Why Car Manufacturers Have Yet to Add Ride-Sharing as a Service to Their Infotainment Systems
The potential for integrating ride-sharing services into car infotainment systems has long been a topic of speculation and discussion. However, despite the widespread adoption of infotainment technology, major car manufacturers have so far failed to offer ride-sharing apps directly from their center consoles. Why is this the case, and what factors are stopping them from competing with ride-sharing giants like Uber and Lyft?
The Low Proportion of Ride-Sharing Drivers
One of the main reasons why car manufacturers have been hesitant to add ride-sharing services to their infotainment systems is the small proportion of car owners who actually become ride-sharing drivers. It has been estimated that only about 1 in every 200 cars ends up being used by rideshare drivers. Given this low percentage, investing millions of dollars into developing features specifically for such a niche market may seem like a waste of resources.
Reasons for Current Integrations
Several car manufacturers have already integrated technologies like Apple CarPlay and Android Auto into their infotainment systems. However, these integrations are often presented as convenience features rather than anticipated financial benefits. For instance, the Volkswagen Group, one of the largest global automakers, only initially added Apple CarPlay as an option, with no Android Auto available at any price point. This decision was likely driven by market competition and customer demand rather than the potential for ride-sharing partnerships.
The Challenges of Built-In Apps
Integrating ride-sharing apps into infotainment systems comes with several challenges. For instance, apps designed for infotainment systems are typically displayed on dash-mounted screens, making it difficult for passengers to maintain privacy. Additionally, regular software updates for these apps require the car to be connected to a dealership, which can be inconvenient for many drivers. In contrast, Tesla is the only automaker that supports over-the-air (OTA) updates, and even then, they are available exclusively for a few partner services like Spotify, due to the high likelihood of user engagement.
The Economics of Ride-Sharing
Another significant factor is the economic reality of the ride-sharing industry. Ride-sharing platforms like Uber and Lyft operate on rates that are often considered sub-economical. This means that even if car manufacturers were to offer competitive rates, they might not be able to compete effectively. Furthermore, since Uber and Lyft do not own their own vehicles, they rely on drivers to fund the costs of operating their cars, creating a dependence on willing but often financially strained individuals.
Drivers' High Turnover Rates
A study by MIT has shown that ride-sharing drivers have high turnover rates, with around 90% of drivers dropping out annually. This high attrition rate is driven by the fact that the majority of drivers are willing to go into personal debt to finance their vehicles. This model remains sustainable as long as there is a continuous supply of new drivers willing to take on this risk.
In conclusion, while the integration of ride-sharing services into car infotainment systems appears to be a logical step, it faces significant practical, economic, and market challenges. Car manufacturers are keenly aware of these factors and are likely to focus on more established and profitable ventures.