Sep 25, 2019
EP020 - CEO of MuvMe, Inc., Steven Messino, and Senior Carsharing Consultant, Dave Brook
Episode 20 is an interview with Steven Messino, CEO of MuvMe, Inc., and Dave Brook, Senior Carsharing Consultant for Carsharing.US; recorded on Thursday, September 12th, 2019. Scot, Steven, and Dave discuss a variety of topics, including...
The four pillars of Vehicle 2.0 are electrification, connectivity, autonomy, and changing ownership models. In the Vehicle 2.0 Podcast, we will look at the future of the auto industry through guest expert interviews, deep dives into specific topics, news coverage, and hot takes with instant analysis on what the latest breaking news means for today and in time to come.
This episode was produced and sound engineered by Jackson Balling, and hosted by Scot Wingo.
Scot: Welcome to the Vehicle 2.0 Podcast! This is episode 20 and it's being recorded, September 12th, 2019. In this episode, we are excited to have two guests from the car sharing industry. First we have Steve Messino CEO of move me and he's joined by Dave Brook senior car sharing consultant. Welcome to the show guys.
Dave: Thank you!
Steven: Thank you for inviting us.
Scot: Oh, Steve let's start off with you. Let's we, we like to take listeners through a everyone's career path. So, so how did you get into the exciting world of automotive and car sharing?
Steven: Okay. Basically I was consulting in Silicon Valley for various companies, so I came across a car share that started around the same time around 2011, 2012 as get around and what you now know is zero. And they were in a very similar business. They were all doing peer to peer car sharing. Ended up working with them for awhile. Them I went and did a project with probably at the time was the biggest car sharing software provider in the world, which was not a vera out of Toronto. And during that episode, Oh, we need to be create demand. So he thought of doing webinars because lots of people had an interest in car sharing but did not know a lot about the business or the market. So I went and did research and found out who were the leading experts in the industry of which Dave Brook was one of them.
Steven: And the person who originally started the industry in the United States. So we, Dave and I ran a series of webinars. Oh, format, Avera. And then after, and we ended up finding a large number of people who wanted to get into the business. But it's very similar to a large number of people who want to start a laundry or a restaurant. Most of them didn't know a lot about it. And this got tied with Metta. Vera sold to enterprise, so there was no longer a major provider in North America. My phone rang constantly and I started talking to Dave and I said, we have all these people who want to do this. Why don't we offer them a package of, we'll teach them how to run once you've successfully run one days and we'll put together the technology and get them operational. And from that point on, David has been doing this or probably every major car share car company insurance company in the world, but I'm sure you'll be a little more humble. Dave, you want to give your additional background?
Dave: Sure. Thanks. I guess I'm a serial entrepreneur and in the mid nineties, I started reading about this a wacky idea called car sharing that was starting in Europe at the time. And it seemed like a, a, an interesting idea that would have some application here in the United States. So I talked to people in Switzerland that had been involved in their very earliest car shares 10 years before in the late eighties. And it was sort of realize that, well, this wasn't rocket science. It was pretty, you know, straight forward to moving parts. So I stepped off the cliff a couple of years ahead of anyone else and started car share in Portland, Oregon. I was financing it out on my own pocket to, it was kind of before the VC and angel investor world sort of got to interested in mobility and transportation things.
Dave: And after starting my company I was approached by another group of people from Seattle who wanted to do the same thing, only they wanted to do it on a much better finance scale than what I was doing. So I help them get going and after not to, after a couple of years it made sense for me to merge my company with what was flex car which had not only national aspirations, but did expand the in a 10 or 12 different cities all over the country. And they were going head to head with another company out of Boston that started two years after mine called Zipcar. And eventually the two merged and you know, under the Zipcar banner. And so that was the birth of you know, commercial car sharing in the United States. It, after a couple of years working for Flexcar, I decided that the corporate life was not, not for me.
