Washington - Recent years have seen an explosion in services that offer a
product for a flat monthly fee. No longer the domain of magazines or
newspapers, the subscription model now supports everything from streaming music
to clothing shipments.
Now, that approach is increasingly coming to the
automobile. Since its debut in February, between 4 000 and 5 000 people have
signed up for a Cadillac pilot project that lets drivers swap one automobile
for another almost as easily as they can switch TV shows, according to the
company.
The program, known as Book by Cadillac, charges $1 500 a
month and lets drivers cancel anytime. The premium service grants access to 10
Cadillac models. Using a smartphone, customers can trade in their vehicles up
to 18 times a year. So far, the program has only been available in the New York
City area, but in light of its popularity, it could expand to other big cities,
Cadillac said.
"There's potential for global expansion," said
Andrew Lipman, a Cadillac spokesman. "There are a lot of ways we can
expand this. But we want to hone in and perfect the program here in New York
first."
The Cadillac project is targeted at consumers of luxury
vehicles. But GM has also explored a similar business model in its more
mainstream Chevrolet line, with a test program launched earlier this month
known as Maven Reserve. That service allows drivers in Los Angeles and San
Francisco to rent a Chevy Tahoe or Volt for up to 28 days for a flat monthly
fee. Both programs appear superficially similar to leasing, but are more
expensive, cover maintenance and insurance and come with added perks, such as
Cadillac's on-the-fly swapping system and Maven's offer of $100 worth of fuel
and a dedicated parking space for each rental.
Big bet
The two programmes reflect a big bet on the future of car
ownership. At a time when rising debt and lower wages have forced some
Americans, particularly younger ones, to put off major purchases such as homes
and cars, alternatives to traditional car ownership are poised to become more
common, said Johanna Zmud, a senior research scientist at Texas A&M's
Transportation Institute. Other factors contributing to a long-term shift in
ownership patterns are changing marriage rates, said Zmud, as well as a growing
tendency for Americans to congregate in dense urban areas.
Shifting beliefs about ownership are not only giving rise
to vehicle sharing, but also greater flexibility in vehicle types. Rather than
purchasing and holding onto the same car for a decade or more, consumers who
use car subscription services are able to choose different vehicles to suit
different needs on-the-fly. For example, the same car subscription could allow
drivers to select a fuel-efficient sedan for weekday commutes while letting
them switch to an SUV for weekend getaways.
Some competitors to GM have begun to offer this feature,
as well. Car2Go, which serves Washington, New York City, Portland, Oregon and
Austin, Texas, recently expanded its fleet of tiny, zippy Smart cars to include
larger Mercedes-Benz sedans and SUVs. Those vehicles can be rented on daily,
hourly and by-the-minute rates. For short trips across town, Car2Go's prices
are competitive with those of ride-hailing services such as Uber or Lyft.
Both of GM's programs are substantially more expensive.
Even Maven Reserve, which is targeted at Chevy drivers, costs upward of $1 100
a month. Beyond the largely affluent markets where it's being tested, it is
unclear whether there is much of a market for GM's subscription services. BMW had
considered offering a similar platform for its vehicles, but balked at the
business case, according to the Wall Street Journal.
Still, with societal trends pushing Americans to give up
the hunk of metal and alloy sitting in their driveways, it's clear that
experiments with new business models are not going away.