonuschat, H. et al., Mobility, 2015, pp. 152-153; Schmöller, S. et al., Free-floating car sharing, 2015, p. 35.

91

Cf. Tils, G. et al., Car sharing, 2015, p. 5.

92

Cf. Kortum, K. et al., Free-Floating Car sharing, 2016, p. 329.

93

Cf. Wittwer, R., Hubrich, S., Free-Floating Car sharing, 2018, p. 324.

94

Cf. Pander, J., Spiegel, 2019, no page number.

95

Cf. Tils, G. et al., Car sharing, 2015, p. 6.

96

Cf. Tils, G. et al., Car sharing, 2015, pp. 6-7.

97

Cf. Nehrke, G., Loose, W., Car sharing, 2018, pp. 33-34.

16

Literature and Research Review

contribution to more sustainable and environmentally friendly transport.98 This is firstly because it reduces the number of vehicles on the street while the shared vehicles are used more intensively, and secondly because it plays a role in the use of multimodal transport and promotes combined use with environmentally friendly options such as public transport, cycling, and walking.99 Car sharing is a way for traditional automobile manufacturers to enter the market for modern mobility solutions while also realizing synergies in combination with their core automobile production businesses. Wedeniwski (2015) used car2go as an example to show that, although this is a new business model for Daimler, a link to its core business is established, as only its own vehicles are used for the service. This gives OEM-operated car sharing services such as car2go a competitive advantage, as other providers have to invest heavily in building their vehicle fleets.100 2.2.4 Ride Hailing The terminology for ride hailing services is controversially discussed in literature and research.101 Ride hailing was defined by Dias et al. (2017) as a mode of transportation similar to a taxi, but at lower cost, that offers door-to-door transportation on-demand that is requested, tracked, and paid for via a smartphone app.102 Henao et al. (2018) noted that there is no clearly defined term for these services, as ride booking, ride matching, on-demand rides, app-based rides, and Transportation Network Companies (TNCs) are also used besides ride hailing to describe these services. A term that is incorrect and sometimes misused is ride sharing, as ride sharing trips require at least two or more passengers, while ride hailing trips often only have one passenger. To be consistent with recent academic and media publications, Henao et al. (2018) used the term ride hailing, which is therefore also used in this thesis.103 The unclear terminology is still an issue, however, as Dias et al. (2017) (among others) used the term ride sourcing in their definition as an analogue to ride hailing.104 Their definition is still used, as it is the most applicable definition found. Ride hailing is a growing form of shared mobility and is said to attract a larger, broader customer base than car sharing.105 The provider Uber needed six years of growth to achieve its

98

Cf. Ferrero, F. et al., Car-sharing services, 2018, p. 501.

99

Cf. Tils, G. et al., Car sharing, 2015, pp. 6-7; Wittwer, R., Hubrich, S., Free-Floating Car sharing, 2018, p. 324.

100

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, p. 283.

101

Cf. Henao, A., Marshall, W. E., Ride-hailing, 2018, p. 3.

102

Cf. Dias, F. F. et al., Car-sharing and ride-sourcing, 2017, p. 1308.

103

Cf. Henao, A., Marshall, W. E., Ride-hailing, 2018, p. 3.

104

Cf. Dias, F. F. et al., Car-sharing and ride-sourcing, 2017, p. 1308.

105

Cf. Clewlow, R. R., Mishra, G. S., Disruptive Transportation, 2017, p. 5.

Car Sharing In-Depth

17

one-billionth ride, but only six months later already served its two-billionth ride in July 2016.106 Two years later, in July 2018, the milestone of ten billion rides was achieved.107 Ride hailing providers have mainly focused on large metropolitan areas for their expansion,108 and studies by Agatz et al. (2012) and Alonso-Mora et al. (2017) showed that ride hailing services are more successful in high population density areas where waiting times for users and drivers can be more easily reduced.109 Clewlow and Mishra (2017) noted that, despite being the younger concept, “ride-hailing has already far out-paced the growth of traditional car sharing services of the past”.110 Regarding the impact of ride hailing on the use of other means of transportation, studies by Murphy (2016) and Smith (2016) found that people who use sharing services more often (also including car sharing and bike-sharing) own fewer cars and are more likely to use public transport and other alternatives.111 However, the impact on the number of vehicle kilometers driven remains unclear, as Rayle et al. (2016) noted that one vehicle trip is often simply replaced by another by ordering a trip instead of driving oneself. They found that more than half the trips do not replace the use of taxis, but rather other means of transport, including public transport.112 To assess the impact of ride hailing on vehicle sales in developing and developed countries, Guo et al. (2019) conducted a study in the United States and China. They found that the entry of the Chinese ride hailing provider Didi Chuxing increased car sales in China by 9.24 %, while the entry of Uber in the United States decreased car sales by 8.1 %, thus suggesting that car sales in developing countries benefit from ride hailing while car sales in developed countries decline due to the entry of the service.113 The ride hailing market has a total revenue of 156 billion USD and 824 million users worldwide in 2019 and is forecasted to grow at an annual growth rate of 10.2 % in the next four years to reach a total revenue of 230 billion USD and 1,109 users by 2023.114 2.3

Car Sharing In-Depth

Having analyzed the trend of mobility services in the automobile industry (including an overview of the two concepts ride hailing and car sharing), this thesis will now analyze car sharing in depth. The rethinking of mobility, especially among younger generations, has created de-

106

Cf. Dias, F. F. et al., Car-sharing and ride-sourcing, 2017, p. 1308.

