Mobility as a Service: A Threat or Greatest Opportunity?

Transcription

1 Mobility as a Service: A Threat or Greatest Opportunity? Your photo here John F. Possumato President & CEO Automotive Mobile Solutions LLC Haddonfield, NJ #NADASHOW

2 2 The views and opinions presented in this educational program and any accompanying handout material are those of the speakers, and do not necessarily represent the views or opinions of NADA. The speakers are not NADA representatives, and their presence on the program is not a NADA endorsement or sponsorship of the speaker or the speaker s company, product or services. Nothing that is presented during this educational program is intended as legal advice, and this program may not address all federal, state, or local regulatory or other legal issues raised by the subject matter it addresses. The purpose of the program is to help dealers improve the effectiveness of their business practices. The information presented is also not intended to urge or suggest that dealers adopt any specific practices or policies for their dealerships, nor is it intended to encourage concerted action among competitors or any other action on the part of dealers that would in any manner fix or stabilize the price or any element of the price of any good or service.

3 3 WTF?... Welcome to the Future? Uber, the world s largest taxi company owns no vehicles. Facebook, the world s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. Airbnb, the world s largest accommodation provider, owns no real estate.

4 4 Mobility as a Service: A Threat or Greatest Opportunity? What is MaaS? MaaS Why is it an opportunity now for dealers? How can you profitably and flexibly get in the game to be prepared for the future?

5 Mainstreet & Silicon Valley 2 Different Worlds/2 Different Languages 5

6 6 It s not the strongest of the species to that survives, nor the most intelligent that sur v i ves. I t i s t he one t hat i s most adaptable to change. -Charles Darwin It s still Day 1 of the Internet and of Amazon.com: T hough we are opti mi sti c, we must remain vigilant and maintain a sense of urgency. * -Jeff Bezos * Concludes every annual letter to shareholders by reminding readers of this, since his first annual letter in 1997

7 7

8 Change is Evolution. 8 Invented Digital Photography in the mid 80 s dismissed it. In 2000, NetFlix Founder Reed Hastings approached Blockbuster CEO John Antioco and asked for $50M to sell and merge the companies NetFlix is now worth 83B

9 And Things are Changing 9

10 10 Owns a Stake in Lyft Inc. Controlling position in Hertz Global Holdings 1,900 Service Centers Icahn Automotive Group (Pep Boys, Auto Plus, Driveline Systems Owns Federal Mogul Holdings Corp (aftermarket parts)

11 MaaS Will Dramatically Effect Vehicle Ownership 11 Source: Deloitte Source: University ARK Investment Press, The Management future of mobility: LLC What s ark-invest.com Next? 2017 Issue 20

12 What Do These Valuation Predictions Mean for the Future? 12 IHS Markit Predicts from 2017 to 2040: More Miles Travelled by Cars Than Ever Global vehicle miles travelled up 65% from 2017 to 2040 Fewer Cars Needed By Individuals Vehicles sold decrease by 33% from 80M to 54M

13 Good News - Deriving Revenue & Profit per mile generates more $ than the one time sale of a vehicle 13 OWNERSHIP Annual Revenue = Vehicle Sales x Price 17M x $30,000 = $510B Industry SHARED Annual Revenue = Miles Driven x Cost/Mile to Drive 260M vehicles each driving 15k miles per year = 3.9 trillion miles 3.9 trillion miles X 60.8 cents per mile = $2.37 trillion dollar industry

14 Bad News: MaaS Providers aren t just Predicted to Take the Value of Taxi Companies 14

15 Bad News: but predicted to absorb the value of the transportation infrastructure as we now know it 15

16 Yet Let s Keep this in Perspective: These Start-ups have lost Billions in 6+ Years of Operation 16 Uber 2.52B in Losses in 2 nd & 3 rd Quarter of 2016 Lyft lost $4 a ride in 2016 but reduced that to $1.20 a ride on higher volume in first half of 2017

17 17 and not without Emerging Issues NOTIFICATIONS British panel rules Uber drivers are employees, not contractors Are Uber Drivers Employees? The Answer Will Shape The Sharing Economy

18 18 For Those Who Think Uber is Intimidating? Loss $9,000 per vehicle with cap cost of less than $30,000 in 18 months (40,000 vehicles)

19 19 Do Autonomous Vehicles Make These Models Work?

