Uber, Dealers and The Sharing Economy

Uber and Lyft are in the news on a weekly basis and it’s usually for the same reason. The two organizations face legal battles in cities large and small. The ride sharing companies have been involved in lawsuits for their right to drive in large areas such as Los Angeles, San Francisco and even Las Vegas. The narrative is often the same. Public transportation authorities, especially those involved in the taxi industry demand increased regulations for Uber and Lyft. According to public transit advocates, the two ride sharing companies don’t have the same level of required insurance and driver screening that is usually required for groups such as a public taxi service. Thus, on a local level, these ride sharing companies have gotten sued over and over. Their approach to their business is much like Tesla as they are willing to expand as far as they are legally allowed to go and then fight expansion in court.

The rise of Uber and Lyft are part of the rise of the so-called sharing economy. The idea is individuals own less things such as houses and cars and rent them out in some capacity to someone else. While a homeowner may rent out a room in their home, a car owner may offer rides from Uber and Lyft to a rising generation that some feel have a wreaking desire to own things. Eighty-six percent of those polled in recent study by PWC feel the sharing economy makes life more affordable, while 83 percent feel that it makes life more convenient. The same study also found 62 percent of those surveyed trust brands less today than they have previously. For dealers and automakers, what could the rise of the sharing economy mean?

It could be both a positive and negative. For example if a homeowner rents a room out in their home for $500 per month, then they could have more money for a new vehicle purchase or lease. However, by the same token if fewer consumers are opting to own a car and more are purchasing rides on Uber or Lyft, then there could be less car sales as fewer individuals are seeing the need for their own vehicle.

What is your viewpoint on Uber and Lyft? Are they a threat to dealers because they could reduce the number of vehicles on the road, or are they just an option for those who already use taxis? Finally, what impact will the sharing economy have on dealers during the next 5 years, positive or negative?