Oil Endgame 2: Creative Business Models
AEman's going to let the RMI folks carry the day on this one, as they are quite adept as describing transitions from made-things models to doing-things models: manufacturing vs. services-centric economies. Here they do it again, with the auto industry. The propulsive points for AE are self evident, and the last sentence hits close to home once again:
Perhaps the greatest peril, though it’s only starting to emerge on the
fringes of automobility, is transformation of the business model.
Traditionally, automakers sell vehicles and oil companies sell gallons. Both
want to sell more, while customers prefer on the whole to buy fewer (but more
physically and stylistically durable) vehicles that use fewer gallons. These
opposite interests don’t create a happy relationship. But suppose an
automaker or an oil company leased a mobility service that
provides vehicles or other means of physical or virtual mobility, tailored to
customers’ ever-shifting needs. Customers would pay for getting where
they want to be, not for the means of doing so. Then vehicles and
gallons, instead of being the providers’ source of profit, turn into a cost:
the fewer vehicles and gallons it takes to provide the mobility service that
the customer is paying for, the more profit the provider makes and the
more money the customer saves. Most major car and oil companies are
thinking quietly but seriously about this business model. Most industry
strategists fear that the first firm to adopt it on a large scale could
outcompete all the rest, both because of a better value proposition and
because aligning producers’ with customers’ interests tends to yield better
outcomes for both. There is no guarantee that such transformative business
models will start in America.
posted by Andy Bochman at 10:18 PM
 
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