Memo To Insurers; EV Leasing/Sharing Could Steal Your Market. Seriously.

Straight talking from the Editor’s keyboard;

Newsflash; WeShare, Volkswagen and ŠKODA’s free-floating car sharing service, is to expand into seven further cities in Germany and other European countries in 2020. WeShare will be offering an all-electric fleet with a total of about 8,400 electric vehicles.

Hmm, you’re thinking, why should this news worry us insurers, comparison sites, MGAs and brokers? Simple really. When ride-sharing electric vehicles becomes the norm for urban transport, then insurance will be bought at the POS, no shopping around, no comparison sites, no broker offers. Just plug in and go – tap the app.

“For us, 2020 will be a year of dramatic growth,” says Philipp Reth, Chief Executive Officer (CEO) of WeShare. “We are convinced that all-electric free-floating car sharing will be a significant, scalable transitional element in the field of sustainable, shared mobility for a considerable time on the way to automated transport systems,” Reth adds.

Before you dismiss this statement as some kind of climate change PR spin, consider the reality that the EU faces post-Brexit. A big hole in its budget. How will it plug that billion euro hole? With green taxes of course, especially taxation on movement; commuting, leisure, shopping, parcel delivery.

Now the way to duck some of those taxes will be the use pure electric cars – for a few years anyway. However those EV cars will probably have very low residual values – battery swaps at 7 years, rapidly outdated tech superceded by newer models etc – so many consumers will wisely choose to lease, or ride-share to work.

What you want is one simple, Pay-per-Mile hire fee; car, city centre access charge, battery charge and insurance, all wrapped up in one easy-to-navigate app on your mobile. It really means things are likely to get tough for those insurers who are NOT partners with major car manufacturs.

PRIVATE SPACES FOR WEALTHIER COMMUTERS

“We therefore hope that will receive support from the cities for example in the area of parking charges for car sharing vehicles or the designation of new car sharing areas in public spaces with a view to providing incentives for potential users and making car sharing even more interesting and relevant,” says WeShare’s Reth.

What will that mean in practice? The most convenient parking bays, near the Malls and main business ares within cities. Free parking for shoppers and commuters. Meanwhile those still clinging onto the idea of owning their petrol/hybrid car will probably face extra tolls and ULEZ taxes. Maybe even city-wide bans, as proposed recently in Bristol.

AH, BUT THERE’S NO INFRASTRUCTURE – IS THERE?

Not yet. But here’s more from VW/WeShare;

One of the major challenges faced by WeShare in Berlin is battery charging. To compensate for the inadequate availability of public charging infrastructure, Volkswagen AG and WeShare have therefore started cooperation with the Schwarz Group. Schwarz is currently installing a total of 140 public charging stations at 60 Lidl and 10 Kaufland locations in Berlin.

As a cooperation partner, WeShare can use the charging stations for its car sharing fleet on an exclusive basis outside the opening hours of the stores. During opening hours in the daytime, the charging stations are available to all customers of Lidl and Kaufland. In addition to the Schwarz Group, WeShare plans to establish further partnerships with a view to expanding the available infrastructure.

Expect to see a charging network based at supermarkets, retail malls such as Bicester Village, Trafford Centre, Bluewater, Cheshire Oaks etc and privately owned, secure spaces. The future of commuting and leisure looks like being segregated between the haves vs the have nots, when it comes to pure electric vehicles. Those who have cash to spend will be welcomed at the privately owned charging bays. Those who are poor, may wish to order their food from Just Eat, and scrap their car.

The insurance industry needs to work hard to maintain a genuinely competitive car insurance market. The danger is that big players in car making will select big players in insurance, and many smaller MGAs, brokers and insurers, could well find themselves frozen out of the PPM ridesharing market.

It’s going to be a tough battle by the end of the roaring 20s.