107

Cf. Uber, Rides, 2018, no page number.

108

Cf. Clewlow, R. R., Mishra, G. S., Disruptive Transportation, 2017, p. 7.

109

Cf. Agatz, N. et al., Optimization, 2012, pp. 297-302; Alonso-Mora, J. et al., Ride-sharing, 2017, pp. 464-467.

110

Clewlow, R. R., Mishra, G. S., Disruptive Transportation, 2017, p. 7.

111

Cf. Murphy, C., Shared mobility, 2016, pp. 5-9; Smith, A., Digital Economy, 2016, pp. 20-21.

112

Cf. Rayle, L. et al., Ridesourcing services, 2016, pp. 172-177.

113

Cf. Guo, Y. et al., Sharing economy, 2019, pp. 12-19.

114

Cf. Statista, Ride Hailing, 2019, no page number.

18

Literature and Research Review

mand for new mobility solutions and potentially a new industry, the mobility industry. Increasing attention on modern transport challenges such as traffic congestion in cities and pollution have allowed concepts such as car sharing to emerge as a potential solution. This section provides a detailed analysis of the current state of research on car sharing, including users, potentials, and its specific state in Germany. The thesis describes findings of different studies in detail in the respective sections before it presents a summary of the socio-demographic profile of car sharing members and key potentials of car sharing as part of the summary in section 2.4. 2.3.1 State of the Concept and User Profile While the first car sharing services were offered as early as the 1980s, Shaheen et al. (2009) defined the emergence of car sharing in three phases, starting with initial market entry and experimentation from 1994-2002 followed by growth and market diversification from 20022007 and commercial mainstreaming from late 2007 to the present.115 Münzel et al. (2017) labelled the car sharing market as an emerging industry116 and referred to Teece (2010), who argued that in these early stages of an industry the details about customer profiles, preferences, costs, business models, and competitors still need to be investigated.117 There are different business models in car sharing today, ranging from local providers with only a few cars to major free-floating providers in large cities and country-wide peer-to-peer car sharing networks. However, when analyzing their fleet sizes per capita in their city of operation, Münzel et al. (2017) found no significant difference in their example of Germany and thus suggested that each business model is viable for its respective urban environment, so they will continue to exist side by side for some time to come.118 The socio-demographic profile of car sharing members has been described in several studies, in some cases with different results. Cervero et al. (2007) reported that car sharing serves a unique and distinct market of non-traditional households with a moderate income and no cars.119 Martin and Shaheen (2011) found that car sharing members tend to be young, although a third of the users of their sample was over 40 years old, well-educated, and had moderate incomes.120 Clewlow (2016) studied North American car sharing users in the San Francisco Bay Area and confirmed that car sharing members are well-educated. He also compared them with non-car sharers, finding that 83.5 % of car sharing users had at least bachelor’s degrees, compared to

115

Cf. Shaheen, S. et al., Car-sharing, 2009, p. 39, cited in: Dias, F. F. et al., Car-sharing and ride-sourcing, 2017, p. 1310.

116

Cf. Münzel, K. et al., Car sharing, 2017, p. 275.

117

Cf. Teece, D. J., Business models, 2010, pp. 184-190, cited in: Münzel, K. et al., Car sharing, 2017, p. 275.

118

Cf. Münzel, K. et al., Car sharing, 2017, pp. 286-287.

119

Cf. Cervero, R. et al., City CarShare, 2007, p. 8.

120

Cf. Martin, E., Shaheen, S., Greenhouse gas emission, 2011, p. 1077.

Car Sharing In-Depth

19

69.5 % of non-car sharers, and that car sharing users also tend to have a higher income.121 Kopp et al. (2015) studied users of the free-floating car sharing service DriveNow and defined their socio-demographics as ages 25 to 45, male, living in urban areas with dense populations, earning a higher income, and tending to be better educated. They are not frequent drivers and mostly use car sharing in their free time, for shopping, and for general transportation of people and goods.122 The studied sample contained users of the free-floating car sharing service DriveNow as well as a control group of non-car sharers recruited by a research institute to match the sample of car sharing users, with all participants living in the two chosen German cities Munich and Berlin. When comparing the level of education of both parties, they found that more than 70 % of the free-floating car sharing service users had university degrees versus 41 % in the non-car sharer category.123 This result backed previous findings by Kopp et al. (2013) and Millard-Ball et al. (2005) that showed a tendency of free-floating car sharing users to be more educated than non-car sharers.124 Dias et al. (2017) identified a matching social profile of car sharing users: “young, well-educated, higher-income, employed, and residing in higher density neighborhoods”.125 However, they found that people in medium or low income households are less likely to use car sharing when they have children.126 Kopp et al. (2015) showed a partly similar result, stating that free-floating car sharing users overall tend to have no children.127 This is contradicted by findings from Le Vine and Polak (2019) and Liao et al. (2018), who identified car sharing users as more likely to live in households with children.128 Becker et al. (2017) also found the average household size to be higher among free-floating car sharing members compared to non-car sharers, but their result seemed to be insignificant.129 Other than that, however, they confirmed the demographics of younger, employed users with higher education and an above average income.130 Clewlow (2016) added that car sharing members with their own cars are more likely to have an alternatively fueled vehicle, which is why she suggests that car sharing members might be more environmentally conscious overall.131

121

Cf. Clewlow, R. R., Sustainable travel behavior, 2016, p. 161.

