Shared economy business models: their value to the future of automotive manufacturers

While the 20th century represented the era of individual car ownership, the 21st century seems to disrupt this inherited system. The new mobility trend prioritises access over ownership, meaning that users get access to a mobility service instead of having a private vehicle. These practices are called car-sharing and carpooling. The main motivations for car-sharing include cost savings for users, reducing carbon emissions, recirculation of goods, increased utilisation of durable assets, and exchange of services. This incoming mobility system is based on an economic system known as the 'shared economy'. The shared economy has social interactions at its core, integrating activities such as renting, trading, swapping, and borrowing. According to Allied Market Research(R) (2023), the shared economy market size could grow from US$387.1 billion in 2022 to around US$827.1 billion by 2032. This economic model projects such growth as it offers more affordable solutions for consumers than traditional models do, also technological solutions such as digital platforms enhance accessibility to this model which often is aligned with consumers' sustainability principles.

Social capital is seen as the foundation of the shared economy. However, current shared economies rely on digital platforms to enable access to their system, the opposite of what defines social capital. While there is no commonly adopted mechanism to regulate the shared economy, some authors state that strict regulations could be a barrier to its growth. Despite most research on the shared economy in the automotive industry being focused on car-sharing offered by mobility providers, there are services, such as pay-as-you-go insurance, self-charging, and self-driving, that are enabling services of this mobility system and could play an important role in automotive manufacturers to keep competitiveness in the new shared economy.

The aim of this PhD is to provide an approach for evaluating the opportunities that the shared economy could bring to automotive manufacturers. We hypothesise that embracing a shared economy business model will increase automotive manufacturers' social sustainability rankings, whilst maintaining their competitiveness.

To achieve this aim the following specific overarching objectives have been identified.
1. Identify the opportunities and barriers to automotive manufacturers for increasing the use of a shared economy business model.
2. Define the elements/levers that will influence such a model.
3. Create a shared economy business model for automotive manufacturers.
4. Determine the role of digital adoption on the successful uptake of a shared economy business model.
5. Evaluate the approach via industry studies.

This PhD is in partnership with the Advanced Automotive Propulsion Systems CDT and the MSI: Centre for People-Led Digitalisation, both funded by the EPSRC. This project is aligned with the EPSRC's digital economy research area and the digital futures strategic priority.

The research methodology will be mixed (quantitative and qualitative), while the methods will include surveys, interviews, and case studies.

Impact Summary

This proposal has been developed from the ground up to guarantee the highest level of impact. The two principal routes towards impact are via the graduates that we train and by the embedding of the research that is undertaken into commercial activity. The impact will have a significant commercial value through addressing skills requirements and providing technical solutions for the automotive industry - a key sector for the UK economy.

The graduates that emerge from our CDT (at least 84 people) will be transformative in two distinct ways. The first is a technical route and the second is cultural.

In a technical role, their deep subject matter expertise across all of the key topics needed as the industry transitions to a more sustainable future. This expertise is made much more accessible and applicable by their broad understanding of the engineering and commercial context in which they work. They will have all of the right competencies to ensure that they can achieve a very significant contribution to technologies and processes within the sector from the start of their careers, an impact that will grow over time. Importantly, this CDT is producing graduates in a highly skilled sector of the economy, leading to jobs that are £50,000 more productive per employee than average (i.e. more GVA). These graduates are in demand, as there are a lack of highly skilled engineers to undertake specialist automotive propulsion research and fill the estimated 5,000 job vacancies in the UK due to these skills shortages. Ultimately, the CDT will create a highly specialised and productive talent pipeline for the UK economy.

The route to impact through cultural change is perhaps of even more significance in the long term. Our cohort will be highly diverse, an outcome driven by our wide catchment in terms of academic background, giving them a 'diversity edge'. The cultural change that is enabled by this powerful cohort will have a profound impact, facilitating a move away from 'business as usual'.

The research outputs of the CDT will have impact in two important fields - the products produced and processes used within the indsutry. The academic team leading and operating this CDT have a long track record of generating impact through the application of their research outputs to industrially relevant problems. This understanding is embodied in the design of our CDT and has already begun in the definition of the training programmes and research themes that will meet the future needs of our industry and international partners. Exchange of people is the surest way to achieve lasting and deep exchange of expertise and ideas. The students will undertake placements at the collaborating companies and will lead to employment of the graduates in partner companies.

The CDT is an integral part of the IAAPS initiative. The IAAPS Business Case highlights the need to develop and train suitably skilled and qualified engineers in order to achieve, over the first five years of IAAPS' operations, an additional £70 million research and innovation expenditure, creating an additional turnover of £800 million for the automotive sector, £221 million in GVA and 1,900 new highly productive jobs.

The CDT is designed to deliver transformational impact for our industrial partners and the automotive sector in general. The impact is wider than this, since the products and services that our partners produce have a fundamental part to play in the way we organise our lives in a modern society. The impact on the developing world is even more profound. The rush to mobility across the developing world, the increasing spending power of a growing global middle class, the move to more urban living and the increasingly urgent threat of climate change combine to make the impact of the work we do directly relevant to more people than ever before. This CDT can help change the world by effecting the change that needs to happen in our industry.