From the February 2018 issue
Technology is forecast to so thoroughly transform the automotive landscape that not even the idea of ownership is expected to survive the next generation or two unchanged. The latest twist: the car subscription program. With this model, rather than making payments on a single car, you pay a monthly fee to have access to a pool of vehicles. If your needs change, so can your car. Taxes, insurance, and maintenance are generally included. Cadillac and Porsche were the first carmakers to launch such programs [see “The OEM Approach”], and others have announced their intent to follow suit.
Then there’s Mobiliti, a third-party subscriber service affiliated with no particular brand. Instead, Mobiliti is partnering with dealerships that will list vehicles from their inventories. Monthly fees will vary but will be based primarily on a vehicle’s cost to the dealer and the customer’s intended mileage, driving record, and credit history. It’s free for dealers to join, and there’s no up-front fee for subscribers. Maintenance and property-damage insurance will be included, and so will liability coverage “with generous limits” as well as comprehensive and collision insurance. Mobiliti’s dealer partners will be covered under an umbrella policy. One swap per month will be allotted, with extra swaps costing $99.
From a customer perspective, the appeal of a subscription service is dependent upon a number of factors: personal finances, aversion to ownership, the inability to love and maintain a monogamous relationship with a car. But for a dealer, signing on with Mobiliti seems like a no-brainer. Cars enrolled with the service stay on the lot and can be listed for sale until they’re rented; there’s no charge to list them; and instead of just taking up space, they’re out on the road—depreciating with every mile driven, yes, but making money to offset both the depreciation and the dealer’s floorplan, or inventory-financing, expense. The length of time and number of miles that a subscriber may keep a car are up to the dealer, and new and used vehicles can be offered.
Mobiliti is aiming to amass a pool of 200 cars for its launch in Austin, Texas, early this year, with other cities in the Southwest to follow. While any dealer can sign up, we’ll know the idea has staying power if the company starts signing major dealer groups. Mobiliti’s dependence on idle inventory could keep the hottest models from being listed with the service, but as long as the company can bring on enough dealers, given the sheer volume and variety of stock most carry today, it seems that choice will be all but guaranteed.
The OEM Approach
While Mobiliti is horizontal in orientation, allowing users to move among brands for each vehicle swap, Book by Cadillac and Porsche Passport are vertical, keeping subscribers moving within their lineups. Cadillac’s program has one flat rate; Porsche’s offers two levels of subscription: Launch and Accelerate.
|Cadillac||Porsche Launch||Porsche Accelerate|
|Vehicles:||ATS-V, CTS-V, CT6, CT6 PHEV, Escalade, XT5||Cayenne; Macan, 718 Boxster, 718 Cayman (including S models)||adds Cayenne S and GTS, Macan GTS, Panamera (excluding Turbo), 911 cabriolet and coupe (including S and 4S models)|
|Markets:||Dallas, Los Angeles,
New York City