122

Cf. Kopp, J. et al., Free-floating car-sharing, 2015, p. 450.

123

Cf. Kopp, J. et al., Free-floating car-sharing, 2015, pp. 453-458.

124

Cf. Millard-Ball, A. et al., Car-Sharing, 2005, pp. 60-64; Kopp, J. et al., Car-sharing systems, 2013, pp. 225226.

125

Dias, F. F. et al., Car-sharing and ride-sourcing, 2017, p. 1320.

126

Cf. Dias, F. F. et al., Car-sharing and ride-sourcing, 2017, p. 1320.

127

Cf. Kopp, J. et al., Free-floating car-sharing, 2015, p. 450.

128

Cf. Liao, F. et al., Car sharing, 2018, p. 22; Le Vine, S., Polak, J., Free-floating car sharing, 2019, p. 124.

129

Cf. Becker, H. et al., Car-sharing schemes, 2017, pp. 25-26.

130

Cf. Becker, H. et al., Car-sharing schemes, 2017, p. 25; Liao, F. et al., Car sharing, 2018, p. 22; Le Vine, S., Polak, J., Free-floating car sharing, 2019, p. 124.

131

Cf. Clewlow, R. R., Sustainable travel behavior, 2016, p. 163.

20

Literature and Research Review

As a result of this socio-demographic profile, most car sharing systems are focused on urban areas with dense populations. Therefore rural areas are often neglected, as expansion into these areas is challenging and costly compared to the more profitable urban areas that have a higher demand.132 This demand is associated with considerable fluctuation depending on the day, time of day, and area of a city. These are crucial aspects, especially for free-floating car sharing services. Herrmann et al. (2014) studied the impact of this challenge to develop smart relocation strategies for free-floating car sharing providers and found that improved relocation strategies are needed to avoid losing customers in both the short and long term.133 In another study on optimized relocation strategies, Jian et al. (2018) also found that user demand is influenced by the availability of car sharing vehicles, which should thus be considered part of an improved relocation system when providers and communes build and expand their car sharing networks.134 2.3.2 Impact of Car Sharing As a result of their study of North American car sharing members, Martin et al. (2010) estimated that for every deployed car sharing vehicle, 9 to 13 vehicles are removed from the street, either by owned vehicles being sold or by considered purchases being avoided. The measured reduction of vehicles was statistically significant, despite the fact that 60 % of the interviewed car sharing members were without a car from the outset.135 This direction is consistent with studies by Millard-Ball et al. (2005) and Price et al. (2006), who found that 20 %-29 % of car sharing users ended up selling their vehicles, and 41 %-71 % postponed or forewent the purchase of a new vehicle.136 In a more recent study in the Netherlands, Liao et al. (2018) confirmed the trend but set a slightly lower limit of car sharing’s potential to remove vehicles from the road, with 40 % of the respondents showing willingness to replace some of their private car trips with car sharing and 20 % being likely to shed their current cars or forego the purchase of new ones. They also added that these figures are likely an upper limit for the potential of car sharing in this regard, as their chosen model of stated preference data tends to overrate the preference for new products.137 The lower level of car ownership contributes to lower parking needs, less traffic congestion, fewer car accidents, and less pollution, so Baptista et al. (2014) pointed to a positive impact of car sharing on environmental sustainability.138 Car sharing enriches the mix of different

132

Cf. Illgen, S., Höck, M., Car sharing services, 2018, pp. 13-14.

133

Cf. Herrmann, S. et al., Free-Floating Car-sharing, 2014, p. 161.

134

Cf. Jian, S. et al., Station-Based Car sharing, 2018, pp. 20-21.

135

Cf. Martin, E. et al., Car sharing, 2010, p. 157.

136

Cf. Millard-Ball, A. et al., Car-Sharing, 2005, p. 89; Price, J. et al., Carshare Program, 2006, p. 11.

137

Cf. Liao, F. et al., Car sharing, 2018, p. 30.

138

Cf. Baptista, P. et al., Energy, 2014, pp. 30, 36.

