Elon Musk suggested recently that in twenty years’ time owning a car will be like owning a horse – something people will only do for sentimental reasons. New web-enabled car sharing models it seems are set to take over. The car sharing market is currently estimated at $1.1bn and is set to grow over the next ten years by over 400%.
Josh Darling, co-founder of Orto is attempting to catch a portion of that market offering co-leasing opportunities for petrol heads who want to experience a luxury sports car but don’t want the headaches and costs associated with ownership or sole leasing.
The opportunity is to co-lease with three other users each getting 85 days usage. Clients book their days online, and all aspects of delivery, cleaning, servicing, maintaining, repairing and insuring the cars are managed for you. Orto deal with everything for a single monthly fee.
Orto are in start-up phase and have proved their concept signing up a number of clients quickly. They are now targeting an additional 176 customers (44 cars) over the next twelve months, and forecast that the total European market could be as large as £1.88bn.
Clients might pay £1,999 deposit and 23 payments of £399 for one quarter use of a car which would cost £35,000 to lease alone.
Orto provides an interesting example of the changes which are faced by the auto finance industry. They are another example of the emergence of businesses offering to efficiently manage the shared use of an asset online. So in that respect they are comparable to Airbnb and others. They are riding a consumer trend towards usage rather than ownership; and are offering to serve a niche market to meet a very millennial style of desire – to get to know a sports car without the pain of ownership and all that this entails.
The proof of the concept may well lie in their ability to persuade customers that their model has significant advantages over sole leasing on one side, and car clubs on the other. But this successful start-up is surely an example of the sorts of competition and opportunities which are likely to emerge for the industry over the next few years.
In twenty years' time owning a car will be like owning a horse – something people will only do for sentimental reasons.