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Shared cars to boost sharing economy?

China Daily | Updated: 2017-07-21 07:02
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Indirect promotion of new-energy cars

Zhang Xu, a senior analyst with Analysis Corporate, a data analytics company [Photo/China Daily]

A notable factor in the carsharing business is that instead of hiring the vehicles, many car-sharing companies own them, and thus could use the profits they earn to buy new-energy vehicles. For example, Yiyi Auto owns more than 100 electric cars and 15 charging stations in Beijing.

In fact, new energy vehicles already have a large share of the car-sharing market. So by promoting the car-sharing business, the authorities will indirectly promote new energy vehicles, which are less harmful to the environment. One way the authorities could promote car sharing is by allowing carsharing companies to use the underutilized parking lots.

Also, the car-sharing business is not likely to turn into an investment war, such as the one between Didi Chuxing and Uber. Despite investing heavily to purchase or hire cars, the car-sharing companies cannot expect booming business or rapid growth in the short term.

In all likelihood, the carsharing business will grow at a steady pace because to expand rapidly, the companies will need huge investments. And they are more likely to use the profits to expand their businesses than passing them on to users in the form of concessions or subsidies, ruling out the chances of a price war.

 

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