Dave: So kind of weighted out my noncompete agreement and then started consulting and I had been approached by a fellow Shelby Clark who had this idea of using private cars, privately owned cars, your, your car, my car, and being a platform to rent out those cars to other people. The same car sharing concept. And so the big challenge for any car share starting is finding insurance. Cause most people don't understand. Most insurance companies don't understand the special requirements of, of car sharing. But so get around Shelby's company was a relay rides, which is now called we're o, t,U , R, o. And m. Again, almost at the same time another company was starting, which is get around know, which is the other peer to peer company. And they've grown. And so for the last 10 plus years I've been working with they're startups. I've been working with auto manufacturers, insurance companies, helping them understand the, the, the car sharing space where it fits into overall mobility and okay. And having a good time at it. And then it's, that's how I met Steve as he, as he said.
Scot: Very cool. So we definitely wanna dig more into that d what I find interesting is you guys were so early with the zipcars flex car you know, and then the f the iPhone came along, which really seems to have enabled these models to, to be a lot easier or at least more consumer friendly, right? Because with Zipcar, you'd have to Kinda go to your desktop, see what cars are there, run over there and hope that no one rented them out. Whereas with the phone now you have it all in your pocket and you can get more real time from a consumer's perspective, you know, know where the cars are.
Steven: Yeah. Right. That technology shift actually happened about June, 2012 if you watch that, nobody really bought applications on iPhones and android and all of a sudden in that period it just jumped. And then everybody wanted an app on their mobile phone.
Dave: Yeah, yeah. It it really did change things quite a bit. It, you know, the better, the more convenient you can make access to a shared car, the easier it will be for an individual to decide, well, this is so easy. I don't really need to own the car, spend all that money owning a car just to have it waiting for me out front. So it's a challenge for the operator to make it as convenient as possible. And you know, there's kind of multiple levels of convenience. One is finding the car and being able to reserve it. The next challenges, being able to kind of unlocked the car, you know, without having to go through a big a lot of steps and then taking the trip, returning the car and locking it up. And you know, that, so conveniences is what it's all about. And of course, keeping the car clean is the challenge for the for the car sharing operator.
Scot: Yeah, we're, we're learning a lot about that here, here on our side. So that's super helpful. Thanks for given the backgrounds. I feel like you guys are elder statesman of, of the industry. So it's going to be a fun discussion. And here on our podcast we call it the vehicle 2.0 podcast cause we've come up with this framework where we talk about the four of innovation that are just kinda crashing through the automotive industry. We talk about connected car electrification, autonomy, and then changing ownership models. Since you guys are really steeped in that, that, you know, car sharing side, we want to spend the bulk of our time there today. So, so let's start, you know, kind of the history is really good to know. And here we are, 2019. Steve, we'll start with you.
Scot: How do you feel, how do you think about the car sharing space? I'll look into it a little bit. There's you know, dug into this, there's some data points out there that say by 20, 30, maybe 10% of cars will be kind of, you know shared or not individually owned ownership. If that's a word and then a, I've seen another one that's the exact opposite where they'll say, you know, some kind of amazing thing, like 80% of cars will, will be you know, outside of the ownership as we know it today. Do you have a point of view on where we're going to be in kind of the next 10 years or so?
Steven: Well, this is actually a great question because I spend a lot of time, usually in the summertime thinking about where the market's going since I build technologies for it. And you always have to anticipate three to five years in advance of what's going to be coming. Dave and I, when we speak, we frequently get asked this question, the big mover and shaker here, we'll be the autonomous car as it comes along. But it's going to take awhile. Everyone likes to say it's going to be here next year, but it's only in trial. Car sharing is going to be here for quite awhile easily and now 20 years and it just gets convenient if you spend much time talking to millennials, they are not really fans of cars as the previous generation, so they're, they're more inclined to do car sharing, which has already proven out in all the demographics and still approves out today.
Steven: The, yeah, as they, as they get older they are gonna start buying cars because they're going to end up having families and that's going to be in cars so, but if they could get away with not having a second car, I think they'll do it in a nanosecond and it's easy to just spiral a second car to take kids to soccer practice on Tuesdays and Thursdays. If that's the only time you need the car or you needed a third time on Saturday to go shut up. I see this business being solid for 20 years. The primary technology change is as of 2018, 25% of all cars now have their telematics devices, which is what the smartphone shock to built into the cars. So probably in four or five years I'll, those of us who build technologies, well we'll be using the car is built in devices in order to talk to them.
