Who’s on the money? Carl or Carlos? Listen to private equity tycoon Carl Icahn, and the rise of ride-hailing apps is about to overturn the auto industry’s century-old business model. “There’s a secular change happening, which we see as a great opportunity,” Icahn, who has a stake in Lyft Inc. and controls Hertz Global Holdings Inc., told David Welch of Bloomberg News. Carlos Ghosn, whose Renault SA-Nissan Motor Co.-Mitsubishi Motors Corp. alliance is on its way to becoming the world’s biggest car group, sees the mobility revolution differently. “A lot of people think this is substitution. It’s not—it’s addition,” he said at a Bloomberg conference in New York on Wednesday, when asked whether the likes of Lyft and Uber Technologies Inc. would hurt private sales. “The traditional business of building cars and selling cars and owning cars is going to continue.” Here are four reasons why this Gadfly would place his bet with Carlos, rather than Carl. “Mobility” isn’t new Two of the three shifts currently sweeping the global car industry are genuinely revolutionary. Electric vehicles plan to consign Gottlieb Daimler’s world-changing invention to the trashcan, reconfiguring global supply chains and the commodities industry in the process. Autonomous cars aspire to eliminate an activity—human-guided driving—that ultimately dates back to prehistory. Ride-hailing apps and the broader mobility revolution don’t promise anything so radical. For all their unique qualities, Lyft and Uber are ultimately in the taxi business. In the form of hansom cabs and rickshaws, that was in existence before cars themselves. Finding other ways of splitting ownership and usage has been around since John D. Hertz started Icahn’s car-rental company in the 1920s. Pooled car-sharing firms such as Zipcar and City Car Club began cropping up almost two decades ago. Non-medallion “green taxis” had a far bigger impact in Brooklyn during the first years of their deployment than Uber: There’s no paradigm shift around “mobility” that offers a radically different slice of that salami. When automakers invest in ride-hailing startups, it’s best to view them as cementing their relationships with potential major fleet buyers, rather than doing anything more fundamental. Cars aren’t under-utilized One argument made in favor of ride-hailing is that the current setup is wasteful. For all the money, energy and effort that goes into building an automobile, most cars are parked 95 percent of the time. Get the world’s 1 billion-strong fleet moving 90 percent instead, and you could squeeze the same number of passenger-kilometers out of about 60 million vehicles. Most cars are parked: 95% of the time That drastically misunderstands how the transport industry works. You can’t spread travel out to match an average level, because it’s like electricity, domestic sewerage or the internet—a business that’s ruled by daily peaks and troughs in demand. If you want your system to be capable of handling the daily peak, there has to be a lot of spare capacity hanging around the rest of the day. A car that is used to commute to and from work for 30 minutes is going to be parked for—yes - 96 percent of the time. A related point is that cars aren’t so much worn out by time, as by mileage. The average age of a New York taxi is 3.3 years, compared with a national average for all light vehicles of almost 12 years. That’s hardly surprising: Racking up about 70,000 miles annually, taxis drive about five times further every year. What improved utilization giveth, accelerated depreciation taketh away. Capital is still king Carmakers have been doing their best to get their expensive products off their balance sheets for generations, and to that end have incubated dealership networks, finance arms and fleet-buying programs. One of the useful things about the current set-up, from a carmakers’ perspective, is that the burden of providing the capital for this most big-budget of consumer goods lies with the mass public. In separating taxi-booking fees from the costs of fleet ownership, that lesson is, if anything, one of the secrets of Uber’s and Lyft’s success. The prophets of mobility tend to be maddeningly vague around the question of who will ultimately own the vehicles in our car-sharing future. Compare the return on capital of a typical carmaker to a typical car-rental business and it’s clear why the former aren’t keen to step into the breach. The future is public The nightmare scenario for carmakers would be one where the growth of ride-hailing apps causes people to give up on vehicle ownership altogether. A two-year study of seven U.S. cities published last month by the University of California at Davis suggests that’s not happening: Among households that don’t use public transport, there’s no difference between the car-ownership rates of those that use ride-hailing and those that don’t—and those who use such apps are somewhat less likely to use public modes. New York’s Metropolitan Transportation Authority attributed a 3 percent dip in weekend ridership last year to the growth of ride-hailing apps, and a study this year by economists at Bowdoin College found that for the most part, ride-hailing substitutes for, rather than compliments, public transport use. That matters because public transport—from streetcars to light-rail networks—has always been a more potent threat to the passenger car industry than alternative sharing modes. Rail traffic in the European Union’s big four economies increased by 68 billion passenger-kilometers between 2000 and 2015, compared to a 155-billion-passenger-kilometer increase in road traffic. Assume that the average car carries 1.45 people and travels 7,000 kilometers a year, and you’d have been able to sell an additional 7 million cars had that extra rail traffic kept to the roads. Ride-hailing businesses are potential major customers who are swimming in venture capital, so it’s little surprise automakers are keen to talk their language. And, as Gadfly’s Shelly Banjo has argued, a bit of Silicon Valley magic dust seems to go a long way in enhancing automakers’ images with investors these days. Still, don’t get carried away every time you see the word “mobility” slapped on a presentation. Promises of a revolution can be taken with a decent pinch of road salt. This column does not necessarily reflect the opinion of Bloomberg LP and its owners.