Car Sharing In-Depth

21

transport options, and its users are perceived as ambassadors of multimodal transport use.139 Murphy (2016) noted that the more people use shared mobility such as car sharing, ride hailing, and bike-sharing, the more likely they are to use public transport, own fewer vehicles, and have lower transportation costs.140 Mobility is one of the three consumption categories contributing the most to worldwide greenhouse gas emissions, together with food and shelter. Hertwich and Peters (2009) noted that, in the case of mobility, even advanced technologies in the long run could not be enough to bring greenhouse gas emissions to a sustainable level, making either a decrease in demand or modal shifts unavoidable.141 Martin and Shaheen (2011) studied the impact of car sharing on household greenhouse gas emissions and vehicle kilometers travelled in North America via an online survey of members of major car sharing providers. Their results showed a statistically significant decrease in greenhouse gas emissions of -0.84 tons per household annually and a decrease of 27 % on average of vehicle kilometers travelled. When one adds kilometers that would have been driven if the purchase of a new car had not been avoided due to the use of car sharing, the average decrease in vehicle kilometers travelled rises to 43 %.142 Clewlow and Mishra (2017), however, questioned the circumstances of these results, noting that the “relationship between the built environment, car sharing adoption, and travel behavior” is often not addressed.143 They explained that car sharing services are generally placed in high-density areas with easy access to public transport where vehicle ownership and vehicle kilometers travelled are lower than average. Thus, they questioned whether the observed reduction of vehicle ownership and vehicle kilometers travelled can be fully explained by the use of car sharing and whether residential changes immediately prior to becoming a member of a car sharing service factored into the results.144 To better understand this relationship, Clewlow (2016) conducted a study in the San Francisco Bay Area and found that in dense, urban neighborhoods, car sharing members owned significantly fewer vehicles than non-car sharers, while vehicle ownership between the two groups was even in suburban areas. She therefore concluded that the relationship between the environment and travel behavior is an important factor to consider when researching the impact of car sharing on vehicle ownership and vehicle kilometers travelled.145 The overall impact of car sharing on vehicle kilometers travelled is positive, however. The latest estimates from the International Transport Forum (2019) concluded that vehicle

139

Cf. Chatterjee, K. et al., Joining a carshare, 2013, pp. 82-83; Tils, G., Rehaag, R., Nachhaltige Mobilität, 2017, p. 181.

140

Cf. Murphy, C., Shared mobility, 2016, pp. 5-9.

141

Cf. Hertwich, E. G., Peters, G.P., Carbon footprint, 2009, pp. 6417-6418.

142

Cf. Martin, E., Shaheen, S., Greenhouse gas emission, 2011, pp. 1079-1080.

143

Clewlow, R. R., Mishra, G. S., Disruptive Transportation, 2017, p. 7.

144

Cf. Clewlow, R. R., Mishra, G. S., Disruptive Transportation, 2017, pp. 7-8.

145

Cf. Clewlow, R. R., Sustainable travel behavior, 2016, p. 163.

22

Literature and Research Review

kilometers travelled in cities could be halved by 2050 if shared mobility massively increases. Furthermore, CO2 emissions from urban transport could be reduced by 30 %.146 Due to the role that mobility plays in greenhouse gas emissions, sustainable mobility solutions have gained more and more attention. Since car sharing is seen as one such solution, providers are using this image to market themselves as green brands and increase their attractiveness.147 Belk (2014) noted that providers who are more in the car rental business market their services as car sharing in order to use the green image of the sharing economy, a detailed example of which is the provider Zipcar.148 Hartl et al. (2018) studied this to find that car sharing “is perceived more environmentally friendly than owning a car”, and while cost savings are a main driver in the question of using car sharing, sustainability plays a role when deciding between the different options.149 One concern specific to free-floating car sharing services was showcased by Firnkorn (2012), who studied car2go users in Ulm and found that users who previously did not own cars used public transport, walking, and cycling less after joining the car sharing service.150 A similar result was also found by Sioui et al. (2013) in their study in Montréal, Canada.151 2.3.3 State in Germany User numbers for car sharing in Germany are showing ongoing growth, with station-based car sharing growing by 21.5 % and free-floating car sharing by 14.9 % from 2018 to 2019.152 With this development, the trend of recent years has continued, and the current number of registered car sharing users in Germany is up to around 2.5 million users:

146

Cf. International Transport Forum, Transport Outlook, 2019, p. 97.

147

Cf. Hartl, B. et al., Sustainability, 2018, p. 88.

148

Cf. Belk, R., Sharing, 2014, p. 12.

149

Hartl, B. et al., Sustainability, 2018, p. 95.

150

Cf. Firnkorn, J., Free-floating car-sharing, 2012, pp. 1667-1671.

151

Cf. Sioui, L. et al., Car-sharing, 2013, pp. 67-69.

152

Cf. Bundesverband Car sharing, Car sharing, 2019, no page number.

Car Sharing In-Depth

23

Figure 3: Number of registered car sharing users in Germany, from 2008 to 2019153

The number of free-floating car sharing users is almost three times as high as that of stationbased car sharing users, comparing 1.8 million users to 650 thousand.154 Across the German population, 3 % of all people are car sharing users. The ratio is higher in metropolitan areas, where 12 % of all people use car sharing. However, this takes into account all registered users; only about one third uses car sharing at least once a month.155 Younger people in Germany are increasingly using multimodal transport and combining cars, public transport, and bicycles more frequently than any other age group. The older people in Germany are, the more they travel by car compared to other means of transport, with 60- to 69-year-olds having the highest rate of travel by car with 74 %.156 Bratzel (2014) presented four main reasons for the changing mobility behavior of younger people in Germany: rising costs in the purchase and maintenance of cars, increasing congestion and parking issues, more attractive alternatives such as car sharing and public transport, and increasing status of smartphones and technology resulting in decreasing status of private cars.157 As a result, more than 80 % of all car sharing

153

Own design, based on Horizont, Bundesverband Car sharing, Car sharing-Nutzer, 2019, no page number.