Dave: I I would, I'm not sure how much or they are going to be the car's built-in devices because I think the manufacturers are going to keep that information to themselves in case their, to start their own business. So I think that the, this is the market for you should third party after market type telematics devices is going to continue for quite a while. Okay. As Steve and I differ slightly about the, how quickly autonomous vehicles are going to be a major factor, I think that they will start happening quite soon. I mean without, without 'em a driver without a, whatever you call it, the person sitting in the driver's seat. But I think there are going to be specialized applications. You know, Tesla's clearly shown there's a lot of that a possibility, but there may be autonomous taxis going in, you know, 10 years on a, on a fairly large scale and you know, some, something really basic to to sort of keep in mind.
Dave: There's no difference between autonomous Uber and autonomous Zipcar. There is just who, you know, what's the origin of the company?
Scot: Yeah, yeah. I think Travis a the founder of Uber, Travis Kalanick is famous for saying that they have a good business today, but they'll have a great business once they can get rid of the drivers. But you know, I mean, just because, you know, at that point he had like 2 million drivers. He's kind of a PR oopsies there that he was famous for. So cool. So that's good. Let's, let's kind of dive in a little bit. In peel that onion, there's, I kind kinda track, I call it seven different ways that people own cars. You've got your traditional ownership. You can obviously finance, most people do. You can lease a, and then we start to get into the newer models. You can rent a car.
Scot: So we've got the traditional rental car models out there. And then you've got ride sharing, which is kind of what Uber and Lyft represent today. And then car sharing when you've got peer-to-peer and then you've got, I call it B to c, but you guys probably have another name and then their subscriptions. First of all, I know you guys probably have what I've found in this industry. Everyone's got a little bit of a different vocabulary. So does that jive with what you car stop you guys call stuff or would you dispute and say no, there's different words.
Dave: This is Dave. I would I agree. I mean traditional ownership leasing or financing, you know, strategies for traditional ownership. Then you got rentals. There's daily, I mean we think of daily rentals, but a car sharing is, shall we say, hourly rentals and subscriptions is basically monthly or, or six months. You could call it a rental or lease and it really depends on how it's structured. But all of those are, are where you're doing the driving. When you get into taxis and when you get into what you're calling ride sharing you've got somebody else doing the driving and arguably autonomous vehicles are the machine is doing the driving. So the just basic, when when car sharing started in Europe, they started calling it self-drive taxi which is not quite accurate but a sort of make it captures that distinction. And you Scot alluded to the, to the distinctions of different ownership models of car sharing. The ease of the business owns the car sharing business owns the vehicles or leases, the vehicles. That's most common or it's the what in the industry we call peer-to-peer where it's private, it's a privately owned car that is being, you know, rent it out covered by the insurance of the platform that handles the rental.
Scot: Steve, any other input on the, on the models that we're talking about?
Steven: Yeah, I think w the up and comer that everyone's been talking to mine for the last year has been the subscriptions and that was, that was actually heavily driven by Uber and Lyft drivers and eating vehicles. All right. Actually it's existed for over about 15 years. It just became popular. We have a customer in Long Beach who's been doing it and provides cars under a subscription model. So if you want to drive a Ferrari, you can have a Ferrari for a week. If you want to afford C-max, you can have that for, and he just basically allows everybody who participates to have access to any kind of vehicle they want as long as they pay the fees.
Scot: Yeah. Interesting to talk about the newer models. It seems like we kind of had Uber and Lyft had their, their day and now they've gone public and those are really big billion dollar businesses. And then it feels like the peer to peer car sharing is where there's a lot of action at least. You know, I think Touro between Turo and get around, they've each traced about 500 million. So there's, you know, the big guys are playing, they're like the, the soft banks and the interactive corpse. The subscription one seems to be less popular with consumers. Especially, you know, the OEMs have these subscription programs and they look good. Like the BMW one's interesting. I think it's called access. And you look at it and you're like, this is pretty cool. I could just kind of, you know, switch out the car based on my needs. And then you look at the price and I think it goes 900, 1,520 500 a month and you're like, whoa. You know, that's, they, they feel like they're 2x the cost of a lease of that, that type of a car, which, which seems to be the initial reaction or when I talked to you is like, holy cow, they're way too expensive right now. Is that, is that what you guys see?
