Management Consulting

The peer-to-peer (P2P) car sharing sector in the UK has faced significant challenges, leading to a dramatic reduction in the number of operational companies, from four to two in just one year. This decline can be attributed to various factors, including restricted access to investor capital due to an unfavorable macroeconomic environment, increased competition, and the emergence of innovative rental models from commercially owned fleets. A critical issue has been the rising costs and complexities associated with insurance, which have made it difficult for P2P operators to maintain profitability. One notable example is RideLink, which raised over £1 million in 2017 but shut down shortly thereafter, citing insurance losses as a primary reason for its failure. Similarly, easycarClub ceased operations in 2018 due to unsustainable insurance costs. The UK insurance market, initially supportive of the P2P model, has become increasingly cautious, with motor premiums rising by 25% from 2022 to 2023. This increase is driven by higher repair costs, longer repair times, and the growing complexity of vehicles, particularly electric ones. Additionally, the costs associated with writing off damaged vehicles have surged due to inflated secondhand market prices. To address these challenges, Aon emphasizes the need for P2P car sharing platforms to adopt exceptional risk management practices. This includes implementing additional checks to prevent misuse and leveraging technology, such as Aon Fleet Risk Intelligence, which provides actionable insights based on various data points. By fostering strong partnerships with insurers and proactively sharing data, P2P operators can improve their risk profiles and potentially negotiate better insurance terms. Moreover, Aon advocates for a focus on customer experience, emphasizing transparent pricing and justifiable costs to users. By combining effective risk management with superior service, P2P car sharing can fulfill its potential in the UK market, particularly as consumers become more environmentally conscious and businesses seek to enhance their employee benefits through car sharing partnerships. Aon positions itself as a partner to support the growth of mobility players, helping them navigate these challenges and make informed decisions to protect their assets and manage risks effectively.