White Paper

How Car Sharing and

the IoT Will Disrupt Car
Ownership Models
A SIERRA WIRELESS WHITE PAPER

New mobility services are redefining car ownership and car usage patterns. Ride
sharing, car sharing, bicycle/scooter sharing and even shared parking are disrupting
traditional business models. Urbanization has been a significant factor in the growth
of alternative mobility services. According to the United Nations, 70% of the world’s
population will be living in cities by 2050.
For municipal governments, this means adopting strategies to cope with increased
congestion and pollution. It’s no surprise that improved public transportation is high on
their list.
Public transit authorities recognize that in order to use transit, commuters must first
get to transit centers; they know they must broaden the appeal of public transit by
offering convenient options for getting to and from metro, train or bus stations. It’s
impractical to extend transit infrastructures to every neighborhood, so larger, denser
cities are turning to public car sharing services as a cost-effective means of alleviating
the first mile/last mile challenge.
Concurrent with this trend, urban car owners are realizing how infrequently they use
their cars. For consumers whose cars sit idle for 95% - 98% of the time, owning a
car is not the most cost-effective means to drive it. Furthermore, once cities deploy
intermodal transit options such as car sharing, and bicycle/scooter sharing, there is
even less incentive for full time vehicle ownership.
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Reservation system
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transportation on
FPO 3 min the smartphone.

15 min
€ 12

7 min
Arrival Station

Small electric
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for last-mile
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Departure Station Parking

for vehicles.

Figure 1: The Intermodal Mobility Journey

The New Sharing Economy

Disruptive new businesses such as Uber and Airbnb have acclimated consumers to
the sharing economy. McKinsey & Company expect as many as one in ten new cars
sold in 2030 to be used as shared vehicles, while Frost and & Sullivan expect the global
car sharing market to increase from 7M members and 112K cars in 2015 to 36M
members and 427K cars in 2025. Densely populated cities are already seeing healthy
competition from multiple car sharing services.
There are currently three major business models for car sharing services:
• PUBLIC
Public/private partnerships between transit authorities and companies that
provide the application, vehicles, and administration. The transit authority may
subsidize start-up and operational costs for a period of time.
• COMMERCIAL
Dedicated car sharing businesses with their own solutions and fleets. Typically
subsidiaries of car manufacturers or car rental/leasing companies.
• PEER-TO-PEER
A car sharing service without actual inventory; their fleets comprise vehicles
whose owners earn extra revenue by listing their cars with the service. The P2P
service installs the telematics that enable car sharing, manages the application
platform for booking and tracking cars, and obtains vehicle insurance which hands
over driver responsibility.
Usage models for car sharing depend on how much flexibility the car sharing solution
allows. The most common usage models are round trip, where drivers must pick

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up and return cars to the same designated location; one way, where drivers are
able to pick up cars at one location and return to different designated location; and
free-floating, where drivers can pick up and drop off cars anywhere within a set
geographical area.
Free-floating is the most technically advanced usage model and also the most
convenient, which will accelerate the car sharing usage adoption.
There are numerous players in this new market. For automobile manufacturers,
car sharing represents an immediate threat in lost sales to consumers as well as
customers such as taxis and rental companies. Yet they are also well-positioned to
compete in the new sharing economy. Some car manufacturers are responding by
launching commercial car sharing businesses; some are also offering cars with factory-
installed ‘sharing-ready’ telematics for purchase by car sharing companies. There are
also providers of after-market car sharing solutions for converting existing fleets.
Regardless of business model, car sharing solutions must handle a variety of
processes, all of which require fully connected cars. Customers must be able to locate,
book, and access the car of their choice at any time of day.
• BOOKING
Customers must be able to locate an available car and book it.
• AUTHENTICATION
The application’s booking portal must authenticate the customer, validate car
availability, and then provide the customer with a temporary virtual “car key.”
• ACCESS
The application must transmit booking information to the car’s on-board
telematics, which receives data commands that unlock the vehicle’s immobiliser
and grant keyless entry to the right customer at the right time.

GPS Tracking CAR SHARING SYSTEM

“
Our old equipment had some characteristics that
impacted our business model ... our cars were
Car Tracking
limited to parking only in sites where there was
a strong to medium GSM signal.”
Mother Server

Bernardo Nunes Mazzini

CTO of Zazcar

On Spot Booking Member Booking

Parking
for vehicles.

Figure 2: The different connected pieces of a car sharing solution

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All this adds up to requirements for ubiquitous, highly secure, business-critical

connectivity. Anything less creates difficulties for the customer as well as the company.

