How can scalable subscription management solutions help Mobility-as-a-Service providers to adapt to individual customer requirements and at the same time fully exploit the growth potential of the booming business through a high level of automation?
CarSharing services – the face of the mobility transformation
Mobility today is far more complex and comprehensive than it was just a few years ago. There are many more ways to get from A to B than using your own car. It is also no longer the undisputed status symbol that it was in past decades; urbanization is even making it superfluous at times. Local and long-distance transport is becoming increasingly well developed, and e-scooters and long-distance buses have successfully established themselves among the population. However, there is another concept that, while not entirely new, has enjoyed increasing demand in recent years: car sharing and the concept of shared mobility. But how is the expansion of the services progressing and what role do modern technologies – such as subscription management solutions – play in the industry?
Car-sharing services fit the sustainable zeitgeist
As housing in cities becomes more and more expensive, parking space becomes more limited and public transport connections get better, many people are now able to get around without their own car. But if the journey turns out to be a bit longer or you want to leave the city for a short time, car-sharing services have established as a viable option. Occasional drivers in particular benefit from the business model. More and more people are taking advantage of shared mobility and what it has to offer; in 2021, there were 2.87 million customers, over half a million more than in the previous year. Business is growing, and therefore is the need on the supplier side for adjustments to the portfolio of services offered to the growing customer base.
Sustainability is becoming increasingly important in our society. Quite a few claim that sharing cars is essential for achieving climate targets. Customers are placing more and more emphasis on the origin of products in their purchasing decisions, living minimalism, and foregoing superfluous consumption in order to conserve the planet’s dwindling resources. Thus, CarSharing services have all the basic prerequisites to meet society’s requirements in line with the current zeitgeist. The changing consumer behavior of customers naturally also opens up new challenges for providers. Flexibility is just one of many factors here, which can also be met by providing a free-floating model, among other things.
Free-floating – the flexible alternative to station-based CarSharing
Car sharing is not always the same concept. Today, a distinction is made between two different concepts for shared mobility. On the one hand, there is the original, station-based variant, in which a vehicle must be picked up at a point nearby and then returned to the exact same location. This implies a prior booking and a specifically defined return time. The station-based CarSharing service is comparable to a rental car service. This contrasts with the far more flexible model of Free-floating, which only gradually evolved from the station-based form. Free-floating means that vehicles can be parked in any public parking area within a specified area. Those who need a vehicle locate it via smartphone and book the ride only immediately before setting off. Costs are billed by the hour or minute, depending on the provider. Gasoline, insurance and parking fees are already included in the price.
Technologies and Software Solutions – The Factors for Scalability and Success
Above all, however, car sharing and free floating providers need technologies and software solutions to be able to offer and expand their business model, e.g. booking, management and billing of the services. In this context, providers are faced with a wide range of issues:
- How can we automate recurring incoming and outgoing payments?
- How do we scale our business model sustainably and efficiently?
- How do we optimize our business-relevant processes and ensure that the technological processes running in the background are state-of-the-art?
- How do we integrate discount promotions and specials into our billing platform?
- How can we efficiently handle in-app purchases?
- How can we sustainably improve customer relationships?
- How and where can we reduce costs while maintaining the same level of service?
- How do we keep track of all relevant KPIs?
- How can we integrate data analytics to generate a sound basis for future decisions?
While some car sharing service providers continue to develop solutions in-house, others are moving to place these requirements in the hands of specialists.
Subscription management software as an important component
Mobility as we know it – or rather knew it – is undergoing a transformation in which digital technologies in particular are playing a key role. For example, in the complex billing and accounting processes that car sharing or free-floating services require in the background.
To achieve end-to-end automation of business-relevant subscription processes and exploit the full growth potential, providers can rely on professional subscription management software. Subscription management software provides answers to the key questions posed in the previous section and allows companies to focus on their core business without worry.
Business and technical challenges
For the providers of car sharing or free floating, the business model brings with it a variety of technical as well as entrepreneurial challenges, caused primarily by changing consumer behavior. Constantly changing factors that providers must pay attention to and adapt to bring challenges to entire business models. Most companies are still not profitable, even 10 years after they were founded. There are various underlying factors here.
High competition in metropolitan areas & lower demand in small cities
Whenever there are (relatively) new business models, there are also many providers who try to gain a foothold and expand their own position. In major cities such as Berlin or Cologne, for example, there is a high level of supply with correspondingly high competition.
On the other hand, car sharing and free-floating providers are a rare commodity in smaller cities – not to mention rural areas. This is due on the one hand to the infrastructure, and on the other hand to the needs of the population, who often do not want to drive without their own car because of the long distances between towns.
Bureaucratic hurdles hamper the feasibility of CarSharing services
Another factor is that a CarSharing service cannot simply park the vehicles in a city and roll out the service there. You have to convince local authorities, comply with municipal requirements, go through approval processes, analyze parking situations, and so on. Bureaucratic hurdles make the process even more protracted. An automated solution thus makes it easier to handle the subscription model when other settings have to be made in a more complex way.
Lack of infrastructure for electric cars
The expansion of car sharing with electric cars, which is important against the backdrop of climate change, is currently being held back by the lack of charging infrastructure in Germany, which ist just a the beginning and is not growing as fast as the number of newly registered electric cars. In order for car-sharing services to make a significant contribution to climate protection, they need to catch up.
Technical modifications for car sharing & free-floating offers
The vehicles that are offered as part of car sharing or free floating must be adapted: Additional safety precautions and modifications are required on the immobilizer or central locking system. Connecting a new type of vehicle and making it compatible with the offer can take several months.