The way we consume is evolving. Buying things when the need or desire arises is slowing being replaced by subscription services.
Younger people, in particular, seem happy to subscribe to a range of services. The rise of streaming services like Netflix and Spotify have relegated rental stores to yesteryear and removed the need to regularly visit JB Hifi to purchase movies and CDs.
It’s not just entertainment that is making the move, personal grooming and newspaper enterprises are also successfully migrating consumers to a subscription model. But will this model work with cars?
When it comes to cars, some brands are already active in the subscription (or car sharing if you prefer) space. Holden has recently expanded its Maven Gig service which offers short and long term loans to members ranging from one hour to 28 days.
In theory, a subscription service for cars sounds great, the flexibility to select a car for any given situation is a brilliant idea. But, (there’s always a but), dig a little deeper and there is a significant premium placed on such flexibility.
The cheapest rate on Maven’s website is for a Holden Trax which is available from $250 per week, the larger seven-seat Acadia costs $350 per week. If that seems high, it’s because it is high, though we should say the rate includes insurance, roadside assistance, scheduled servicing and unlimited kilometres.
Still, even with the inclusions, the car sharing model isn't competitive for those who require a vehicle every day. Sure, if you're fortunate enough to live in close proximity to where you work or have access to reliable public transport, car sharing makes some sense, however, plenty of us do not.
People residing in the regions, the places where proper public transport is non-existent or at best unreliable, require daily access to a car to participate in the economy. For those in the outer suburbs of our largest cities, it’s a balancing act where the costs of public transport are weighed against the costs of owning and maintaining a car.
For those with no choice, the subscription model doesn’t even come close to lowering the cost of car ownership.
Competitive pricing is the key to the success of other subscription services. It needs to make financial sense to build a following. Be it a newspaper or streaming platform, subscribers need to see genuine value over purchasing items separately as they are needed or wanted.
Mainstream car brands will find it difficult to present an argument against outright ownership. The flexibility of being able to change models doesn’t outweigh the flexibility of owning a car.
The model might work with premium brands where buyers are happy to pay more for the badge. The value equation that often governs purchasing decisions doesn’t apply to the premium segments, factors such as image play a larger role.
As an example, if BMW offered an inhouse subscription service, those who might be limited to a 320i could potentially access more desirable models.
Perhaps a monthly fee paid in arrears based on the cars driven is a better formula to follow at the premium end where there’s more disposable income at play.
While it might have a future in some areas of the market, car sharing still has a long way to go before its financially competitive for those that require daily access to a car.
There’s still something romantic about vehicle ownership, regardless of how undesirable (or shit) the car is, it’s yours, it only needs to serve one master. For now, we will keep our driveway full.
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