Dave: Yeah, it's a, I mean, you think of it from it. This is all kind of being done through dealerships. You know, the, the, the, the OEM might be trying to, to sort of test the market with these, with these subscription programs. Volvo has one as well. Oh, her has tried it, has tried it. But sort of what are you going to do with all these cars? If, if, you know, if you have your, your BMW, you know, seven series and you get tired of it. Now this dealer has this used BMW seven that so you can put on the lot or he can try to lease to somebody else. I think that's where, that's where they, the difficulty of that is coming from. Okay. Keeping the price so high.
Scot: Yeah, absolutely. Steve, do you agree subscriptions are facing some challenges at the, at least at the OEM level?
Steven: Yes. I, this was when subscription started with the OEMs. This to them was a great way of try out our BMWs, try our Mercedes, try out our general motors cars and see which one you like, drive it for a week and get them out there. But I agree with Dave the price that, because would you try to do when you're making cars available is maximize your usage in subscription. If they're sitting on the lot, they're not making money and then you have to charge a premium, you cover your costs. So I believe that's probably the challenge until they can get activity up. But I don't see activity going up just to Uber and Lyft drivers and people who are testing them. That's not going to drive it either. So subscription is going to be that. I don't think it's going to be a big player. I think it's definitely going to be there and there'll, there'll be competitors out there trying to win part of the business.
Scot: Cool. Let's talk about the peer-to-peer side and it sounds like you guys were there, the birth of it, and I'm coming in kind of here in 2018. It feels like a two horse race, Touro and get around get around, started really a little slower start, but a better user experience because they require, like they, they use this airbnb style English where you have the host and the guests kind of a thing so that they require their hosts, which is the car owner to have that device that allows you to remote your kind of remote control the vehicle or at least road access. And then and then so get around was really focused in the U S in a couple cities and then Touro didn't have that device and it allowed them to get a lot of cars on faster and more cities. But in the, now they've gone and they have a similar device where they can optionally have that you know, phone controlled access. Everyday to I point I see shows Troy at 80% market share get around at percent is. Does all that jive with how you guys think about the peer-to-peer space?
Dave: Yeah, I think, I think that's right. A get around has, you know, has focused attention on, you know, kind of don shall we say, dominating our getting good market share in a limited number of cities. As you say, Touro made a decision early on not to do technical a in car technology, that telematics device, but did what, what you know, we call key exchange. And I think that they are serving somewhat different markets. The, because of the lack of technology, a Toros rental periods tend to be longer. More like car rental, you know, daily day and a half, couple of days at a time. Okay. And get around because it has the technology, it is able to two, not only have the longer term rentals but can support the more urban car sharing type of, of access to the car for a couple of hours at a time.
Dave: So there they're going slightly differently. Both both, I want to say both of them have now expanded into Europe or European companies. It may only be one of them. And a, like you said, a Touro now does have a, a in car technology, which would allow this more spontaneous use of the vehicle without having to meet the the owner. But it's not a requirement and a, the people who are going to be most interested in it are people who I really anticipating, you know, renting their vehicles a lot rather than somebody who, you know, just wants to make a couple hundred extra dollars a month. So, you know I think it's a kind of a different strategy there. There clearly are people like airbnb. There are people who have simply gone out and bought used cars and put them on the, the P2P platforms. And you know, if they're in the right location and they price it right, they can make pretty decent money.
Dave: Yeah. We see that a lot. They call it a, they call it their side hustle out there and it's really big in la where people, they'll experiment on one of the networks with their daily driver and then they'll, they'll like the extra income, but they don't like having other people in their cars than they'll, they'll either, they're, they'll buy a new car and then they're daily at their first car, becomes the, the rental car and then they become power hosts pretty quick. Where, you know, we found these guys that have 10, 20, 30 up to hundreds of these cars that are just kind of have built this little side business doing this is pretty fascinating. Yeah.
