The day of the car company living and dying by sales numbers alone may soon become a thing of the past. Customers are looking to save money, even if that means only getting a car when they need it. Some companies are taking notice of this, and are becoming more three-dimensional in their approach to generating revenue by providing quality vehicles to those with a pressing need.
General Motors is a well-known name in the automotive industry. The company has been praised for their commitment to quality, as well as their tendency to innovate. An example of their forward-thinking mentality can be observed in their use of the mobile platform to impact the car-sharing industry.
Using Maven, an app-based renting tool, users can get temporary use of GM vehicles for rates as low as $8 an hour – including gas. This tool has been compared to other similar apps such as Zipcar. This unique solution was launched at the beginning of 2016 with high hopes for satisfying demand in both the renting and ride-sharing industries.
Combining GM’s understanding of quality vehicles with a decentralized approach to making rentals more accessible has proven successful to say the least. With big cities like Boston, New York City, Los Angeles, Washington DC, Chicago, Baltimore, and Detroit all showing favorable results from their use of the app, GM has announced plans to debut the app in a new market – San Francisco.
Management at GM have viewed these efforts as an investment rather than a simple cost. Given that spending more money on advertising may provide diminishing returns when it comes to promoting auto sales, redirecting efforts into another revenue stream has helped the company grow – it has also helped them remain relevant in an age where mobile devices, apps, and demands for convenience dominate the market.
These investments have helped to put about 60 cars across 30 locations in these cities. With over 10,000 members and more than 15 million miles between them, it’s clear that GM is on to something. Given the importance of transportation in a port-city like San Francisco, this new market may very well help continue the trend of success that Maven has been enjoying.
Not all efforts of this type have been completely successful. Car2Go is an example of a similar solution that had trouble becoming established in newer markets. But given that GM has the type of inventory, reputation, and financial backing to support this kind of effort, it is likely that Maven will have the same type of success in “The City by the Bay.”
Other giants in the automotive industry have been taking notice of how an evolved business model can provide opportunities for growth. Chariot, a San Francisco-based shuttle service, was purchased last month by Ford.
Management at GM hopes that establishing a large presence in active markets will give them the return they need to continue expanding. Plans for continued expansion in the west will be pursued over the coming months.