In an earlier post, I wrote about how the future of transportation is one where we access autonomous electric vehicles. However, I didn’t address the question of whether these car access networks will own their fleet of cars or aggregate the cars of individual owners when those cars are not being used. Here’s how I think about this problem.
A car access network that owns its fleet of cars will be able to achieve a lower unit cost per car due to its bulk manufacturing (if it’s an OEM) or bulk purchasing (if it’s not an OEM) volume. In contrast, a car access network which aggregates the unused cars of individual owners will be paying these owners a fee which takes into account the higher per unit costs at which these individual owners purchased their cars. It will also incur the additional cost of transporting the car to the owner’s location when the owner wants to use it.
As a result, the car access network with its own fleet will be able to serve passengers at a lower price point than the network which aggregates the cars of individual owners. And since passengers will flock to the network offering lower prices, as long as the network has the financial capital to fund the up-front cost of its own fleet and enough political capital to receive fair treatment when competing for the right to serve a specific region, it will win over the network aggregator.
Also published on Medium.