154

Cf. Bundesverband Car sharing, Car sharing, 2019, no page number.

155

Cf. infas, DLR, IVT, infas 360, MiD Ergebnisbericht, 2018, p. 83.

156

Cf. infas, DLR, IVT, infas 360, MiD Ergebnisbericht, 2018, p. 58.

157

Cf. Bratzel, S., Das Auto der Zukunft, 2014, pp. 101-104.

24

Literature and Research Review

users in Germany are under 50 years old.158 The average car sharing user in Germany is young, lives in a metropolitan area, has a moderate to high household income, and is less likely to own a vehicle.159 In Germany, there are 5 providers of free-floating car sharing spanning 18 cities, and there are 176 providers of station-based car sharing spanning 740 cities.160 By far the largest provider is Share Now, the joint venture of Daimler’s car2go service and BMW’s DriveNow, with a combined 1.7 million users in their free-floating business. Number two is the station-based service Flinkster from Deutsche Bahn with 315 thousand users.161 As detailed in section 2.3.2, studies show that every car sharing vehicle deployed replaces a number of private cars, with results varying from 9 to 13 per vehicle, meaning 20 % to 29 % of all users sell their cars. For Germany this number is even higher, as Loose (2016) found that every car sharing vehicle replaces 15 private vehicles on average and up to 20 in a city center. He also found that 62 % of all participants sold their cars prior to or upon car sharing use.162 Schreier et al. (2015) also found a positive impact on the reduction of vehicles in Germany, only with more modest figures. In the city of Munich, 11.6 % of the respondents sold vehicles due to their use of car sharing, and another 39.8 % refrained from buying cars. Furthermore, their study showed that vehicle ownership among non-car sharers and users of free-floating car sharing services was equal, but users of station-based car sharing services had only half as many vehicles in their households, if not less.163 Nehrke and Loose (2018) also concluded in their study that there are several differences between free-floating and station-based car sharing and their respective user groups. They found that over 80 % of station-based car sharing users living in inner-city residential areas live in households without vehicles, while free-floating car sharing users in the same areas are only 32 % vehicle-free, as this form is used as an addition to rather than a replacement for their own vehicles.164 This could correspond to another finding: 77 % of the free-floating car sharing users agreed that driving is fun, and only 33 % thought that car sharing could replace their private vehicles. 39 % of station-based car sharing users thought that driving is fun, but 63 % of them agreed that car sharing could replace private cars.165 They thus concluded that the combination of both systems might be the best way to

158

Cf. infas, DLR, IVT, infas 360, MiD Ergebnisbericht, 2018, p. 83.

159

Cf. infas, DLR, IVT, infas 360, MiD Ergebnisbericht, 2018, pp. 36, 83.

160

Cf. Bundesverband Car sharing, Car sharing, 2019, no page number.

161

Cf. Statista, Car sharing-Anbieter, 2019, no page number.

162

Cf. Loose, W., Car sharing, 2016, pp. 12, 27.

163

Cf. Schreier, H. et al., Car sharing, 2015, pp. 14-15.

164

Cf. Nehrke, G., Loose, W., Car sharing, 2018, p. 23.

165

Cf. Nehrke, G., Loose, W., Car sharing, 2018, pp. 33-34.

Conclusion of Literature and Research Review

25

acquire new customers, keep them satisfied with the availability and flexibility of the fleets, and achieve sustainability targets.166 2.4

Conclusion of Literature and Research Review

With the detailed analysis of studies and market research for car sharing having been described, the following section makes conclusions about the literature and research review and provides a summary. The three parts of the literature and research review gave insights into the current state of the automobile industry, the ongoing development and trend of mobility services, and detailed data and findings regarding the car sharing concept. Compiling a comprehensive summary that combines the different findings provides the theoretical basis for the hypotheses that are researched and evaluated in sections 3 and 4. 2.4.1 Summary The literature and research review showed that the automobile industry is in a state of upheaval. Global car sales are stagnating, the demand and focus of customers are changing, and the core business of private car sales is confronted with growing substitutional products in the form of modern mobility services.167 People are rethinking what mobility means as a result of increased environmental awareness, ongoing urbanization, and traffic congestion in cities. The global demand for transportation is forecasted to triple by 2050, and with current policies the corresponding CO2 emissions will increase by another 60 %.168 This rethinking of mobility and the emergence of alternate mobility concepts has prompted the idea of a mobility industry. This new industry would have a new distribution of power and could put traditional automobile manufacturers in a weaker position, as modern mobility solutions such as car sharing, ride hailing, or multimodal transport use are at the center instead.169 Car sharing, defined as the organized, joint use of vehicles by a larger number of people, has grown over recent years, and the most popular form, free-floating car sharing, is currently present in more than 35 cities in over 10 countries worldwide.170 This form is also a way for traditional automobile manufacturers to position themselves more favorably in the mobility industry, as it allows them to meet the demand for modern mobility solutions while building the bridge to their core business of automobile production by constructing the cars for their own car sharing fleets.171 Ride hailing (defined as a mode of transportation similar to a taxi, but at lower cost, that offers door-to-door transportation on-demand and is requested, tracked, and paid for via a smartphone app) is another

166

Cf. Nehrke, G., Loose, W., Car sharing, 2018, p. 70.

