Vulog’s Q&A interview gives you exclusive insights and perspectives from leading industry players.
RUSSIA. March 21, 2018 We recently caught up with the founder of the Russian shared mobility analytics and research website, TrueSharing.ru, Yura Nikolaev to discuss the thriving carsharing market in Russia.
Tell us in a bit about the carsharing market in Russia and its key players?
The Russian carsharing market is growing at an extremely rapid pace. If you ask me to describe it in one word it would be – fascinating!
It is important to understand that the most active and developed region for carsharing is Moscow Agglomeration. Currently, in Moscow there are 14 carsharing operators, 10 of them entered the market in the last 8 months. The main operators are – BelkaCar, Delimobil, Youdrive and Yandex.Drive (which was launched this February). All of them are very strong and ambitious players that have their unique selling points.
It is hard to choose one leader, even though Yandex (often described as the Russian Google) is different from any other operator. Also, there are several smaller companies and regional players that we follow with great interest. Several companies have a presence in more than one Russian city.
Users seem to fall in love with carsharing. They become early adopters and evangelists. They are interested in everything that is happening in the industry and believe that they are an important part of the shared mobility movement.
Why do you think Russia is one of the fastest-growing carsharing markets in the world?
We think it is the fastest-growing market.
There are a few factors that influence the booming growth of the Russian market. First of all, it’s a low base effect – the first carsharing services were created more than 10 years ago.
However, carsharing in Russia didn’t really start to develop until 2015. Today, there is a good technical base and customer awareness. Russia is catching up at an amazing pace!
The second factor is a combination of congested roads, high parking prices, the ever-growing cost of maintaining a personal car, and the loyalty of city residents who are starting to understand the benefits of using carsharing services.
Last, but not least is the government’s strong support of both carsharing in general and companies in particular. Local authorities have shown strong approval for carsharing and it seems that they are doing everything they can to help this service grow as fast as possible.
What are the specifics of the Russian carsharing market?
The high pace of development, large home zones (even within one region), shortage of popular car models, shortage of quality equipment and software with good support, demand for premium car models, vandalism, and “black market” of accounts. This is only a small part of the contradictory features that make the industry interesting and sometimes even exciting.
Where do you see Russia’s carsharing market in 5 years?
We believe that after 5 years, carsharing services will be available in all Russian cities with a population of at least 1 million people and will start penetrating cities with a population of less than 500k.
In 5 years, the image of the carsharing operator will change a lot. Now they are just niche service providers, but in the future, they will become serious logistic and transportation companies. Operators definitely will test a number of related services like bikesharing, scootersharing, ridesharing, delivery, taxi, etc. We already see some pilot projects in those areas.
Many companies will leave the market in the next 12-18 months, even more, will try to enter it in the next 3 years. So, in 5 years we will see many new names.
In general, we distinguish two development scenarios:
– Decentralized, where many local and federal players compete for the user, forming an entrepreneurial environment;
– Centralized, where one federal player dominates the market with a share of at least 70% and sets the tone for the entire industry.
The first one seems more realistic, despite the fears of the market due to the launch of Yandex.drive.
Do you think that Russian operators are going to expand and launch their service in Europe? Do you think European operators would be able to adapt their service for the Russian market?
We definitely know that one Russian company is planning to enter the Eastern European market and that one European company is thinking about launching the service in Russia.
In my opinion, the decision to launch services in Europe is irrational for the Russian operator at this stage. Maybe it would make sense in 5-10 years, but right now our local market is not yet mature nor saturated. It has huge growth and revenue potential.
Regarding European operators, we believe that is possible and logical that European operators will try to enter the Russian market, but only through the acquisition of the local player. To do anything else is just too late or too risky.
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