Vehicle Subscriptions are Dead

[Alex Snyder]

@James A. Ziegler has been making an argument that they don't pencil for a while. @kevinfrye can probably comment on Ziegler's statement that Wyler's Clutch-powered vehicle subscription site has been offline since November of 2018.

On the last RefreshFriday we learned that Wyler had or was getting out of the subscription service. During that same RefreshFriday, Shaun Kniffin confirmed that Germaine is still doing it.

Is it dead? Does it have a future?

Here is Ziegler's most recent article on the topic: https://www.autodealertodaymagazine...0ZabF-41zAe7pjBLSwfxMrxhJfgNA9Uj6KTIlGlxCIJD4

 

[john.quinn]

Apologies for the ignorance... what, exactly, is "Subscription Service?"

Oh wait... are you talking about this kind-of "time-share" baloney model of owning/operating?

 

[joe.pistell]

IMO, I love the subscription model. From a biz perspective, I would have preferred to have it centered around the dealership for many reasons.

• Lower operation costs
• Easier to manage
• The subscription CX (customer experience) is anchored around the store.
  • Subscribers can come to the store, walk among the selection and select the car.
  • Subscribers connection to the Dealers CX becomes far stronger.
  • Anchoring the CX to the store helps focus the transition from a subscriber to a buyer.

Lastly, I haven't done the math, but I think late model, low mile used cars could improve the balance sheet and not break the Subscription magic.

Bottom line, it's a car rental with a cool spin.

 

[john.quinn]

I dunno, Uncle Joe. Sounds like a hassle to me. Hard to argue that "simplicity" has been THE key to the success of the programs most associated with this model (Lyft, Uber, etc). But walking out to your driveway (or wherever you park), is still the simplest means of gaining transportation. Adding the need to transact -- whatever form that transaction takes -- more often to perform this simple feat is adding a layer of seemingly unnecessary complication.

One of those things that looks good on paper (especially when you don't really understand the problem, i.e., OEM's).

 

[joe.pistell]

I lack any real-world experiences in subscriptions (aka rentals). My instincts are telling me that I want to serve those ppl that would like the service to help them in their path to a purchase. This is why I'd anchor the pickup and drop off to the dealership. A few user stories that work in Subscription Model

• I'm over mile'd in my lease...
• I just sold my current car, but, I need time to find my next car...
• I'd like to try before I buy...
  • I don't know what kind of car I'd like to buy, I'm looking for ideas...
  • I can't make up my mind between...
  • I've never owned a ____ before (insert: make or model or segment)
• I've always wanted to drive a...

I'd pimp this all over my site and in the service lanes.




p.s. A subscription could work for this user story:

• I live two lives but don't want two cars!
  • I live & commute in the city but take my family camping every weekend during the summer.
  • Somedays I want to be seen in something hot, other days I gotta haul stuff

 

[Alex Snyder]

Apologies for the ignorance... what, exactly, is "Subscription Service?"

Oh wait... are you talking about this kind-of "time-share" baloney model of owning/operating?

Haha on the baloney part

The leading example of this is through the technology that powers many of them: https://www.driveclutch.com ...a Cox Automotive company (I know you'll like that John).

 

[Alex Snyder]

I lack any real-world experiences in subscriptions (aka rentals). My instincts are telling me that I want to serve those ppl that would like the service to help them in their path to a purchase. This is why I'd anchor the pickup and drop off to the dealership. A few user stories that work in Subscription Model

• I'm over mile'd in my lease...
• I just sold my current car, but, I need time to find my next car...
• I'd like to try before I buy...
  • I don't know what kind of car I'd like to buy, I'm looking for ideas...
  • I can't make up my mind between...
  • I've never owned a ____ before (insert: make or model or segment)
• I've always wanted to drive a...

I'd pimp this all over my site and in the service lanes.




p.s. A subscription could work for this user story:

• I live two lives but don't want two cars!
  • I live & commute in the city but take my family camping every weekend during the summer.
  • Somedays I want to be seen in something hot, other days I gotta haul stuff

Everything you're saying sounds great Joe. But I start to have a problem with it when you tell me it costs $900 a month and one month I might get a Honda Pilot.

@James A. Ziegler hits on some other issues with the public in his article predicting what this subscription model will end up as: https://www.fi-magazine.com/324520/...k6EF4JP3D3GELgKVw9MN-5miLAcPSKn3duQMKXcJ0VrUE

 

[joe.pistell]

The subscription length is up to the dealer. In my view, you could swap your ride as often as daily. $900ish p/mo allows you access to the fleet. Offer a -WIFM bonus- if they buy their next car from you.

Squeeze out the Subscription costs, demonstrate that it's a new way to 'try before you buy'. I'd think it'd be a fun way to buy my next ride. Hmmm... let's see.

A Subscriber to Buyer User Story

What is this Subaru Eyesight that my pals rave about? (monday)
Will my wife like driving a Suburban and will it fit in my garage? (tues, wed, thurs)
Just what is it like to own & drive an EV? (friday to monday)
I've always wanted to drive a mustang (tuesday)
Ok, I need a family hauler, the Suburban is too large, I'll go down to the dealership and look around (wed)
Dear God, I'm driving a Grand Caravan (wed, thurs, fri, sat, sun, mon)
I refuse to be seen in a minivan, I'll go down to the dealership and look around (tues)
Jeep Grand Cherokee Overland.... mmmmm niiiice (tues, wed, thurs)
Oh I like this grand cherokee and so does the wife, what are the payments on this bad boy? (thursday, friday)
Dear God, this Overland is a lot of $$$, the Subscription assistant suggested I try the Jeep Grand Cherokee Lorado (saturday, sunday...)
I'd like to talk to a sales rep please (monday)

​

 

[john.quinn]

My goodness Joe. People can't be bothered to walk to their mailboxes everyday, but you have them going to the dealership every day to swap-out a ride?

Pretty far-fetched. I can't think of any real scenario that passes the JQ sniff test there.

Plus, I don't understand the business model. At the heart of all "trickiness" in automotive is the reality of managing a constantly depreciating asset. He/she who owns the vehicle assumes the risk. From a dealership perspective, sounds a lot more like a lipstick'd Hertz or Avis than a new way to "revolutionize" car buying.

In fact, it sounds an awful like some poor, misguided souls thought they could do to dealerships what Uber and Lift did to taxi's: apply a little mobile software wizardry and strike it rich.

Another clear example of software people's utter failure to understand automotive retail.

 

[joe.pistell]

I'm with ya Big Guy

"Just because it's a good idea doesn't' mean it'll work"
-Uncle Joe Rule #44

I like the hook and the dealer brand differentiation that Subscription creates. It needs a dealer with a large amount of inventory and excellent messaging.