Steven: Three or four years ago when these guys were growing we found a bunch of people in San Francisco who g who would get pests lists because there were so hard to get and they would post Teslas and they would charge one to $2,000 a day just to get access. Yeah.
Scot: At that level, it almost becomes like a a payday pay, the test drive kind of a model or something.
Steven: Yeah, exactly. What is the market? People would take it for the weekend, drive it and then decide if they wanted one.
Scot: Yeah, I see.
Dave: I think that people, one of the things that was surprising when, when relay rides with now Touro started was we expected that it would be cars would be a couple of years old before people would sit or be comfortable letting strangers drive them, you know, drive them when they, when like you said, when they first got them, they really wanted to [inaudible] kind of keep it special. But almost immediately cars less than a year old were showing up on the, on the system. So it part of it is just a, shall we say the younger generation has a different relationship to their cars then? Well maybe it's not only younger generation. Some people have a different relation to ship to their cars than others. You know, the people look at more functionally or they look at it as more of a personal, a personal statement, personal expression.
Scot: Cool. so now that we've laid some good groundwork for car sharing in the, in the and both your experience and everything let's dig in to move me. So Steve, tell us about you started talking a little bit about how you guys came up with the idea but give us kind of the overview of the company and, and what you guys do.
Steven: Well, good. So we're not, when we started it and I recruited Dave to give me some help, it was because people wanted to get into car shares and they needed to learn how to actually run a car, share what's involved in it. How do you start it with your business plan? How do you think through being profitable? David Woods does an expert at it. So, so when somebody's would come to us a look, we need the technology for some reason, first time people are interested, first thing they want is a technology and I'd say no, what you really needed to do was talk to David first and help you think through this business. Oh for the territory. It's in the your constituency that you want to serve. What their demands are going to be, what the population density is. These are all things David is an expert at.
Steven: Once they get past that part, then we get them to what kind of cars, where they need to be. And one of the decisions they get too is what kind of car shirt and they actually want to operate. Most ones, if there's small start out stations station or round trip, they, they operate very similar to the rental car. In other words, you get it here driving anywhere you want, return it. Once they start to get larger and more mature, then they moved to free floating because the capital costs of free floating are much higher. Instead of buying 10 the 50 cars, you're now buying 50 to 200 cars. And that requires investors to go make happen. And it's a, it's a more sophisticated approach and as time goes on, most of these companies, they tend, when one, these companies tend to do both. They tend to do both free floating and they do round shrimp or station to station.
Steven: So the effect on us was how do you build software that has to do all this and anticipate technologies. So let's even go look where things are going. From that point once you're starting to do a car share, some cars shares actually want to rent seats in the car, especially senior citizens. Hey, I'm thinking for other people, I want to charge them all. So, so now you have a car share turning into a ride share. So you have to adapt your software to go the ride sharing. Once you do that, then you have, okay for example, you can take a car that's not heavily rested, rented it and car share in the evenings, give it to Uber and Lyft drivers. Well, there's not just Uber and Lyft drivers. You can give it to doordash drivers. People are now delivering cargo, they can rent the car. And so you have to account for that in your, in your design so you're not just renting a car, your Hesta account for riders, cargo types of cargo and you can see it. And then of course the world went to suitors, bicycles and the technologies. Basically the same technologies that started in car share really take care of all of this. And so those of us in this industry, all we're trying to do is anticipate what the next move, what the next move is to make sure it's already prebuilt and ready for the operators when they're ready to go.
Scot: Got It. So your software, it seems like it's super flexible and it can provide all these different options and probably even an intermingling of the options. Is that a good characterization?
Steven: That is a great characterization and we had to do a complete redesign once we realize this industry is moving so fast and people are so creative that you have to adopt, adapt for them as quickly as you can.
