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10 June 2019

GM pulls back on Maven, casting doubt on ‘AirBnb for cars’

General Motors is pulling its Maven mobility service from eight US cities, including Boston, Chicago, and New York, leaving it with just nine active regions. It’s not a good look for Maven, which was meant to be a trailblazer in showing the world the value of new mobility-focused services. GM’s Cruise seems to be living up to its hype, but the vehicle rental offering at the heart of Maven seems to have missed out in a big way.

Maven has a number of rental rivals. Daimler took a similar angle, with its car2go subsidiary, but Getaround and Zipcar are independent of an automaker. There’s no shortage of such services, but when a company as influential as GM can’t make it work, things don’t look too good for the crop of start-ups hoping to make it big in the sector. Ford has cancelled its Chariot service too, and as Maven’s then-CEO Julia Steyn left GM in January, perhaps GM could see that the writing was on the wall.

So then, are these future-of-mobility experiments by the automakers simply expensive but necessary learning experiences, or are they signs of companies that are flinging ideas and the wall and desperately looking for the one that sticks, amid financial difficulties? Perhaps, but there are strong arguments to be made that it was clear that trying to reinvent these wheels before all new cars are sold with even a basic connectivity package was a poor strategic decision. GM seemed to hit the nail on the head with its investment in Lyft and its acquisition of Cruise, so perhaps two-out-of-three ain’t so bad.

But this retreat raises questions about the viability of the whole concept of ‘mobility’ – using the best combination of transport to complete a trip, whether that’s a private car, a pooled bus, or an electric scooter. While bikes and scooters have been criticized for cluttering up pavements, discarded by their drivers at the end of a trip, or kicked over and thrown in hedges by others, ridesharing fleets have come under fire for being responsible for a surge in air pollution – because the affordability of the ride means people are using cars when they would have used less carbon-intensive means before.

There’s a definite air of sliding expectations and heightened skepticism in this area. Uber’s IPO is indicative of this, with the firm settling for a valuation of around $68bn, instead of its lofty hope of $100bn, and while Waymo is firing up its autonomous taxi service, most expectations put self-driving at scale nearer the end of the next decade, rather than its beginning.

Indeed, if the recent data on the impact of these car-based services is accurate and applicable to most cities, then the automakers are going to have to push for electrification much more emphatically – though, of course, producing new cars still incurs the carbon footprint inherited from production, lest we not forget.

As many ridesharing and mobility firms have been founded on the premise that they offer reduced carbon emissions, if a wave of new data shows that this is not the case, then investment is going to dry up rather quickly. It’s one thing to struggle to profitably; as long as you are growing, then investors will often remain confident. It’s another entirely to struggle for profit and have an emissions-based sword of Damocles hanging above your head.

But it does seem clear that there are too many start-ups in this sector, at least those with global ambitions. In most markets, a handful of large players with global reach would emerge, with the global market consolidating in time as firms go bust and get bought up. However, mobility seems likely to remain very fractured, especially along geographical lines. It could be one of the most balkanized sectors that falls under the IoT umbrella.

Maven launched in 2016, acting as a consolidation of GM’s previous mobility ideas, and often described as ‘Airbnb for cars’. Its initial focus was on car-sharing, wherein a GM owner could sign up and let others rent their car through the platform. The application allowed for booking, remote unlock and tracking, and more recently, Maven has launched its Maven Gig option, which is aimed more at short-term leases for use in ridesharing and delivery services.

For the car owner, it was a way to make some cash when they are not using the car. For GM, it was a way to take a 40% cut of that rental fee, with the owner taking the other 60%. GM was providing insurance coverage too, which was almost a prerequisite for this kind of service, and recommended that a Chevy Cruze sedan be priced at $7.25 per hour, or a Camaro at around $22.50 per hour.