With the acceleration of connected vehicle technology, the automotive fleet industry is going through a rapid evolution. Traditional business models are making way for new ones, driven by connectivity, with the term ‘shared mobility’ becoming commonplace. Just as the taxi industry has had to compete with the emergence of ride hailing, traditional vehicle rental is now being challenged by the relatively lower cost, flexibility and convenience of car sharing.
This has prompted the rental industry to look at ways to evolve, and the car sharing industry at ways to continually differentiate itself. A major step in this evolution has been enabled by vehicle OEMs who now commonly offer mobile phone-based keyless entry systems, manageable via their cloud portal. Replacing the physical vehicle keys with digital keys – held on the driver’s smartphone, which the fleet manager can issue via a secure cloud portal – is a real opportunity for the fleet industry as it looks to address key challenges of cost control and commoditisation. Any such solution, however, needs to have the flexibility to cater to multiple users across multiple vehicles and there are several obstacles that the industry will need to overcome to unlock the mobility business models of the future.
The connected services evolution
First and foremost, with any connected service, given that satisfied customers mean repeat business and more predictable revenue, an improved and personalised user experience should be of paramount importance. For example, tailoring the in-vehicle experience to the individual needs of the customer, even before they pick up the vehicle – from IVI preferences to vehicle settings and so on – helps customers feel valued. This sense of personalisation applies with both car sharing and car rental, especially with renting high-specification models. Supporting this at the vehicle requires appropriate integration by the OEM.
The pick-up and drop-off process can also be optimised through information delivered to customers’ phones to the pick-up and drop-off points. In addition, the adoption of flexible pricing models, with users only paying for usage, could help attract customers. Example models could include:
- Driver profiles – Establishing a user profile based not only on driving behavior, but also geo-location, time of day, and so on. For car sharing, this could be applied in addition to charging by the hour or minute, resulting in a more tailored price and a service differentiator. A similar principle could be implemented for the rental market.
- Premium charges – Customers sometimes extend their use of the vehicle. This can lead to lost revenue if a further multi-day rental has been scheduled with another customer. Having the customer immediately accept the additional charge (possibly a premium) and easily applying it to the keyless access policy means the revenue loss can be mitigated. The same can be done for adding additional drivers and creating additional digital keys.
In addition, related service industries, such as insurance, can also benefit from this concept of flexible pricing. The fleet operator who can adopt these services will differentiate themselves from the competition.
Enabling connectivity without fear
An enabler for these services is digital keyless vehicle access using smartphones – recent innovations in keyless entry include proximity detection, automatic trunk opening and push-button start and with additional rich functionality and flexible integration, it can unlock new business models in shared mobility. While this sounds attractive from a business standpoint, it must be remembered that with the addition of any new components to a system, a degree of risk is introduced. This risk pertains not only to performance and reliability of the system, but also in security, since the security of any system is only as strong as its weakest link.
Much has been written about organisations needing to treat security as an inherent part of doing business, not merely as a cost at the bottom of a spreadsheet. That’s very difficult to do if, for example, you’re a fleet manager, trying to outrun the onset of commoditisation, by competing on something other than just price. It’s natural to not want to introduce further business risk or have to worry about something other than your business goals.
It is well known that keyless entry systems present one of the most popular ways to steal a car. A report in January 2019 by ‘Which? Magazine’ in the UK, stated that four of the most popular models in the UK are susceptible to theft using relatively inexpensive equipment purchased online. A common method to achieve this is known as a Signal Amplification Relay Attack (SARA). The thieves use inexpensive ‘relay’ boxes; one placed near the car and the other near where the key is typically located. This ‘lengthens’ the signal making the key seem close to the car. They then open the car, start it and drive away.
This threat can be mitigated with proper security. More technically savvy thieves, however, may progress to other methods such as ‘Man-in-the-Middle’ and ‘Man-at-the-End’ attacks. Through understanding the attack vectors and implementing a defense-in-depth approach to security, the fleet industry can mitigate these risks and use security as an enabler for new business models.
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