What do Vehicle Subscription Services have to Offer?

A growing number of automakers – and numerous startups – are offering all-inclusive monthly subscriptions that allow consumers to drive whatever they want, whenever they want. This new alternative to traditional car ownership and lease models eliminates the need for maintenance and insurance while providing greater flexibility. 

“We don’t eat the same food or wear the same clothes everyday,” said Asoka Veeravagu, co-founder and CEO of Revolve, a premium vehicle subscription service. “We don’t do the same things for entertainment or take the same vacations. Yet when it comes to the car we’re trapped in one car for many years on end.” Revolve allows subscribers to choose from several different automobiles, including the Audi RS7, Porsche 911 Carrera S and Mercedes Benz AMG GT Coupe. 

“Providing variety and convenience through subscription models is part of the pillar of the value proposition,” said Veeravagu. “You don’t want a car for three years and be locked into one model. Someone may want access to a car for three months.”

While Revolve is targeting consumers’ desire to swap luxury cars at will, Carma Car is striving to offer flexibility for everyone else. That said, co-founder Patrick Min doesn’t think that subscription models will put an end to car ownership. “I think, by and large, the traditional models will continue to take the lion’s share of the market for most of our lifetime – if not the rest of it,” said Min, who is also senior director of global automotive consulting at J.D. Power. “But we’re starting to see a lot of customer behavior and preferences change in terms of how they interact with their vehicles. And it’s because of the rise of simple, on-demand services like rideshare and even scooters in a lot of places. It’s how people are viewing transportation in getting from point A to B.”

Min anticipates that the overall expense, particularly as vehicles become more autonomous, could make car ownership cost-prohibitive for many individuals. “For a growing set of customers it’s going to be, ‘How do I get access to a vehicle when I need it?’” Min added. “That’s where these subscriptions will play a role in the future. But it’s growing in terms of people understanding that they’re not as invested into a single car ownership as they might have been in the past.”

And just as mobility evolves, the subscription models are expected to as well. Alex Thibault, VP and GM for Vulog’s North American division, referred to many of the existing subscriptions as a “lease-plus” solution that isn’t terribly different from a typical lease. “We do not believe that is the way of the future,” said Thibault, whose company develops tech solutions for carsharing services. “We think it is a small increment on the ways that are currently prevailing.” Thibault expects the wide variety of vehicles to remain as consumers embrace multiple services to cover a multitude of mobility use cases.

“Users are going to be able to get inside those cars through a reservation a long time in advance, or just instant access – the car is there, I want it, I’m going to drive,” Thibault added. “Or even autonomous – the car comes to me, and I drive. Or the vehicle drives. We feel those are going to be subscriptions.”