Shared bicycles are in deep trouble, and shared car platforms have also collapsed one after another. Could it be that they have encountered a false trend?

Shared bikes are known as China's new four great inventions, but recently both ofo and Mobike have fallen into a very difficult predicament. At the same time, another major category of the shared economy, shared cars, has also encountered a wave of closures.

Is the sharing economy really a false trend?

At present, there are more than 70 car-sharing apps launched in China. Many of these platforms have transformed from car rental platforms to car-sharing platforms, some are launched by car manufacturers, and others are startups that provide car-sharing services. Some traditional international car companies also hope to get a share of the Chinese market: Daimler Group entered the Chinese car-sharing market through Car2go; BMW vigorously promoted its BMW i3 and MINI models through ReachNow.

However, the shared car market is not going well. Most shared car brands are still struggling to survive, and even more brands have gone bankrupt.

In 2014, the CoCar car-sharing platform announced that it would stop providing services. In 2017, two car-sharing companies, Youyou Car and EZZY, went bankrupt. In May this year, Muggle Travel announced its bankruptcy.

Many newly established car-sharing platforms have gone bankrupt one after another, which makes people wonder whether car-sharing is a false trend?

The capital-heavy model drags down the shared car platform

Although both are part of the sharing economy, shared cars are much more difficult to operate than shared bicycles.

The cost of deploying shared cars is much higher than that of shared bikes. The cost of deploying vehicles on a large scale alone is too much for many platforms to bear.

EZZY founder and CEO Fu Qiang said: "The day after I received 20 million in financing, I started looking for new financing because we knew very well that this amount of money was not enough."

Let alone 20 million yuan in financing, even 200 million yuan in financing is not much for shared cars. Conservatively speaking, if the cost of each car is 100,000 yuan, even if all the 200 million yuan is used to deploy cars, only 2,000 cars can be deployed. This is far from meeting the requirements of large-scale operation.

What's more, the cost of deploying vehicles is only a part of the many costs of operating shared cars. Not only does deploying vehicles burn money, but the labor cost of operating shared cars is also very high. Shared cars require a lot of labor costs in scheduling, cleaning, maintenance, charging and other links.

Some people say that shared bicycles are a mirror that reveals the quality of the nation. This statement also applies to shared cars.

The various uncivilized habits of Chinese people when using shared cars are consuming the limited funds of the operating platform. Careless driving leads to scratches, unhygienic behavior pollutes the car environment, damages the facilities in the car, steals the parts in the car, etc., which are very troublesome for the operators.

Although car-sharing seems to be very popular at present, the funds raised by each platform are actually very limited.

Compared with shared bikes or online ride-hailing services, which can raise hundreds of millions or even billions of dollars, the financing for shared cars is pitifully small. However, shared cars face the dual pressures of vehicle deployment and offline operations, and are more dependent on funds.

Some car-sharing platforms are inefficient. There are not enough vehicles deployed in areas with high demand, and the vehicles deployed in many areas are idle. The lack of intelligence in backend scheduling and data integration capabilities is limiting the profitability of the operating platforms.

At the same time, the car-sharing market has not yet been fully explored. The small market and the single profit path make it easy for car-sharing companies, which are already short of funds, to face capital shortages or even breakages. The collapse of most car-sharing platforms is related to the breakage of capital chains.

In addition, the current shortage of infrastructure such as shared car charging stations and parking spaces is also restricting the development of shared cars.

Spring may be late, but it will come

Although shared cars currently face many problems, the various operating platforms are constantly improving and many innovative business models have emerged.

Considering the high cost of vehicle deployment and the huge stock of idle car resources, making good use of existing car resources has become a breakthrough in solving the high cost problem of shared cars.

Fengniao Auto has revitalized the idle resources of the traditional car rental industry, while AUTO Auto has expanded its car sources among individual car owners. This way of making full use of idle car resources has gradually enabled the shared car operation platform to move towards a light-asset, heavy-operation model.

In fact, if the operating platform purchases vehicles by itself, it will not only fail to achieve large-scale operations like bicycles or online car-hailing services, but also fail to meet the original intention of developing shared cars and improving vehicle utilization efficiency.

Many current car-sharing platforms, such as Dadao Yongche and Yikai Travel, have avoided the fiercely competitive first-tier cities and moved to second- and third-tier cities with fewer players. Although the market size in first-tier cities is large, there are many competitors, and parking resources are scarce and licenses are tight. Entering second- and third-tier cities has won development opportunities for these platforms.

The development of autonomous driving technology has provided more room for imagination for the development of shared cars. Although fully autonomous driving is still far from mature, L3 level autonomous driving has been increasingly improved, especially the autonomous driving technology in closed scenes is becoming more and more mature.

In April this year, gofun demonstrated its automatic parking technology in cooperation with Zhixingzhe. In May, Panda Car Rental demonstrated its driverless automatic car pick-up and return technology in Liangjiang New District, Chongqing, and plans to launch automatic parking at the end of the year.

Autonomous driving technology can enable cars to automatically pick up and park, which greatly reduces the manpower cost of vehicle operation and maintenance. In turn, the application of autonomous driving technology in shared cars is also conducive to sharing the high research and development costs of autonomous driving.

The application of other intelligent technologies is also improving the operational efficiency of shared cars. In June this year, Shanghai issued the "Shanghai Small and Micro Passenger Car Time Sharing Management Implementation Rules", which requires operating vehicles to be equipped with "face recognition", "emergency alarm", "on-board satellite positioning" and other devices.

Although this policy will increase the cost of purchasing additional equipment for some platforms in the short term, it can promote the standardized operation of shared car platforms in the long run. Facial recognition, vehicle-mounted satellites and other facilities can help operating platforms supervise vehicle users and reduce uncivilized vehicle use, thereby reducing maintenance costs; at the same time, it can also reduce risks and improve user experience.

Car sharing has many advantages. From a personal perspective, car sharing can more conveniently meet people's car needs. Compared with traditional car rental, car sharing does not require picking up the car at a designated store. You can search for the location of nearby shared cars and scan the code to unlock the car, which greatly improves efficiency.

Many people cannot get a license plate and cannot afford to buy a car, but the demand for cars still exists. The policy of restricting driving and purchasing is also creating a market for shared cars. Allowing people without cars to use cars conveniently and even experience luxury cars is the market foundation of shared cars.

For society, the development of shared cars can reduce people's willingness to buy cars, while integrating idle social resources and improving resource utilization, which will help alleviate urban traffic congestion and improve urban operation efficiency.

Considering the social benefits of car-sharing, the government will also introduce a series of policies to promote the development of the car-sharing industry. On August 8, 2017, the Ministry of Transport and the Ministry of Housing and Urban-Rural Development jointly issued the "Guiding Opinions on Promoting the Healthy Development of Small and Micro Passenger Car Rentals", which clearly encourages the use of new energy vehicles for time-sharing leasing.

As the central and local governments have issued guiding documents on shared cars, the capital market is also gradually following suit.

Data from the China E-Commerce Research Center show that by the end of December 2017, car-sharing had raised 76.459 billion yuan, becoming the highest-invested sector in the shared economy in 2017. This is undoubtedly a timely help for car-sharing platforms that are in urgent need of funds.

At present, the consumption capacity of those born in the 1980s and 1990s is gradually increasing. These people are willing to try new things and have a high degree of acceptance of the sharing economy. In the future, they will become the main force of shared car consumption.

Although the shared car market still needs further exploration and various conditions are not yet mature, with the increasing maturity of shared car operating models, the increasingly sound infrastructure, and further improvements in policies and capital environment, the spring of shared cars will eventually come.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.