Mobile is disrupting the auto industry. For millennials, the car has been replaced by the premium smartphone as their go to status purchase. In urban centers, ride-sharing services like Uber have turned on demand transportation into a practical alternative to ownership. It’s not a difficult decision to make when you’re choosing between buying a depreciating asset that spends 95% of its time sitting unused, or simply renting it.
Looking a bit further out, self-driving cars will completely change the economics of driving. They will drop the cost per mile to a fraction of what it is now, while insurance companies will raise rates for people that still insist on driving themselves.
Faced with these realities, GM recently announced a $500 million dollar partnership with ride sharing service Lyft. The deal will give Lyft drivers access to GM vehicles on a rental basis, encouraging more people to earn extra income without having to own their own vehicle. Longer term, GM will develop a fleet of on-demand self-driving vehicles for Lyft customers.
Moving from an ownership model to a rental model is one of the biggest transitions GM could make. The writing is on the wall, it’s going to happen one way or another. This a smart move by GM to go mobile-first before someone else can disrupt their business.
Those who may be at most risk here are GM dealers. I’ve worked with GM dealers before. They’re smart businesspeople who are already working hard to adapt to the reality of how mobile has changed the automotive path to purchase. I’m sure a lot of them are asking what their role will be in this new mobile-first future.