Utilisation And The Motor Car


Just recently I've been spending a lot of the time up in the air. That is to say, I've been on board commercial aircraft, as opposed to practicing the art of levitation.

The modern aircraft and airline is a perfect example of a business squeezing every last drop of value out of an expensive asset. On the ground turnaround times have become shorter as loading processes and turnaround procedures have become slicker.

Companies have refocused on their key business truth: airplanes on the ground aren't earning money.

As consumers we have a very specific set of high utilisation devices - for most people a smartphone and possibly a tablet, from which we derive a pretty good return against the purchase price.

We also have one asset which gets very little use at all and it's one of the most expensive assets we'll acquire. Our cars.

In terms of utilisation owning a car makes little or no sense. Most people commute in their cars and then don't go out in them again during the working week. We might use our cars a little bit more at the weekends, but generally each and every one of us owns a vehicle which spends 75% of its time doing nothing to earn its hefty upkeep.

If we replace our cars on a three yearly basis the costs are eye-opening. The small family car costs around £20,000 to buy, losing half of that in depreciation. Road tax and maintenance will add another £2,000 to that and insurance another £3,000. With an average usage 12,000 miles per annum costing another £9,000, the average owner is spending over £8,000 a year just to own a car.

One that spends most of its time idle.

Here is where the quality of mass transit systems makes a real difference to people's lives. In a city like London with excellent tube, bus, rail and water links getting around the City without a car is a breeze. Other capital cities (in Europe at least) offer a similarly fluid experience.

For those times when you must have a car taxis or short term hire easily fills the gap.  And the combined cost is likely to be a significant chunk cheaper than running a car.

For years now we have been listening to concerns about the impact of growing wealth in highly populated developing nations - arising from massive increases in motor vehicle ownership. I would suggest that, together with the rapid urbanisation of the peoples of these countries, planned investment in quality mass transit systems would prevent those worries from ever eventuating.

In the Western World we have decades of bad habits to unlearn and looking to improve the quality, availability, reliability and value in public transport systems would be an important step in achieving this.

In the meantime Google, Uber and now Apple have identified an opportunity to deliver a paradigm shift in vehicle utilisation and ownership. The cost of a taxi service is significantly reduced if the driver is removed from the equation. A self driving car which arrives when you need it and charges you only when you use it promises to disrupt our lives in ways that go beyond just car ownership.

Turns out high utilisation is just as beneficial on the ground as in the air.

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