20 20 Not until vehicles service, clean and repair themselves as well

21 Get to Know & Understand the MaaS Business GET IN TODAY SO YOU CAN LEAD TOMORROW 21 PAST YESTERDAY TODAY FUTURE OFFLINE VEHICLES SERVICE INTEGRATION VEHICLE AS A SERVICE MOBILITY AS A SERVICE Private vehicles No online support Enhanced vehicle interfaces Integration of local services Car services such as vehicle sharing Private Fleet Public Intermodal mobility with different offerings and mobility schemes Customized mobility on demand based on individuals

22 Why Current MaaS Entrants Are Not Optimal Did a Great Job of Establishing the Market, Changing Regulations & Conditioning Customers. No structural cost competitive advantage No customer or driver loyalty price driven (best deal) No low cost service and maintenance infrastructure No walk-in customer base No installed network fixed facility

23 Why Car Dealers are Best Positioned for Lower Cost of Asset (vehicle) MaaS?? Cover Variable Cost and Every Additional Dollar of Revenue Falls to the Bottom Line Lower Cost of Maintenance & Management of Asset Fixed Facility Already Paid Out (Service Facility, Storage) Lower Cost of Customer Acquisition (Already Sales Service Hub) Residual Financial Benefits Retention of Service Revenue Closings on Previously Un-Bankable Deals Peer to Peer Car Sharing is F & I Upsell for Online & On-Location Sales

24 24 The Fact that No One Seems to Acknowledge Dealers are already positioned to be more profitable in car sharing & ride sharing than any Start-Ups

25 25 if you If you get started before the industry changes, the current start-ups get profitable and dealers less so

26 26 Definitions: Car Sharing Station Based Peer to Peer Free Floating

27 Definitions: Ride Sharing/Ride Hailing 27

28 28 Worst Kept Secrets: 1. Largest fleets in the USA, yet do not manage their fleet each is just a software platform that has become a commodity 2. Critical need for new drivers & Majority of new applicants do not have vehicles

29 How to Get in The Game 29

30 30 What You Need - Car Sharing Platform: Software/Hardware

31 31 Platform Application Questions RETAIL keyless automated station based or

32 32 Platform Application Questions WHOLESALE satisfying the critical need for ride share (Uber/Lyft drivers)

33 33 What You Need - Car Sharing: Insurance Must disclose, old policies usually not applicable New insurance departments are being created specifically for car sharing Liberty Mutual, Assurant both active Watch that Deductible! Still an emerging science

34 34 What You Need - Car Sharing: Training & Market Promotion RETAIL Automated but needs promotion WHOLESALE Demand is immediate but Touch Points are desirable

35 35 What You Need - Ride Sharing Platform: Note quite commodity yet, but forecast to be soon Insurance: Similar to car sharing providers Training & Market Promotion: Even the leaders are Making it up as they go along Uber & Lyft are basically just an App with first mover advantage but in a very price sensitive market; once the App becomes a commodity, any vendor that has the lowest cost becomes a potential leader (hint)!

36 36 MaaS: Turn-Key Vendor Option - Learn the Business/Minimize Risk

37 37 Manufacturer Programs Book by Cadillac - $1,800 a Month PassPort by Porsche - $2,000 a Month (Clutch platform)

38 Coming Up 38

39 Dealer Based Initiatives 39

40 Dealer Replacement MaaS Start-Ups 40 Bought all of Uber s Xchange Leasing s Vehicles hmmm

41 Dealer Focused MaaS Enablers 41

42 A Strategic Approach to Entering MaaS 42 Stage 1 Wholesale car sharing at the store: Vehicles to current ride sharing drivers Low Cost/Risk High Return Additional High Profit Department Additional Vehicle Sales Additional Fixed Operations Revenues Successful Implementation Leads to Stage 2

43 A Strategic Approach to Entering MaaS 43 Stage 2 Retail car sharing at the store: Vehicles to general prospects & customers Builds on foundation platform - Software/Hardware, Insurance etc. Set-Up Additional profit from car sharing department Retain current customer; no migration to 3 rd Parties Additional fixed operations revenues Fits, but not dependent on, OEM initiated programs

44 A Strategic Approach to Entering MaaS 44 Longer term benefits of Stage 1 & Stage 2 Car sharing Implementation Provides flexibility to adapt to alternate future scenarios (or anything in between):

45 A Strategic Approach to Entering MaaS 45 Longer term benefits of Stage 1 & Stage 2 Car sharing implementation Prepare for the Future: Current Ride Sharing Giants Dominate Experienced in servicing fleet management needs Established ride sharing partnerships with vendors Current Ride Sharing Giants Go Bust Experienced in MaaS with database of drivers and customers As ride sharing platform becomes commoditized easy to implement local ride sharing services

46 46 Investigate Offering MaaS Today See how you can conduct it profitably experiment, get in slowly and experiment Work with the Industry Leaders, be able do more and more of the pieces yourself Be there to replace THEIR infrastructure and business, if THEIR funding runs out Be prepared to profit, no matter what the future holds

47 Questions 47

48 Mobility as a Service: A Threat or Greatest Opportunity? Your photo here John F. Possumato) President & CEO Automotive Mobile Solutions LLC Haddonfield, NJ #NADASHOW