General Motors in the US is renting used vehicles to self-employed drivers who work for ride-hailing companies Lyft and Uber to generate new revenue streams and boost residual values (RVs).
The supply of used vehicles is managed by Maven, General Motors’ vehicle mobility brand, and uses cars that have just been returned at the end of a lease or fleet deal.
According to GM Authority, Chevrolet models are currently being supplied, but this could expand to other brands in the General Motors stable.
Julia Steyn, General Motors vice president of urban mobility, said: ‘This is a very exciting new channel for us.
‘[Maven] grew very fast in the US because of the demand from drivers who drive on the ride-sharing networks. It allows us to significantly optimise our residual values and how we turn the vehicles in the market.’
The used car programme allows General Motors to respond to large increases in demand from the ride-hailing sector. In Chicago alone, there were 60,000 people who applied to drive on the Lyft platform, but did not have a car that qualified.
There are several benefits to focusing on used cars. Stock is immediately available; new, profitable revenue streams are created; and prices are kept low compared to new car offers to encourage drivers to sign up.
Although cars will generate additional revenue, the extensive use related to ride-hailing is likely to lead to an accelerated decline in value when cars eventually reached the used market. However, revenue generated by ride-hailing rentals is expected to exceed RV reductions.
The scheme is currently only available in the US and there are currently no plans to expand the used car scheme to Europe.
In Europe, Uber offers drivers access to cars through a number of car rental partners offering new cars. In the UK, these include Cabmate, Enterprise, Europcar, Openstart, PCO Rentals, Upfront and Zipcar.
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