167

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, pp. 274-279.

168

Cf. International Transport Forum, Transport Outlook, 2019, p. 18.

169

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, pp. 258, 272.

170

Cf. Pieper, N. et al., Intermodalität, 2013, p. 381; Wittwer, R., Hubrich, S., Free-Floating Car sharing, 2018, p. 324.

171

Cf. Wedeniwski, S., Mobilitätsrevolution, 2015, p. 283.

26

Literature and Research Review

growing form of shared mobility.172 It further amplifies the idea of mobility as a service and, in contrast to car sharing, the user does not drive himself but instead orders a trip with a driver. Ride hailing users are more likely to use public transport and other alternatives to cars, but ride hailing itself does not lower vehicle kilometers driven, as usually one trip is just replaced by another. Therefore, the potential to provide positive effects on traffic congestion and pollution is questionable.173 Detailed analysis on the state of the literature and research on car sharing provides insights into the socio-demographic profile of car sharing users, existing business models, and potentials regarding sustainable mobility with less traffic congestion and pollution. There are different business models for car sharing with different fleet sizes, ranging from local providers with only a small fleet to globally operative companies with thousands of vehicles. However, the fleet size per capita in the cities where these providers operate is rather even, and the different models are likely to co-exist for some time.174 The evaluation of the different studies regarding socio-demographics leads to a joint user profile. Car sharing users tend to be young, well-educated, employed with a moderate to high income, and living in urban areas with a high population density.175 Different results are reported regarding children, where some studies show that car sharing users are likely to have children while others report the opposite.176 One study also found that the private cars of car sharing users are more likely to be alternatively fueled, suggesting that car sharing users are more environmentally conscious.177 Car sharing has the potential to reduce vehicle ownership and vehicle kilometers driven while promoting multimodal transport use, thereby having a positive effect on greenhouse gas emissions, traffic congestion, and parking spaces. Every car sharing vehicle removes between 9 and 20 private vehicles from the road, and 20 % to 29 % of users sell their vehicles after becoming car sharing users. Another 41 % to 71 % postpone or forego the purchase of new cars.178 Vehicle kilometers travelled are reduced by 27 % to 43 %, and greenhouse gas emissions decrease by -0.84 tons per household annually.179 The latest estimates by the International Transport Forum concluded that further

172

Cf. Dias, F. F. et al., Car-sharing and ride-sourcing, 2017, p. 1308.

173

Cf. Rayle, L. et al., Ridesourcing services, 2016, pp. 172-177.

174

Cf. Münzel, K. et al., Car sharing, 2017, pp. 286-287.

175

Cf. Martin, E., Shaheen, S., Greenhouse gas emission, 2011, p. 1077; Kopp, J. et al., Free-floating car-sharing, 2015, p. 450; Dias, F. F. et al., Car-sharing and ride-sourcing, 2017, p. 1320; Liao, F. et al., Car sharing, 2018, p. 22; Le Vine, S., Polak, J., Free-floating car sharing, 2019, p. 124.

176

Cf. Kopp, J. et al., Free-floating car-sharing, 2015, p. 450; Dias, F. F. et al., Car-sharing and ride-sourcing, 2017, p. 1320; Liao, F. et al., Car sharing, 2018, p. 22; Le Vine, S., Polak, J., Free-floating car sharing, 2019, p. 124.

177

Cf. Clewlow, R. R., Sustainable travel behavior, 2016, p. 163.

178

Cf. Millard-Ball, A. et al., Car-Sharing, 2005, p. 89; Price, J. et al., Carshare Program, 2006, p. 11; Martin, E. et al., Car sharing, 2010, p. 157; Loose, W., Car sharing, 2016, pp. 12, 25.

179

Cf. Martin, E., Shaheen, S., Greenhouse gas emission, 2011, pp. 1079-1080.

