We discussed their shared mobility journey with Richárd Sáreczky, the Managing Director of MOL Limo, a free-floating carsharing service located in Budapest, Hungary.
BUDAPEST. July 10, 2019 In this edition of the Shared Journey, we learn about how one of Europe’s largest integrated oil and gas companies (MOLGroup) decided to dive into the business of shared mobility.
Why did you choose to launch a carsharing service?
As you know, we are an integrated Oil & Gas company. Though fuel consumption expects to grow in CEE in the next five years – and we are 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 the immense 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 significant arm of our strategy.
We made the first step a few years ago when we launched our bike-sharing scheme, MOL Bubi, but now we can see that the sharing economy is gaining momentum, specifically in our region. The total value of sharing economy was USD 15bn in 2014 and expects to reach USD 335bn by 2025. Importantly, carsharing has produced double-digit growth in recent years, so the potential is enormous.
Looking at consumer patterns, the importance of car ownership is diminishing, especially among millennials. Add to this growing environmental consciousness 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?
Can you talk about the challenges faced when launching such a service? And within the different municipalities/areas in Budapest?
Of course, making our MOL Limo idea become a reality was a challenging process, but in the end, I believe the project was very successful. Since the idea first came up, it took us slightly over one year to launch the service, so our colleagues required a lot of effort to make it happen in such a short time.
Carsharing was also a relatively new concept for the Budapest district, so the negotiation process was quite challenging.
Tell us about your choice to use electric cars.
Having electric cars in the MOL Limo fleet was a natural step for us. We aim to become a leader in alternative fuels, including electricity, in the long run. As we want to ramp up our capabilities in this area gradually, it was a great testing ground for us.
We also saw it as an excellent way to make the first step in shifting the image of MOL away from a traditional fuel retailer to a shared mobility provider. It also helps normalize carsharing in Budapest.
Also, if you consider changing customer habits and their increasing preference for eco-friendly solutions, an EV fleet is a great fit. MOL Limo also allows trying out an electric vehicle; many people, especially in our region, have never driven an EV but are very interested in doing so.
However, this is not our only initiative in the electric 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 significant portion located in MOL Group’s network.
Why did you launch a free-floating service instead of another type of service (round trip, etc.)?
Nowadays, convenience is a critical factor in attracting and keeping customers. A free-floating model, which we chose for our MOL Limo service, gives much greater flexibility to customers. The logistics of the free-floating model are much more complex, but we wanted to provide customers with precisely what they need – convenience and hassle-free travel.
How will you measure success at the end of your first year of service?
From the very first days since the launch of MOL Limo, the reaction of customers was great, and to be honest, it has by far exceeded our expectations. The numbers speak for themselves: we’ve had over 40,000 registrations and reached 5 million minutes already traveled. Every day, around 1,500 people regularly use our carsharing service in Budapest, which we consider a huge success.
As with all our investments, we expect financial returns from an economic standpoint, but we don’t consider mobility an immediate cash generation opportunity. The global mobility services market intends to increase by 50 times in 15 years, so entering the carsharing scene has significant long-term potential.
Last but not least, we are a power brand in our region with a strong reputation for 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.
Vulog, the world’s leading tech mobility provider, is proud to power MOL Limo, a free-floating carsharing service in Budapest, Hungary.