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1 Introduction

Services like ZipCar, Car2Go, BlaBlaCar, Uber and Lyft have increased the use of different versions of car sharing. Some systems of car sharing involve renting a car from fixed locations, widely distributed in an urban area. These schemes can be peer-to-peer or fleet owned and managed. Fleet managed services can be run on a return-to-base system (such as ZipCar), or on a free-floating basis where the car can be returned anywhere (such as Car2Go). Other schemes, like BlaBlaCar, will offer intercity rides for a (low) price on a shared car. The driver planning the original trip will offer these rides on a peer-to-peer basis. Car-hailing systems have the added convenience of request and payment done through an app. UberX and UberBlack, Lyft, Didi and Ola are examples of services that are essentially door-to-door. A complementary system is to share a ride in a vehicle, for example, UberPool. This offers a service that is door-via-door, which has sometimes been called micro-transits. All of these will be affected by the advent of CAVs (unlike many other use cases of AVs ride-hailing requires connectivity, for the user to request and direct the car).

Automated driving brings to the fore the issue of ownership and other forms of vehicle use. The availability of AVs at levels 4 and 5 will create an important reduction in costs for individual journeys as there is no driver to be paid. This is expected to generate conditions where the trade-off between the convenience and incremental cost of hiring individual journeys (over the aggregated costs of owning a vehicle) changes significantly in favour of hiring.

The main issues that help decide between owning and hiring seem to be:

The marginal cost of owning and using or simply hiring an AV as MaaS. Once the vehicle is owned it is cheap to use even if the annual or whole-life costs, particularly depreciation, are high. Hired vehicles as MaaS must cover all costs, but some fixed costs, like depreciation, are spread among a large number of users, diluting their importance.

Practicalities of owning compared with hiring. If it is desirable to leave equipment or materials in the car, then it is more practical to own it. If different vehicles are required at different times (e.g. a larger vehicle is required during weekends to carry the family), it may be more practical to hire the appropriate car for the occasion than to own multiple ones.

Convenience. This is a ‘suitcase word’ with many meanings. In a dense urban area, it may be very convenient to hire, as response times will be short and there will be no parking problems. Owning may be more convenient in suburbs, as wait times for a vehicle are likely to be longer and parking is not a problem.

Cultural differences. In some regions, ownership is perceived as a status statement. In other regions, or in other age segments, the sharing economy is more attractive.

The last point suggests that ‘drivers’ or factors that influence the choice between owning and hiring differ by region, social groups and age groups. It is worth considering these differences when estimating the extent of this choice in any one place. These estimates are difficult. The decision to own or hire cannot be fully explained by rational means. It is close to impossible to fully imagine how it would feel to decide between two - or more - options (on how to use a technology) that are essentially unknown to us at present. Market research tools like Stated Preference or Conjoint Analysis give only a very preliminary approximation.

2 The choice of owning or hiring

The mode of use of CAVs will influence a number of things. Firstly, the vehicles will have to be Level 5 to operate with no driver, the most disruptive case. The panel expected that MaaS use of CAVs will be attractive in large cities first, in particular in places with parking restrictions. It will then extend to smaller urban areas and eventually to rural usage. High urban density and significant MaaS use will reduce the time from booking to service.

Companies like Uber and Lyft are well placed to replace human-driven vehicles with CAVs as they have the experience and technology to allocate vehicles in advance to areas where they are likely to be needed. Nevertheless, they need to develop the skills to manage, stable, clean and maintain large fleets – a task currently assigned to drivers.

In order to provide an initial estimate of this choice, the expert panel was asked for their views on the proportion of the vehicle fleet that would be owned or hired as MaaS. The range of views is summarised below:

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On average, the expert panel estimated that 42% of AVs would be owned. Latin Americans seem to be more attached to owning a vehicle and their average expectation is 56%. Western Europeans are at the other extreme, perhaps because they are used to better public transport, with only 33% ownership estimated.

Overall, more than 60% of the answers stated that the majority of the CAV fleet would be available for hire. One possible interpretation of the figure below is that respondents are split between those who love cars and driving, and those who care only about Mobility as a Service, be it public transport or AVs. Emotions strongly influence views of the future.

The panel thought CAV MaaS would be cheaper than current Uber fares, on average estimated to cost 90% of current fares; but this hides a significant range of views. Some respondents believe that the absence of a driver will more than compensate the additional cost of purchasing and running CAVs. CAV insurance is likely to be cheaper as well. Others seem to think that CAV MaaS will have to sort out large stabling and maintenance facilities and that maintenance costs, because of more demanding standards, will also be higher. Currently, Uber and Lyft take advantage of the ingenuity of their drivers to park and look after their vehicles.

The most important cultural driver, mentioned by the vast majority of respondents, is the value attached to owning a visibly attractive piece of hardware. This was described variously as the “pride of ownership”, “self-realization through ownership” and “status symbol”. These all promote ownership over hiring.

Second in importance among respondents was that certain types of use strengthen the case for ownership:

  • The need to customise it to carry children of different ages and requirements, for example, child seats, emergency nappies and bicycles
  • The need to store and carry tools of your trade, including power and hand tools, drum kits
  • The advantage of storing and carrying some leisure equipment like golf clubs, yoga mats and gym bags
  • The pursuit of outdoor activities would favour ownership or at least rental of an appropriate vehicle to support them when needed

Then came age, or willingness to explore new technologies. It was suggested that younger people are less keen to own cars today (true in most advanced countries) and are more willing to try new ideas. It was assumed that they would probably be early adopters of AVs for hire and that older people may feel unsafe in an AV.

The quality of the service offered by hired AVs was another. If an AV arrives dirty or in poor shape, or if it does not look as if it is properly maintained, then the attraction of hiring will be diminished significantly. High urban density would favour hiring over ownership as, with more AVs nearby, it would take less time to secure one. High frequency of use, for daily commuting or work, would favour ownership. Reverse urbanisation, or flocking back to downtown, would favour hiring.

Capital versus operating costs appeared under other headings as well. It is well known that most car owners do not perceive capital or operating costs very well. Capital is a sunk cost and does not affect the decision to use the car. Vehicle Operating Costs (VOC) are rarely perceived in full. Fuel costs alone are vaguely associated with travel, whereas maintenance, insurance and licence costs are just recurrent nuisances for the privilege of owning a car.In contrast, a hired vehicle will be priced to account for all of these, including depreciation (and AVs, as computers, may suffer higher technology depreciation). This issue of perceived costs will work against hiring AVs, at least for those already used to owning a car. Multiple car families may opt to replace one car with CAV MaaS.