The Business of Mobility: How technology drives profitable business in carsharing

INVERS CEO Alexander Kirn reflects on the company's 30-year journey in global carsharing tech, emphasizing technology's role in enhancing operations and user experience amidst the transition to MaaS.

The Business of Mobility is a series of articles featuring business leaders in sustainable mobility.  

Q&A with Alexander Kirn (CEO at INVERS) and Ross Douglas (Founder at Autonomy)  

It’s been 30 years since Uwe Latsch invented automated vehicle sharing and founded German-based carsharing tech company INVERS in 1993. Today, 60 percent of carsharing players In Europe rely on INVERS to “develop and maintain the fundamental building blocks of their tech stack”. 

Ross: Congratulations on your 30-year anniversary. What is the secret of your longevity and success in the industry?

Alexander: We are a tech company that specializes in making mobility shareable. We’ve always focused on this purpose, so that today we are the first-choice tech partner for carsharing operators around the globe in more than 60 countries. Over the years we’ve stayed close to our customers, with the aim of solving their technology headaches so they can focus on the commercial and brand-building aspects of sharing. Our goal is to use technology to optimize operations of carsharing providers and ultimately improve the UX for carsharing users. The basic platform for that is our telematics solution, INVERS CloudBoxx, that turns regular vehicles into a connected, shared-ready fleet. Starting from that, we develop new solutions for the industry’s key challenges by exploring and leveraging the potential of innovative tech trends like for example AI.

Ross: How do you use AI and machine learning to improve carsharing?

Alexander: A major inhibitor for carsharing is damage to vehicles and associated liabilities. Companies lose as much as 10 percent of revenue because they cannot properly assign liability for damage. We’ve collaborated with our partner carvaloo, to build an AI algorithm that helps detect damages in real-time and that more accurately assigns liability. 

Ross: Autonomy is now focusing more on decarbonization; how do you see your solutions fitting into this broader narrative; do you see carsharing companies take more of an interest in electrification and decarbonization more generally?

Alexander: In general, our technology is drivetrain agnostic. However, over the last years, we have seen a constantly growing share of EVs in our customers’ fleets. For instance, in Germany over 20 percent of today’s carsharing fleet consists of EVs. That is 6 times more than the overall German fleet of privately owned cars, of which only 3 percent are EVs. Carsharing companies are clearly supportive of decarbonization and we support them in this wiih special features. For example, our tech can check whether the charging cable has been put back into the car at the end of the rental. That said, EVs do provide an additional layer of complexity in the operations due to the need of a suitable charging infrastructure and the charging times. 

Overall, we take a broader approach towards future mobility and sustainability that goes beyond electrification: our vision is a flexible mobility offering. When you ‘flexibilize’ the car, you help people get over the hurdle of ownership, and you encourage them to explore other mobility options, like cycling and micromobility sharing, which we are also involved in. 

Ross: Yes, the most sustainable vehicle is the one you do not own. Carsharing companies have a good story to tell in terms of reducing emissions. However, a good decarbonization story is no guarantee of commercial success. Can you talk about the business model for carsharing; how do they sustain profitability in a time when we have so many mobility options? 

Alexander: We’re seeing an interesting phenomenon over the last few years, with the business model of carsharing companies converging with those of other mobility services. Before you had several distinct models: carsharing as a type of car rental for longer trips, free-floating carsharing for shorter trips as well as subscription, leasing and traditional rental. Our recent INVERS Mobility Barometer: European Free-floating Carsharing notes how carsharing operators are tending to hybridize their business model, offering a combination of free-floating, station-based, peer-to-peer, and sometimes car subscription and automated rental, too. At the same time, we see interest from traditional rental operators in digitizing their traditional rental to become more of a digital mobility service.

Ross: Carsharing should be a no-brainer; but we still do not see mass adoption of sharing as an alternative to ownership. How do we move the needle on this?

Alexander: Regulation will have to play its part; we see the potential for cities to support carsharing operators with attractive parking spaces and dedicate more street space to non-car mobility, which would immediately incentivize sharing. On the other hand, advancing technology is having a positive impact, as we develop tech solutions for key challenges that improve carsharing users’ experience. For example, we will soon add a smoke detection system to our offering, which is important for users who want a smoke-free vehicle. We’re also working with a customer on ‘teledriving’ technology, which could add a whole new dimension of convenience when the car your booked in your app is driven remotely to your doorstep and taken back again the moment you leave it in your destination. So, with technology we can smooth out the friction that inhibits adoption, make carsharing a good user experience and a profitable business.  

Ross: What’s the prognosis for the industry?

Alexander: Carsharing is not a huge industry, but one that has been steadily growing over the last couple of years. In Germany carsharing companies are growing their fleet by 15 % per year. Main markets in Europe (not including Turkey and Russia) currently have over 50,000 vehicles in their free-floating fleets. Statista estimates that there will be 63 million car sharing users globally in 2027, up from 36 million in 2017. While the idea of carsharing may not have justified the early hype, it is a good concept and business which is enjoying strong growth. 

Ross: At Autonomy we talk about the transition ‘from motorist to mobilist’; from ownership to on-demand flexibility. 

Alexander: Digitizing vehicles’ means you build in flexibility that serves two perspectives; one is that it allows companies to flexibly shift vehicles into different service offerings and respond in real time to changing demand. It is why we developed INVERS FleetShare, where operators with complementary usage patterns can move vehicles between fleets in response to changing demand, even if they belong to different companies. The second perspective on flexibility is that of the user: comfortable and reliable carsharing services makes the car one mobility options among others, offered in a flexible, digitally available mix. For the user, this means the freedom of choice.

Ross: One can imagine the potential for cross-sharing of vehicles, whereby corporate fleets, which are underused over weekends, share their vehicles to car rental companies, where weekend demand is high.

Alexander: Exactly that. We have the technology for this sort of thing; and there are already early use cases for it. It might not be top of mind today, but as cars become more expensive, companies will look to get vehicles off their books and to treat mobility not as an asset, but as a service. The answer is for everyone, including the corporates, to make the transition away from exclusively assigned vehicles to mobility-as-a-service (MaaS). 

Ross: Is that what we can expect over the next 30 years of INVERS?

Alexander: Yes, we’ll see the shift to MaaS, supported by digitization, and we’ll see innovations such as self-driving functionalities and different vehicle form factors such as microcars and even air taxi services add further impetus to MaaS. Our mission is to reduce the need for ownership as people use the appropriate mode of transport for their specific trip, factoring in the hidden costs of keeping an underutilised asset in the garage. 

Ross: We’re optimistic that the age of mobilist has begun and kudos to INVERS for building the tech to get us there. Thank you for your time.

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