This week we caught up with Richárd Sáreczky, the Managing Director of MOL Limo, a free-floating carsharing service located in Budapest, Hungary, to learn about how one of Europe’s largest integrated oil and gas companies (MOL Group) decided to dive into the business of shared mobility.
Well, as you know we are an integrated Oil & Gas company and though fuel consumption is still expected to grow in CEE in the next five years, and we are in fact still in a good position, our long-term 2030 strategy states that we believe that fossil fuels will no longer play a monopolistic role in transportation by the end of the next decade. This is why one of the growth areas where we see a big potential is the transformation of our retail operations. By building on our 10 million customer base, we aim to become a 360º consumer goods and services provider and shared mobility is a very important arm of our strategy.
We made the first step a few years ago when we launched our bikesharing scheme, MOL Bubi, but now we can really see that the sharing economy is gaining momentum, specifically in our region. The total value of sharing economy was USD 15bn in 2014 and it is expected to reach USD 335bn by 2025. Importantly, carsharing has produced double-digit growth in recent years so the potential is huge.
Looking at consumer patterns, the importance of car ownership is diminishing, especially among millennials. Add to this growing environmental consciousness and more and more stringent regulations related to car traffic in cities. On top of that, consumers are increasingly under time pressure and are looking for convenient solutions. This is why we thought – why shouldn’t it be MOL to address these needs?
Of course making our MOL Limo idea become a reality was a challenging process, but in the end I consider the project very successful. Since the idea first came up, it took us slightly over one year to launch the service, so it required a lot of effort from our colleagues to make it happen in such a short time.
Carsharing was also a relatively new concept for the Budapest Municipality, so the negotiation process was quite challenging.
Having electric cars in the MOL Limo fleet was actually quite a natural step for us. In the long run, we aim to become a leader in alternative fuels, including electricity. As we want to gradually ramp-up our capabilities in this area, it was a great testing ground for us. We also saw it as a good way to make the first step in shifting the image of MOL away from a traditional fuel retailer to a shared mobility provider.
Also, if you consider changing customer habits and their increasing preference for eco-friendly solutions, an EV fleet is a really great fit. MOL Limo also gives an opportunity to try out an electric vehicle; there are lots of people, especially in our region, who have never driven an EV but are very interested to do so.
However, this is not our only initiative in the e-mobility arena. We already have some EV chargers in Hungary and Romania and in the next few years, we will significantly increase their number, partially as part of the Next-E consortium. Altogether, we will install with the Next-E partners 252 chargers along main highways, with a major portion located in MOL Group’s network.
Nowadays, convenience is a critical factor for attracting and keeping customers. A free-floating model, which we chose for our MOL Limo service, gives much greater flexibility for customers. Obviously, the logistics of the free-floating model is much more complex, but we wanted to give the customers exactly what they need – convenience and hassle-free travel.
From the very first days since MOL Limo was launched the reaction of customers was great and to be honest, it has by far exceeded our expectations. The numbers speak for themselves: so far, we’ve had over 40,000 registrations and we reached 5 million minutes already traveled. Every day, around 1,500 people regularly use our carsharing service, which we consider a huge success.
From the financial standpoint, as with all our investments we expect financial returns, but we don’t consider mobility an immediate cash generation opportunity. The global mobility services market is expected to increase by 50 times in 15 years so entering the carsharing scene has a major long-term potential for us.
Last but not least, we are a power brand in our region with a strong reputation in fuel sales. We think that once we connect the MOL brand and carsharing in customers’ minds, we will be able to achieve real competitive advantages in mobility services as well.