The future of corporate mobility

An often-discussed industry trend is the shift from private vehicle ownership to the use of new mobility modes such as car-sharing, ride-hailing and ‘Mobility as a Service’ solutions. This shift offers huge growth potential and has greatly disrupted the automotive industry, with millions of users taking the shift to their benefit.

Similar developments are starting to take place in the corporate and business travel market. The traditional model of company car ownership for executives is becoming less attractive, with corporations demanding more convenient, cost-effective and on-demand solutions for their employees. These corporations are also increasingly experiencing pressures to become more sustainable, and an easy way to fulfil this is by offering employees shared mobility solutions instead of personal company cars.

The ownership model

Providers of these services have already started shifting away from a total cost of ownership model, where the total vehicle costs are appraised over a lease’s lifecycle, towards a cost of usership model. This revolves around allocating specific utilisation figures to each employee and giving them access to several vehicles on demand, offering more flexible leases/corporate car-sharing solutions. The final step in this evolution is an offering based on the cost of mobility, where providers offer other integrated services beyond cars such as public transport and allocate a mobility budget per employee.

The market response

There have been significant developments in this space, with multiple well-established, long-standing fleet and leasing companies scrambling to diversify their offerings. . For these leasing companies, partnering with car-sharing and ride-sharing technology firms is often a quicker route to market than in-house IT development, as in the case of BlaBlaCar’s partnership with ALD and Opel. Simultaneously, mobility providers are offering customised corporate solutions to their customers to attain a market share in this rapidly changing sector. Concur has partnered with Ola, offering corporate travel solutions in the UK, India and Australia, and Uber also has several business-oriented solutions.

In the future, rigid corporate car offerings will be forced to become far more flexible. As the Covid-19 situation has highlighted, commuter behaviour can dramatically change at a moment’s notice, and how this will affect the corporate mobility charge in the coming months is still unclear. A recent consumer study conducted by the Capgemini Research Institute highlighted a growing wariness from consumers about shared mobility solutions: nearly half of the respondents said that they will use their car more frequently than public transport and shared mobility services as a result of the current health situation. Furthermore, individual car ownership is set to become more popular, with younger customers (<35 years) being the largest segment considering buying a new vehicle in 2020

Nonetheless, as traditional work patterns continue to evolve with more people working remotely, sustainable shared corporate mobility solutions still show significant promise in the long term. Corporations have seen that the demand for traditional corporate car offerings from their employees is falling, alongside a significant push for organisations to become more sustainable. In any case, it’s safe to say the days of all employees driving to work 5 days a week in a company car are a thing of the past.

Author

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David Zimmerer

Consultant – Capgemini Invent UK

David is a Consultant in the Customer Engagement practice at Capgemini Invent with a strong automotive background. ​With hands on experience delivering market research and strategic consultancy for clients, David has in depth expertise in areas covering future mobility, automotive value chain operating models, connected services and shared mobility implementations. ​