What Are Subscription Car Services?
Ridesharing isn’t the only thing that has shaken up the driving industry over the last couple years. Another car-sharing model that’s growing in popularity is car subscription services. While it hasn’t made as big of a splash in Canada the same way it has in the United States, it’s definitely a trend people should keep their eyes on.
Much like Uber and Lyft, this car-sharing model is guaranteed to challenge the way we view car ownership as it gives drivers the option to drive the cars they want without having to lease, buy or finance the vehicle. Depending on the subscription that they go with, some even cover things like maintenance fees, gas costs, and insurance.
Since there’s not a lot of competition in the market ride now, car subscription services are pretty pricey — but industry insiders expect that to change once more mobile app developers and automakers jump on the bandwagon. With that said, industry movers and shakers are definitely seeing the potential in this service as more automakers like Volvo, Lexus and Porsche have all invested on their own subscription platform. As more get onboard, who knows how big this could get.
But how does car subscriptions work?
Most of these services are offered over a mobile app, where the driver needs to apply and get their profile approved before they’re able to use the platform. Subscriptions offer vehicles at a preset price with the opportunity for drivers to switch vehicles multiple times a year, depending on the subscription restrictions. While it works very similarly to car rentals, subscriptions last indefinitely or as long as the user wants.
While car subscriptions are quite new for the Canadian market, what does a typical subscriber these days even look like? While the concept is meant to cater to users of all walks of life, right now it only caters to high end users because of their premium prices. With that said, the more that subscription services come north of the border — the more cheaper and popular they’re likely to become with all types of users.
Is It Available In Canada?
As we hinted earlier, unlike the United States, there’s not a lot subscription car options in Canada. But as the automotive industry continues to evolve, this will likely change with more options coming north of the border in the months and years to come. In the meantime, if you’re interested in testing out a car subscription service, here are some of the options currently available in the country:
Available only in Toronto, Vancouver and Halifax, Auto One is one of Canada’s leading car subscription services. In order to use the platform, users must qualify by being at least 25 years old, possess a clean driving record and good standing credit. Once users are approved to use the platform, their monthly fees depend on the type of car they want to subscribe to. Here’s a brief breakdown of some of the packages they offer:
- Vehicles such as a Ford Escape or Kia Soul will start at $500 a month
- Higher luxury vehicles such as the Mercedes C400 or Toyota Prius start at $800 a month
- Top luxury vehicles like the Tesla Model S or Porsche Cayenne start at $1,800 a month
The great thing about Auto One is the library of vehicles they offer to their consumers, catering to the different tastes and needs of each driver. On top of that, drivers are able to shake things up monthly or upgrade their vehicle if they want to. While they’re on the road, drivers need to keep in mind that there’s a limit of 1,000 kilometers per month, with a $0.65 per-kilometer fee if they go past their limit.
Much like other subscription services, Auto One covers car maintenance costs so their fleet is all in tip-top shape. Apart from their application process, there’s an additional initiation fee of $175, and a $125 fee every time you want to swap your car. The only downside? Riders need to keep in mind that this option does not comes with it’s own auto insurance, but instead Auto One is able to facilitate a quote from their insurance broker.
Care By Volvo
Released towards the end of 2018, Care By Volvo launched one of Canada’s first car subscriptions services by giving interested drivers access to a catalog of their vehicles for monthly packages starting at $950.
Subscriptions with Care By Volvo last for two years, with an option to upgrade your package or change your vehicle after 12 months. Currently, interested riders can choose from their
Volvo V60 luxury wagon or the S60 sports sedan — depending on their preference. If users upgrade to the $1,049 monthly package, they’ll be able to access an R-Design car as well.
In addition to the vehicle, Volvo offers an array of additional features that helps give drivers the peace of mind knowing that their vehicle is always in top working condition. Subscriptions include professional maintenance, winter tires for those brutal Canadian winters, road hazard, 24/7 roadside assistance, as well as wear and tear protection. Needless to say, you’re definitely getting what you pay for! Some packages even include specialized in-app concierge service, which coordinates the delivery of your swanky new car, right to your home.
Portfolio By Open Road
Available to Vancouver residents only, Portfolio is the first luxury vehicle car subscription to launch in Canada. It gives users on the app access to an impressive selection of mainstream luxury vehicles, including Mercedes-Benz, Jaguar, BMW and Porsche. The price? $2,499 per month for a six-month commitment, in addition to the $750 activation fees. Other short-term packages range anywhere from $2,999-3,499 depending on the level of commitment you’re comfortable with. The service also features an insurance and maintenance package valued of up to $100,000 and mileage cap of 2,400 kilometers a month or 30,000 kilometers a year.
While it’s a pretty hefty price tag, catered to car enthusiasts and higher income earners — the coolest feature about this subscription is users have the ability to switch up their cars four times a month. So just imagine: a BMW one week, a Jaguar another week and wrapping up your month a Porsche. Not bad, not bad at all!
The Zipcar car subscription currently offers two packages — their “Standard” and their “Plus”. Standard packages start at $249 for their selection of economy vehicles, then gets bumped up to $299 for more luxury cars. Apart from that, you only get charged for how much you drive which is only $0.30 per kilometre. Insurance, maintenance and parking (yes, PARKING!) is included in their monthly fee as well as a gas card to make sure you have enough fuel to get you where you need to go at all times.
Getting started is easy. Once users sign up and get verified, their concierge team will help you pick out a vehicle that’s right for you and coordinate a start date and location. Then once riders receive their Zipcard (which helps unlock vehicles), they’re welcome to use the platform immediately.
The Future of Car Subscription Services
While subscription services haven’t reached the popularity that they’re destined to have, industry experts believe it’s only a matter of time before they blow up.
In an impressive industry report co-written by Antonio Seba, he believes car subscriptions are bound to shake up the industry at some point — it’s just a matter of when. He believes the market will be taken over by fleet operators who will be leasing their vehicles to ridesharing and subscription-based apps. Because of the increased competition and mass appeal, he predicts that subscription services will become so affordable that it will replace car ownership entirely. Then once autonomous vehicles start to hit the market, it will change things up even more as subscription services will also start to appeal to non-drivers as well. Much like other subscriptions like Netflix, Spotify and Apple Music, industry experts believe that the technology will become so sophisticated that you can schedule the exact times you want you autonomous vehicle to show up that your home or workplace.
While this all sounds like a scene out of the latest Michael Bay movie, a world packed with autonomous vehicles isn’t that far away. Even for the skeptics out there, Seba likes to compare the rise of the smartphone to the inevitable rise of self-driving cars. Before smartphones hit the mainstream market, the idea of the smartphone was a faraway, almost out-of-this-world concept. Until the first models came out in the early 2000s, the world of communication, technology and data revolutionized itself in ways it never seen before. Since that happened, the world hasn’t looked back since. This is the sort of impact many people believe that self-driving cars will have — not only will it shake up the lives of its users, it will transform the way we see transportation.
Many automakers are aiming to have their own self-driving vehicles ready to hit the road in the next five years or less. By the time that happens, experts believe that it will take about 10 years of regulated autonomous driving before human drivers start to get phased out of the equation completely. And by then, what’s the point of even owning a car?
At the end of the day, this is all still up for debate. But what’s the verdict on car subscriptions? While they haven’t appealed to the masses just yet, experts believe that until autonomous cars begin to hit the road, these services will continue to be a high end product that caters to users that have a little extra money to spend. Until then, most drivers today will opt for more traditional options like buying, leasing, financing or ridesharing through Uber or Lyft.