Scot: Got It. Give us an idea of how many customers,
Dave: Yeah, Scot, it's a, it's kind of worth noting that there's a big overlap here between, you know, what we think of as classic car sharing, commercial neighborhood car sharing in a, in a city and fleet fleets use or can use similar software. Traditionally, you know, a fleet, a corporate fleet or a government fleet, you know, has a whole bunch of keys hanging on a wall or in a, in a lockbox and you, you check out the [inaudible] and pick up the key and take it back. But increasingly fleets are installing the same telematics that you know, Steve and I have been talking about here. And so they're able to shrink the size of their fleet a buy and getting much higher utilization because somebody could check out a car for a half a day. Somebody else could check it out that afternoon, whereas before you basically could only do a daily rental out of, out of that car.
Dave: So it saves money to the company or the agency. It allows them to manage it much more efficiently. It's the same technology and in particular with fleets you might want to you know, that company might want to offer the option of, you know, of somebody going across town to a meeting. They could take other people from the company with them. And so they need to not only rent the Co, you know, sort of access to car, but then assigned seats to two people. So it's in Europe they call it a corporate car sharing, but it's really just a fleet, a fleet system.
Steven: I think if you allow me to elaborate, what I think Dave is hit on is what was car sharing? One. Dot. Oh, and car sharing, one, two. Dot. O is kindly as is transmuting extremely fast.
Steven: And because of it, when little challenges start to come up. And one of the things we look at, believe it or not, as the technology is going to be autonomous cars, because these are ones we need to bring backwards into car sharing. So we, so we can know what's going on with people, cars, locations, making sure that cars get things that are futuristic. We're already addressing like making sure cars talk to each other so they know the state of what's going on or the vacant talk to the passengers so they know the state of the passengers. This is, you're going to see this world move as fast as a smartphone business.
Scot: Hm. Cool. give us an idea for a, the size of move me. Do you guys think about, about the number of cars in your network or the number of, of car sharing companies? How, how, how big of an impact are you guys having right now?
Steven: Okay. There's two ways to look at it, number of operators and number of cars. The fact of the matter is if you have an operator with a thousand cars, you actually put in almost the same amount of effort as somebody with 10 cars because everybody likes it their way.
Steven: No matter what you think to use your experiences, they think it should be different. Yeah. So, so you, it doesn't matter who you choose, they all want a better in what they perceive to be a better user experience. And so you have to meet
Dave: And in a way to differentiate themselves from the other guy. You know, it may not be better, it's just gotta be different.
Steven: And so that's what ends up which we end up doing is making it, you look unique for them. Yeah. So they look special in the market.
Scot: Cool. So how many cars does that equate to? Or operators, I guess. Correct.
Steven: Well, W with the average number on opera. Oh my God, it's all over the place. Dave, why don't you answer that better than me?
Dave: Sure. Well, I mean, the typical car sharing company is in a, in a, in an individual city is going to have a, probably a couple of hundred cars so they won't get there all at once. In the peer to peer, I'm sorry, in the this a one way free floating car sharing that we've, we've mentioned a couple times. The cars don't have a fixed location, but they can park in any legal, they can be parked in any legal parking place within a big zone, you know, kind of the inner part of the city and the people find where the car is located by, like you were saying at the beginning of the broadcast, you know, with, with a smart phone and they don't have a fixed reservation period. You don't schedule it. You just find the nearest car and keep it for as long as you want.
Dave: And if you're just driving across town, you might pay for that by the minute. And if you want to keep it longer than it ratchets up to by the hour and even longer by the day. Daimler and BMW have both have services that are now in the code process of merging right now, and it's going to be under the share now franchise. But these, you can't do this free floating with fewer than a couple of hundred cars because you, you've got to have them reasonably close to where people live or they're not going to use them. But, but there are car share co-ops all over the world and, and a bunch of them in Canada, you know, that they might have 40 or 50 cars. 50 is about the smallest you can do profitably. Otherwise you're, you're running it as a kind of a, a social, a social service, you know, probably a nonprofit.
Scot: Okay. And do you feel like, so you know, having experiment with these, it feels like the free floating as a much user experience than kinda like what'd you guys call Zipcars station to station? Or is that, I've heard some people use gated. Station to station?
