Vehicle subscription is a service where a customer pays a recurring fee for the right to use one or more automotive vehicles. Some vehicle subscriptions offer insurance and maintenance as part of the subscription fee; other subscriptions allow the subscriber to switch between different vehicles during their subscription period. Industry commentators consider vehicle subscription to be an alternative to owning or leasing a vehicle.
Vehicle subscriptions have been available since at least 2014. Clutch Technologies, a start-up, launched a subscription service for consumers in Atlanta in mid-2014; Flow Automotive Companies was the first automotive dealership to offer a subscription service, launching Drive Flow in Winston Salem in 2016, using Clutch's technology platform. 2017 saw several automotive manufacturers announce and launch subscription services, including Book by Cadillac, Porsche Passport, Care by Volvo and Canvas (backed by Ford Motor Company). By 2018, a number of startups and automotive dealership companies had launched subscriptions in multiple markets.
Video Vehicle subscription
Definition
Vehicle subscriptions are a type of subscription business model where a customer pays a periodic fee for the use of one or more vehicles. The difference between a vehicle subscription and buying a vehicle is that the subscription service retains ownership of the vehicle. While vehicle subscriptions and traditional automotive leases both involve recurring payments, many subscription services offer more flexibility in terms of minimum term and the ability to swap between vehicles. The main difference between vehicle subscriptions and vehicle or car rental is that most subscriptions are designed to offer full-time possession of a vehicle such that the subscription replaces the customer's primary vehicle, whereas rental involves the effort of procuring vehicles for specific dates or trips.
Vehicle subscriptions have been variously been identified as part of the "sharing economy" or part of the "subscription economy". Vehicle subscriptions have also been classified as a form of "transportation-as-a-service" and as a form of "mobility-as-a-service".
Maps Vehicle subscription
Common features
Edmunds.com observes that there is a wide variety in the types of vehicle subscriptions that are available, such that many different customer needs can be met across the various services. Most vehicle subscriptions allow customers to pay a flat periodic fee, typically on a monthly basis. Whereas some subscription offerings have no minimum term (e.g., Book by Cadillac), others do have a minimum term (e.g., Care by Volvo launched with a two year minimum term). Vehicle subscriptions include flat-rate, no-haggle pricing. Prospective customers typically sign-up using an app. The monthly fee may include insurance, maintenance and roadside assistance. Some services include a mileage limit and some offer unlimited mileage. Several services, such as Porsche Passport and Book by Cadillac, offer the option to swap between different types of vehicles. Some services offer unlimited swaps and some restrict the number of swaps.
Types of providers and their business models
Vehicle subscriptions are offered by several different categories of company. Each category is pursuing a slightly different business model.
Automotive manufacturers
Several automotive manufacturers and brands offer or have announced vehicle subscriptions, including Porsche, Volvo, Cadillac, Hyundai and Ford. These services offer subscribers vehicles from a single brand or, in the case of Volvo, a single vehicle. While initial launches have tended to focus on one or two cities, there is evidence that the manufacturers will eventually offer their services more broadly: Care by Volvo was immediately available across the and Book by Cadillac has expanded beyond its original launch market of New York City.
The manufacturers have announced various objectives for these programs. Volvo has described the objective of Care by Volvo as to provide convenience by offering access, insurance, maintenance and support within a single package. Cadillac has described the objective of Book by Cadillac as being to grow the number of Cadillac drivers, particularly those who are new to the brand. Porsche has described their Passport service as a way to cater to customers with highly varied lives. Ford has described Canvas as a way to grow the number of Ford drivers while also controlling the number of used vehicles hitting automotive auctions.
Automotive dealerships
A number of automotive dealerships have launched vehicle subscriptions focused on the markets where they have stores. For example, the Jeff Wyler Automotive Group offers a subscription service, Wyler Fastlane, in their home market of Cincinnati. The services offered by these dealerships typically include vehicles from several different brands offered by their stores, allowing customers to drive a wide variety of vehicles.
Dealerships have talked about using subscription to meet customer needs better and to expand their role in serving drivers. Flow Automotive has talked about allowing customers to drive different types of cars as their lifestyle demands. The managers of Park Place Select in Dallas talked about transforming from a dealership to a "full-fledged transportation service".
Start-ups and corporate-backed ventures
A large number of start-ups have been created to offer vehicle subscription services. One early pioneer in the vehicle subscription space was Joule, which won the a TechCrunch Seattle pitch competition in 2015. Other USA-based start-ups include Carma, which is a graduate of the Techstars incubator program, and Condor. Several vehicle subscription start-ups have been founded in Europe, including Wagonex and Drover, both from the United Kingdom, and Dribe and Bilabonnement, both from Denmark. In 2017, Gurgaon based startup Revv, launched Asia's first monthly multi-brand car subscription program Switch, across 11 cities in India.
Start-up Clutch Technologies has operated a subscription service in Atlanta since 2014. However, Clutch's primary business is to provide software for dealerships, manufacturers and others to offer subscriptions.
Several established companies have created new business units that are offering vehicle subscriptions. In the USA, Cox Enterprises launched Flexdrive. In Europe, LeasePlan, a vehicle leasing company, will offer subscriptions with their CarNext.com platform.
Other providers
Zipcar is offering a version of vehicle subscription, dubbed Zipcar Commuter, that provides dedicated possession of a vehicle from Monday to Friday.
List of vehicle subscription services
References
Source of article : Wikipedia
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