Andre Clarke is Vice President Australia & New Zealand at Frost & Sullivan. I spoke to him about the future of mobility in Australia and he believes that owning a car in Australia may soon become a thing of the past.
Australians have long love affair with cars but with the rise of car sharing, the trend of car ownership is declining gradually. Why?
Owning a car in comparison to car sharing is quite expensive. For instance, the household cost of operating a car in Sydney, which is highest across Australia, is AUD 419 per week (or AUD 21,788 per year). The figure is inclusive of vehicle cost, maintenance, insurance and fuel for the period of over 10 years—an average lifetime of a car in Australia.
Furthermore, adding cost of owning car space and 5% mortgage for it with aforementioned equation will bring the cost of having a car to AUD 30,000-AUD 50,000 per year.
This is one of the primary reasons that is encouraging Australians to adopt car sharing as ideal means of mobility than purchasing a car. For example, GoGet under its GoFrequent membership model charges AUD 30 per month for six months initial contract. Apart from this, it charges AUD 6.35 an hour under this contract. Similarly, Flexicar under the membership model Regular offers an hour drive in AUD 9.5. This membership model is tailored for those customers who make more than 3 trips a week.
What are the driving factors behind the growth of car sharing?
Primarily, there are two major factors driving the growth of car sharing – cost saving and community benefits.
Car sharing can reduce traffic congestion and pollution as single car sharing vehicle can offer multiple trips per day. It means less private vehicles on the roads and consequently significant reduction in carbon emission, noise pollution and greenhouse gases.
Besides, car sharing also induces large savings for the community. As per Frost & Sullivan estimates, a shared vehicle represents AUD 48,000 to AUD 58,000 in value to the community in Sydney.
How do you see the future growth of car sharing in Australia?
Car sharing is motivating people to shift from low-use car ownership to low car ownership. A car often sits idle for over 20 hours a day on an average. Probably, this is one of the key reasons propelling the growth of car sharing membership in the country. Research at Frost & Sullivan shows Sydney and Melbourne are likely see the strongest uptake of car sharing over the next 7-8 years propelling the market to grow at close to 20% year-on-year.
There are more than 20,000 car share users in Sydney and the number is expected to rise significantly in near future because more than 35% denizens here do not own a car. Melbourne, on the other hand, is likely to attract new car sharing service providers in the city as it has already approved a policy to install 2,000 car share spaces by the end of 2021.