With “Maven” Is General Motors Driving Into The Future?
General Motors (NYSE:GM) recently announced that it is launching a new car sharing service called “Maven” which combines the company’s multiple programs under one brand, with the mission to give customers access to highly personalized, on demand mobility services. [1]. This announcement comes on the heels of the company’s acquisition of defunct ride hailing start-up “Sidecar” and its $500 million investment in ride sharing company Lyft. [2]. Earlier in January, Ford Motors announced the launch of its program “Ford Pass”, which marked the beginning of its transformation into an auto and mobility company. [3]. Since an increasing number of consumers prefer ride sharing to car ownership, we believe automakers are investing into the future by transforming themselves into mobility service providers, as well as auto manufacturers. General Motors’ recent initiatives are directed towards this goal.
Ownership Models In the Automotive Industry Are Changing
According to a study conducted by the University of Michigan’s Transport Research Institute, there has been a significant decrease in driver’s license holders in the age group of 20-24 in the U.S. While nearly 92% of the U.S. population in this age group had a driver’s license in 1983, this number declined to nearly 77% in 2014. [4]. The decreasing number of young license holders indicates that car ownerships will decline going forward with ride and car sharing becoming more popular. Although the U.S. automobile market was strong in 2015, as technological advancements make it easy and convenient to share rented cars, the number of people owning cars may well decline in future. Based on their recent initiatives, it is clear that auto makers such as General Motors and Ford are investing in mobility to adapt themselves to this changing trend. General Motors stated that Maven is a key element of its strategy to changing ownership models in the automotive industry. Maven customers can rent cars by using its app to search for and reserve a vehicle by location or car type and unlock the vehicle with their smartphone. The car can be shared with other commuters of the same locality. Maven, combined with General Motors’ investment in ride sharing company Lyft, provides the company a foothold into the emerging trend of car and ride sharing.
Under the Maven brand, General Motors launched its car sharing program at the University of Michigan, targeting more than 100,000 people, though initially focused on serving university faculty and students. In the first quarter of 2016, Maven will launch car sharing services for Chicago residents and expand its existing residential program in New York City. The company is working on refining and testing future Maven commercial offerings in its campuses in the U.S., Germany and China.
As automobile trends shift towards car sharing, ride sharing and autonomous cars, we believe, General Motors’ investment into personal mobility solutions is strategically timed to tap into future growth trends.
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Notes:
- GM Launches Personal Mobility Brand: Maven, Company Release, January 21, 2016 [↩]
- GM buys Uber rival Sidecar which shut down in December, Cars Technica, January 2016 [↩]
- Ford Invests In Making Customer Experience As Strong As Its Cars, SUVs, Trucks And Electrified Vehicles With Ford Pass, Ford Media Center, January 11, 2016 [↩]
- Recent Decrease in Proportion Of Persons with A Driver’s License, Across All Age Groups, University Of Michigan, January 2016 [↩]