Dave: Yeah, station to station. It's, we call it round trip because it's not, you can't take them between stations. You have to bring it back to the same station. With the, with the free floating there are no stations. You, you can just return them anywhere. It's, yeah, it's a, it's a different user experience in the sense free-floating is a different user experience in the sense of that you don't have to plan ahead. You don't have to make a reservation and you don't have to specify when you think you're going to bring the car back. Which is what you have to do in the, in the zip car model. But by the same token, because it's so flexible, the company has to charge a lot more of the per hour price of the, a free floating almost double what, what a, a station to station would be.
Dave: And in some cases it's even more than double. I just so the user, so I think functionally what happens is you, you satisfy a different type of trip. W the, the free floating membership typically is a lot bigger than the same a membership, the membership in the same town of the, of the round trip type car share. And I think the reason is is that you're able to do a type of trip with free floating that you can't do with round trip. And that's this one way trip where you can take it across town or you can take it out of town and bring it back, but you don't have to return it to the same place you started from. And so even car owners are interested in this free floating because it lets them take a kind of a trip that they can't do with their own car. So it's a different user experience and consequently it's a satisfying, a different mobility need than, you know, the classic, a round trip
Steven: To make it simple, free floating is really a great convenience factor. So you pay a premium probably as much as 49 cents a minute, but what you use car sharing, you're down to maybe 7 cents per minute. And if you're starting to rent those by the day, it gets down there one or 2 cents in there.
Steven: So it's really just a matter of convenience and, and that's the premium you pay for.
Scot: Yeah. Cause it's the operator free floating is probably a nightmare, right? Cause you had cars kind of watering all over the place. You got to go find them. You mentioned scooters earlier and I see these people trying to find these scooters that worked our way in all kinds of crazy places. And, and not only
Dave: That to, to sort of maximize the returns on the scooter, the companies have to spend a certain amount of time relocating the scooters because in the morning people, many people want to take the scooters and go to work. And then there might not be that much demand for the scooter during the day until the evening. And so they will relocate a certain number of scooters constantly. You see it in the bike share and you see it in the free floating car sharing as well. Usually in the free floating car sharing, it's a, they're relocating a car that is perhaps quite near the perimeter of the service area and there isn't much demand out there. And so they're going to move that car back into more of the heart of the service area.
Scot: Cool. I do want to spend a couple minutes on some of the other areas here that we talk about on the podcast that I think does a really good deep dive in the car sharing side. How about Steve, you mentioned autonomy a little bit that you think it's coming. It feels like for a long time it was like right around the corner and then this year it seems like it got pushed out a little bit. There was an incident with the one of the Uber vehicles hitting somebody and you know, even even the Waymo guys, the Waymo CEO said something like, I don't think we'll ever be at full a hundred percent autonomy. So there seems to be kind of, we're in that, you know, that that coming, the expectations are coming down a bit. Where, where do you put that? We'll have some pretty good ab penetration.
Steven: Well, in fact, Dave and I were talking about this before this, cause we, we get asked this all the time as the last numbers I thought that were reasonable is that you would see them as a norm in major cities about 2030
Steven: That, that would be the norm. I mean, are you going to use it to tow your boat in the suburbs now? But so for major cities, endless slowly grow outwards. Probably from that I was mentioning the days, when would we get to say 70% penetration? And it was purely my guests that maybe around 2075 you know, but that's a long way out. And part of it isn't, is because when you buy a car, it's got an 11 year life. Yeah. So you buy an asset like that, you're not going to dump it right away unless something's really unbelievably convenient and it's less expensive. So autonomy has to be there in your neighborhood all the time. And then whatever neighborhood you're going to, and that's gonna take a while.
Steven: Dave, your opinion?
Dave: I think that 70% number is is a, an important one to keep in mind because you know, there's lots of discussion about the the safety benefits that autonomous cars you know, are going to bring because they won't be acting irrationally like drivers do. And those benefits don't, don't you know, start showing up in insurance rates and, and a lower hospital admissions and things like that until you get to 70, 80% penetration, the 70 to 80% of the vehicles on the road are smart, are smarter than humans. And you know, if you look at the accident statistics of autonomous cars to date a very high percentage of them are, were caused by a, you know, kind of erratic behavior by somebody else on the road that the autonomous vehicle couldn't anticipate.