Connectivity Challenges for Next-Gen Mobility

Services
A car sharing solution must deliver seamless, global coverage in all countries where the
company desires market presence. Companies need solutions that guarantee the most
resilient connectivity available when vehicles travel across different coverage areas and

“
With Sierra Wireless smart SIM supporting multi-
network types.
SEAMLESS BUSINESS-CRITICAL CONNECTIVITY
operators connectivity, Invers has been able to
Shared cars should remain connected at all times, whether they are moving through
offer the “always-on” technology to car sharing
tunnels, urban canyons, or parked in underground garages. If negligent customers
customers.”
leave cars in cellular blind spots outside service-designated areas, the company incurs
Alexander Kirn the cost of sending staff to find the car and drive it back to a viable location. While a
CEO of Invers car is out of contact, the service loses out on revenue opportunities since the vehicle
is unable to send or receive information. Furthermore, signal loss could mean slow
response to emergencies, accidents, or theft.
Yet seamless connectivity can be complicated if a single solution must support global
as well as local mobile network connectivity. SIMs from local Mobile Network
Operators (MNO) can only provide coverage in a restricted area, while roaming SIMs
always try and default to their “home” network’s partner. Some roaming SIMs will
attempt reconnection to their network partner for up to 30 minutes before selecting an
alternate network.
Solution providers can overcome these challenges by adopting smart SIMs which hold
multiple operator agreements to enable seamless transitions across network
boundaries. This approach offers economies of scale, access to more networks than
any single roaming device, and the widest possible coverage area – a requirement for

“
solutions that support free floating shared cars.

With Sierra Wireless modules, VuLog has been

COMPATIBILITY AS NETWORKS EVOLVE
able to design the innovative VuBox 5, which can With a user population that streams video and accesses media-rich apps on
support a wide range of bearers, from 2G to 3G smartphones, mobile network operators around the world are upgrading their
and 4G LTE.” infrastructures to meet bandwidth and broadband capacity demands. 2G networks
Georges Gallais
are shutting down, soon to be followed by 3G. This presents a challenge for car
Strategy & Innovation VP sharing companies who want their technology and fleet investments to yield the best
VuLog possible TCO over long vehicle life cycles. Their solutions must get to market quickly yet
maintain compatibility for as long as possible as mobile networks transition.
For a scalable solution, design telematics boxes with cellular modules which can
support 2G, 3G or 4G technologies without impacting the design. With Sierra Wireless
Common Flexible Form Factor (CF3), modules keep the same pin out and interface
from 2G to 3G and 4G variants.
For fast time-to-market, select pre-certified, pre-integrated SIMs that come loaded
with a development framework and tools that simplify integration, deployment, and

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management. To maintain compatibility with evolving cellular network infrastructures,

LTE is the most logical technology choice. LTE-based solutions will switch easily
between 2G, 3G, and 4G without requiring companies to change SIMs, a benefit that
contributes to a low TCO.
For a future proof solution, select a system compliant with the eUICC standard, which
allows downloading and activating new network operator profiles without making any
physical changes to the SIM.
By deploying an IoT-centric management platform and eUICC-compliant SIMs, car
sharing companies can have the assurance that they won’t get locked in to a single
MNO. Companies can further improve business flexibility by partnering with a mobile
virtual network operator (MVNO) instead of trying to negotiate agreements with
multiple MNOs. They would benefit from simpler management and enjoy total
flexibility to switch between MNOs and MVNOs.
CONNECTIVITY AND BUSINESS FLEXIBILITY
The car sharing industry is still maturing. Business models could change and new
vehicle usage models come to market. A major benefit of the IoT is that it simplifies
data collection and consolidation. Car sharing companies can analyse data from drivers
and cars, identify trends in customer requirements, and respond with new offerings.
Yet if they are to move quickly and capitalize on new business opportunities,
companies must implement efficient, flexible connectivity and device management
solutions.
For ease-of-deployment and scalability, choose fully-integrated IoT platforms that
provide: end-to-end security, operator-neutral SIM management, network subscription
management, over-the-air updates, and flexibility to select the most appropriate mix
between CAPEX and OPEX to match revenue streams.

Sierra Wireless Simplifies Car Sharing Operations

Sierra Wireless has delivered wireless solutions to the automotive and transportation
industry for more than 15 years. As the leading provider of automotive cellular
modules, we understand the challenges of integrating vehicle telematics applications.
That’s why we offer an integrated portfolio that simplifies solution development,
deployment, and management. Our technology and services range from modules,
gateways, and managed connectivity services to MVNE (mobile virtual network
enabler) and full MVNO capabilities.
The Sierra Wireless Smart SIM is uniquely suited to the needs of car sharing companies
and solution providers. The patented applet on board the SIM features a ‘smart
steering’ functionality which automatically scans available networks to attach to the
best possible network, as defined by configurable QoS parameters, not just signal
availability. Pre-certified with major network providers, enabled for multi-operator
coverage, and eUICC-compliant for remote provisioning, the Smart SIM delivers robust,
seamless connectivity across cellular boundaries and network types.

