How a new business model is transforming car travel

The greatest innovations can be invisible if we look ahead for them, but indispensible once we have them. The internet is perhaps the clearest modern example. And as Forum for the Future unveils its new strategy to focus on innovation at the system level, it is quite reasonable to ask what this might mean in practice. So without further ado here is an example.

In the last century I owned a car. I used it to go to the supermarket, away for weekends, sometimes on business trips, covering perhaps 4,000 miles a year. In between, for weeks at a time, my car sat gathering dust, leaves and dents. It was old and I spent thousands on repairs. I bought a newer one and lost thousands on depreciation and insurance. I would often try to think up reasons for using it to try and justify the expense.

Fast forward to 2011. I still go away for weekends, even if my business trips are by train and the shopping by internet. I still need a car, because now I have a young family and all the clutter that entails but I’ve cut out those gratuitous trips. My car is bigger, but being the latest hybrid emits half the CO2. I have no tax, insurance or maintenance to think about, and it costs me around half what I used to spend - a saving of thousands per year, which is kind of welcome.

I am of course, a member of a car club. An innovation that rethinks our approach to mobility and car ownership, and in the process delivers the win, win, win of not only CO2 cuts, but reduced stress and cost savings for hard pressed families – and all without depending on any magical new technological advance.

This is what system innovation is all about: getting new or established players together to rethink existing systems which are past their prime, and getting in the way of a more sustainable world. In the case of car clubs, you have entrepreneurs financed by venture capitalists and banks, working with local authorities, ICT providers and the car manufacturers themselves to deliver the solution. The next step is to take it to scale, with UK membership doubling each year and the potential market estimated at 15% of all drivers.

We seek to replicate this kind of change in the wider energy system. Everywhere existing systems fail us, encouraging consumption while marginalising efficiency and security. In the case of cars, large investments, that many can ill afford, are driven by marketing and image as much as need. Once the vehicle is sitting outside the front door, it becomes the default choice, even for the enormous number of journeys where more sustainable methods would do just as well (a quarter of car trips are under 2 miles).

But there are some great ideas around which can put our energy system on a more sustainable path, such as car clubs, smart grids or energy efficiency investment schemes. We want to scale up approaches like these, and create new financial and business models to support them. We don’t have to be stuck with the same old incumbent companies pursuing the same old approaches, and we can’t afford to wait for new technology. We can think differently, and it works.