Conclusion of Literature and Research Review

27

increases in shared mobility could halve vehicle kilometers travelled by 2050 and thereby reduce CO2 emissions from urban transport by 30 %.180 When comparing the potential of freefloating car sharing and station-based car sharing, it is notable that the positive impact of station-based car sharing is much higher than that of free-floating car sharing, as the latter is often used as an addition to a car and therefore does not reduce vehicle ownership or vehicle kilometers travelled as much. However, free-floating car sharing is more popular and increases the presence of car sharing, attracting more people to the concept.181 In Germany, car sharing user numbers have grown to 2.5 million users, which is 3 % of the population. In metropolitan areas, this ratio is higher (12 %).182 About two thirds of all users can be attributed to free-floating car sharing covered by Share Now, the joint venture of the two largest providers car2go and DriveNow.183 Every car sharing vehicle replaces 15 private vehicles in Germany on average, and 62 % of the users sold their private vehicles prior to or upon car sharing use, most of which were station-based car sharing users. The socio-demographic profile of car sharing users in Germany does not deviate from results from other countries.184 2.4.2 Open Issues in the Literature and Research Hypotheses Despite all the studies evaluated in section 2.3, several authors acknowledge that the available research on car sharing is still limited, especially on free-floating car sharing.185 This assessment becomes particularly apparent when considering that many current papers still reference car sharing studies that are over ten years old, as was necessarily also done for this thesis in rare cases. Car sharing is still a growing concept that currently caters to a niche customer base, and the free-floating version is particularly young. As user numbers increase globally and economic, environmental, and housing conditions change, it is vital to conduct newer studies to confirm whether some of the older findings still apply. Guirao et al. (2018) noted that different research methodologies have been chosen to study car sharing, from programming models to the evaluation of real data from providers and cities. However, the most prominent methodology to study user behavior and habits has been quantitative data research in the form of surveys.186 The authors followed this approach, and it is also applied in this thesis. Dias et al. (2017) mentioned that previous studies largely focused on

180

Cf. International Transport Forum, Transport Outlook, 2019, p. 97.

181

Cf. Nehrke, G., Loose, W., Car sharing, 2018, pp. 23, 70.

182

Cf. infas, DLR, IVT, infas 360, MiD Ergebnisbericht, 2018, p. 83.

183

Cf. Statista, Car sharing-Anbieter, 2019, no page number.

184

Cf. Loose, W., Car sharing, 2016, pp. 12, 27.

185

Cf. Clewlow, R. R., Sustainable travel behavior, 2016, p. 158; Clewlow, R. R., Mishra, G. S., Disruptive Transportation, 2017, p. 3; Dias, F. F. et al., Car-sharing and ride-sourcing, 2017, p. 1311; Guirao, B. et al., FreeFloating Car sharing, 2018, p. 244.

186

Cf. Guirao, B. et al., Free-Floating Car sharing, 2018, p. 245.

28

Literature and Research Review

descriptive statistics, which this thesis also includes but is not limited to.187 Liao et al. (2018) noted the importance of understanding what leads people to consider using car sharing and what factors influence their intentions of replacing private car trips with car sharing.188 Research to determine such factors can be designed in different ways, and Liao et al. (2018) mentioned the possibilities granted by regression analysis of related variables that influence the perception of car sharing. However, for their study they conducted a choice experiment based on a survey.189 Le Vine and Polak (2019) used a regression analysis to analyze the impact of using free-floating car sharing on private car ownership.190 Following their approach, a multiple linear regression analysis is conducted in this thesis to determine factors influencing the perception and use of car sharing in Germany, something the existing research has not yet addressed in detail. In the available papers, several factors, features, and use cases of car sharing were mentioned as having a potentially relevant influence on the perception of car sharing and the decision to use the service, which will be used as a baseline. Examples include factors such as cost saving, convenience, affiliation, sustainability, parking spaces at airports, fuel, insurance included in the price, and trip purposes (for example social / leisure, work, airport, shopping, transit, school).191 The hypotheses for the research conducted for this thesis are divided into three categories. The aim of the first category is to compare the socio-demographic profile of car sharing users according to existing literature and research with the sample of current and potential car sharing users in order to verify or falsify it and find out possible differences between current and potential car sharing users. However, the proportion of current car sharing users in the gathered sample is too small to serve as a viable point of comparison, as section 3.3 details, so the hypothesis is narrowed to the comparison of potential car sharing users according to the gathered sample and the profile of current car sharing users as detailed in the literature and research review. The resulting hypothesis is: 

H1a-e: People who rate car sharing positively are more likely to (a) be below the age of 30, (b) be employed, (c) live in big cities of over 100,000 inhabitants, (d) have university degrees, and (e) earn above 2,500€ in monthly net income.

Second, the rating of individual factors by certain groups of people is analyzed based on findings and theories from the reviewed literature and research. These theories include that younger people are more likely to use multimodal ways of transport and rate sustainability as increasingly significant, people living in smaller cities are less likely to shed their vehicles as a result of car sharing and prefer to use car sharing in addition to their own cars, students and pupils

187

Cf. Dias, F. F. et al., Car-sharing and ride-sourcing, 2017, p. 1320.

188

Cf. Liao, F. et al., Car sharing, 2018, p. 2.

189

Cf. Liao, F. et al., Car sharing, 2018, pp. 4, 7.

190

Cf. Le Vine, S., Polak, J., Free-floating car sharing, 2019, p. 119.

191

Cf. Müller, J. et al., Free-Floating Car sharing, 2015, p. 2571; Rayle, L. et al., Ridesourcing services, 2016, p. 172; Hartl, B. et al., Sustainability, 2018, pp. 96-97; Nehrke, G., Loose, W., Car sharing, 2018, p. 70.