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“
The complexity of deploying IoT solutions is the
biggest challenge for businesses today. Our new
technology is much more than a SIM in a device,
it’s an industry breakthrough that truly simplifies
the IoT ecosystem.”
Philippe Guillemette
CTO, Sierra Wireless
White Paper
All Sierra Wireless modules are easy to integrate and configure. Designed to support
the end-to-end complexities of the IoT, our modules come with an application
framework based on Legato Linux, and are pre-integrated with our IoT Acceleration
platform for device management.
Furthermore, as a global Mobile Core Network Infrastructure Operator (full-MVNO),
Sierra Wireless is in a unique position to offer car sharing companies operator-
independent connectivity services worldwide. Our solution eliminates the need to
source multiple MNOs, SIMs, connectivity agreements, and platforms. Car sharing
companies can deploy with confidence, knowing they have the flexibility to insure
against being locked into unfavorable agreements.
Sierra Wireless continues leading the industry with innovations that accelerate the
global IoT economy. In February 2017, we announced the world’s first ‘plug-and-play’
cellular modules and routers with pre-integrated global connectivity, IoT operation
management and security. These new cellular modules and routers enable customers
to select a single pre-certified solution and connect instantly to manage a fleet of IoT
products and services. This vastly simplifies the current practice of sourcing multiple
connectivity subscriptions and SIM cards for global coverage, then integrating disparate
provisioning and management platforms. This ‘plug and play’ functionality enables new
business models balancing CAPEX and OPEX to match revenue streams.
Sierra Wireless offers car sharing companies more advantages than any other
wireless technology vendor when it comes to streamlining integration with the IoT.
We let companies and solution providers focus on their business by removing the
complexities of connectivity.
Summary
The car sharing market is attracting both new players and those from traditional
automotive sectors. Public transit authorities regard car sharing as part of an
intermodal transportation strategy while commercial car sharing businesses see global
opportunities. The challenges of bringing vehicles into the IoT can slow down time-to-
market and affect smooth operations.
• Car sharing companies need cars that are fully connected at all times. For 24 x 7
tracking and allowing customers to book cars and obtain keyless entry any hour of
the day or night, they need to select wireless technologies that deliver seamless,
business-critical connectivity.
• Vehicle fleets have life cycles of several years, during which cellular networks
and subscription options will have changed. For best TCO, implement with LTE
modules, which are backwards-compatible with 2G/3G and will maintain network
compatibility as networks evolve to 4G.
• To insure against being locked into unfavorable network agreements, companies
should deploy with eUICC-compliant SIMs that are pre-certified with major
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network providers. This delivers the advantage of being able to switch network
providers without having to change SIMs, allowing faster responses to changes in
their market.
• For business flexibility, a fully-integrated end-to-end device-to-cloud
management platform is essential, not just for cost-effective connectivity
management but also for delivering competitive new features over-the-air to
vehicles in the field.
The car sharing market is maturing, with potential for further change and disruption. By
working with Sierra Wireless as a technology supplier, managed service provider, and
MVNO, companies can be sure of deploying with the most flexible technologies and
services available for the IoT.

RESOURCES
Urban growth: United Nations Department of Economic and Social Affairs
Private car usage: Fortune: Today’s Cars Are Parked 95% of the Time
10% of new cars sold in 2030 will be shared: 8 Disruptive Trends Shaping the Auto
Industry of 2030
Frost & Sullivan: Future of Carsharing Market to 2025

About Sierra Wireless

Sierra Wireless is building the Internet of Things with intelligent wireless solutions that empower organizations to innovate in the
connected world. We offer the industry’s most comprehensive portfolio of 2G, 3G, and 4G embedded modules and gateways,
seamlessly integrated with our secure cloud and connectivity services. OEMs and enterprises worldwide trust our innovative
solutions to get their connected products and services to market faster. Sierra Wireless has more than 950 employees globally and
operates R&D centers in North America, Europe, and Asia.
For more information, visit www.sierrawireless.com.

Sierra Wireless, the Sierra Wireless logo, AirPrime, AirLink, AirVantage and the red wave design are trademarks of Sierra Wireless. Other registered trademarks
that appear on this brochure are the property of the respective owners. © 2017 Sierra Wireless, Inc. 2017.04.05