Scot: Darn humans.
Steven: If you run a show, what I found fascinating is when they were designing these in silicon valley about six years ago, I would attend all the sessions and listened to the PhDs talk about how do you deal with these human problems?
Steven: Such as if four cars are all hit a stop sign at the same time, who moves first? Well, the way humans do it is people start to nudge until somebody asserts themselves.
Dave: It's the guy in the test. It's the guy in the Tesla who goes first.
Steven: So much what I've been doing is you have, you have to teach the car to do the same thing, move a little bit, look around, see what everyone else does, move a little bit. And then if it's free, you move. So well, a lot of it is teaching them the cars to deal with humans.
Scot: Yeah. Where do you, I'm often when I kind of play this forward, the one group, I kind of think, I don't know what happens to them is the dealerships, you know, so, so it feels like a lot of the OEMs are viewing some of these models as an interesting way to almost go direct to the consumer. And then, you know, in than if by default people aren't gonna be buying as many cars, the dealership may become a service center. But then I always, you know, you know, the, you ask people, you know, when's the last great service experience? You had a dealership and you, you don't get a lot of grave responses except maybe Lexus or something like that. Do you see those guys being the kind of the, you know, where, where do they fit into this kind of, you know, world of 2030 where, you know, the, we've, we've got pretty good penetration of these new models.
Steven: Well, part of this, you look at the statistics right now, there's about one point $2 billion billion cars in the world. And if you, and you can look at any of the major research sites that is expected within a few years to drop down the 1 billion. And the largest effect on this is the sharing community car sharing, ride sharing. It's just, it, it's expected by about 2030 that it'll be 16 to 20% of the car market will be in the sharing industry.
Scot: Yup. What happens to that, do you think dealers are, that's a, that's a lot of hit for the dealers because presumably that's a 20% reduction, but it's going to be even heavier on new car sales. Right?
Steven: Yes. And, and also you're getting efficiency. If you start thinking on the autonomous car, could run 22 hours a day continuously as opposed to most Dave probably knows the most recent numbers. What's the average amount of hours of car shirt is used per day, Dave?
Dave: Well, typically a eight to 10 hours per day average.
Steven: So as you get more efficiency, you drive down meeting that number of assets in the world. Yeah.
Dave: See the, you know, I mean I think the car dealers can see the handwriting on the wall. Yeah. They have these longterm contracts with the manufacturers and they're struggling too to sort of figure, retain their role in the distribution a process.
Scot: Yeah. Interesting.
Dave: I wouldn't want to be a car dealer.
Scot: Okay. Yeah. I kind of come to the same conclusion.
Steven: Well, and as consumers go less to them you can, you can understand the challenge. Yup. Yup. You don't need as many in town. I mean, I'm Ford announced a reduction in the number of vehicles they're going to be producing. What is, what does the market really need? And I think we're going, not only are we going to see less dealerships, I think Ford made the right move. You're going to see less, less car types. Yeah. Cause you're not gonna need all these people competing. If you need a sedan, it's a sedan. As long as it runs relatively well, you're happy.
Scot: Cool. Well guys, we're this has been awesome. I could go a whole nother hour, but I know, I want to be conscious of your time. So one last question. If folks want to find follow, tweet, retweet, like whatever you guys online, where can they find your, your, how you're writing and thinking about the industry?
Steven: Dave, want to go first?
Dave: Sure. I have a industry blog that I've been writing since 2005 called car sharing. Dot. U S is the, is the web address, car sharing. Dot. U S
Steven: In my case, where at? MuvMe Inc Dot com Muv m e I n c.com and we're going to be doing a lot of promotion about the new technologies in the next few months that we're coming out with, and so we'll look forward to getting feedback from your audience.
Dave: Yeah, Definitely.
Scot: Awesome. Yeah, maybe we can have you back on and talk about that in a, but that's going to do it for today. We really appreciate you guys taking time out of your busy schedules, changing car ownership to come on the vehicle 2.0 podcast.
Steven: Thank you.
Dave: Thank you, Scot.