Conclusion of Literature and Research Review

29

have the highest use of car sharing for leisure activities, and students and pupils are more interested in using car sharing to save costs.192 The resulting hypotheses are as follows:     

H2: Car sharing use in combination with public transport is rated more positively by people below the age of 30. H3: Sustainability is rated more positively by people below the age of 30. H4: Car sharing use in combination with a car is rated more positively by people living in smaller cities with less than 100,000 inhabitants. H5: Car sharing use for leisure activities is rated more positively by students and pupils. H6: Cost saving is rated more positively by students and pupils.

The third category is the analysis of factors, features, and use cases that impact the use and perception of car sharing, and it is the main aim of the research. Since this question has not been addressed by existing studies yet, the research is explorative and not based on predefined hypotheses. Therefore, instead of analyzing hypotheses derived from existing studies, the results of this research can be used to generate new hypotheses for future research.193

192

Cf. Tils, G. et al., Car sharing, 2015, pp. 7-9; Clewlow, R. R., Sustainable travel behavior, 2016, p. 163; infas, DLR, IVT, infas 360, MiD Ergebnisbericht, 2018, pp. 47, 66, 83; Loose, W., Car sharing, 2016, p. 27; Nehrke, G., Loose, W., Car sharing, 2018, pp. 33-34.

193

Cf. Döring, N., Bortz, J., Forschungsmethoden, 2016, pp. 192-193.

3

Research Design

After a review of the available literature and research to analyze the state of the automobile industry, the trend of mobility services, and car sharing in detail, research hypotheses could be derived. The design of the research for this thesis is clarified in this section. The research design is structured into the approach of the research, the research description (including sampling and survey structure), and a descriptive summary of the research results. On this basis, section 4 provides the evaluation of the research prior to the conclusion in section 5. Regarding the research process for quantitative research as detailed in the approach of the thesis, the first two steps (research topic and state of literature and research) were completed in the previous section, and steps three to seven (research design to data processing) are now being elaborated. 3.1

Research Approach

Based on the literature and research review, the current state of the automobile industry and the details and potentials of car sharing were analyzed in section 2 to derive research hypotheses. The approach of the research conducted for this thesis is detailed further in this chapter, including the aim, chosen research methods (which form the basis for the research description in the form of sample), distribution, and survey structure in section 3.2. 3.1.1 Aim of the Research The existing research as analyzed in section 2 addresses car sharing mainly on a general level and focuses on the socio-demographics of car sharing users, how their travel behavior changed due to car sharing, and whether they sold their cars or decided against the purchase of new ones as a result of car sharing membership.194 What has not been addressed so far are the specific factors or characteristics that lead people to use or consider car sharing and what levers exist to increase the interest of people in car sharing. These questions are important, however, as car sharing is still considered to cater to a niche target group, based on the available socio-demographic analyses.195 Understanding what factors affect people’s mindsets towards car sharing allows providers to tweak their services to better address these factors and potentially increase

194

Cf. Sioui, L. et al., Car-sharing, 2013, pp. 67-69; Loose, W., Car sharing, 2016, pp. 12, 25; Liao, F. et al., Car sharing, 2018, p. 22.

195

Cf. Kopp, J. et al., Free-floating car-sharing, 2015, p. 450; Liao, F. et al., Car sharing, 2018, p. 5.

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2020 J. Kopp, Success Factors for Future Growth of Car Sharing Services, Business, Economics, and Law, https://doi.org/10.1007/978-3-658-29889-0_3

32

Research Design

the use of car sharing. Therefore, the research conducted here is designed to address these questions and provide insights on relevant levers car sharing providers can apply for potential future growth. 3.1.2 Chosen Research Methods In the area of data evaluation, there are several different forms and methods to choose from. Descriptive statistics help bring the available data into forms that can be analyzed for initial findings regarding the research questions, and selected data are depicted in graphs and tables.196 For more detailed analyses, more advanced statistical methods can be applied, and these are classified into univariate statistics, bivariate statistics, and multivariate statistics. Univariate statistics focus on single variables that are analyzed regarding their frequency distributions and can be used to calculate position measures (such as median and mean) and scatter measures (such as variance and standard deviation).197 Bivariate statistics set exactly two variables in relation to each other and can give insights into what degree one variable depends on another.198 Multivariate statistics process multiple variables at once and thus allow for more complex evaluations of relationships between dependent and independent variables and analysis of more complex research questions.199 To analyze the hypotheses created in section 2.4.2, a mixture of the different methods is applied, namely proportion tests, t-tests, correlation analyses, and regression analyses. Proportion and t-tests are hypotheses tests designed to analyze whether a sample differs significantly from either a known target value or from a different sample based on a statistic figure such as the mean.200 The central elements of these tests are the so-called null hypothesis and its opposite, the alternative hypothesis, which is tested to find whether the null hypothesis can be rejected.201 This is done by calculating the p-value (a statistical figure indicating the probability of fault of a statistical test) and testing whether it is below a certain significance level.202 This significance is typically expressed in one of four levels: p-value >0.05 (not significant), p-value