Like Netflix, Car Subscription Services Now Growing in Popularity

16 September, 2018

Video and music services have become increasingly popular for people seeking to pay a set price for unlimited use of their favorite content. Such subscription services include Netflix, Hulu, Apple Music and Spotify.

Now, a growing number of companies are offering similar subscriptions for something most people are used to owning: cars.

Most of the companies charge a monthly rate that covers the use of the vehicle, as well as insurance coverage and all other costs.

Subscription car plans are mainly aimed at drivers who do not want to have long-term agreements for one single car. Many people using the services say they like being able to use a number of different kinds of vehicles depending on their needs.

Steve Barnes uses a subscription car service in Atlanta, Georgia. It is offered through Clutch Technologies. He told the Associated Press that every time he orders a new car "it feels like Christmas morning."

Barnes signed up for the service in 2016 to be able to use many kinds of vehicles for different purposes. He says for some activities with his children, he chooses a large sport utility vehicle, or SUV. But when he wants to have fun or go out at night, he chooses a Tesla or some other kind of sports car.

Clutch Technologies is a company that offers businesses a complete platform for vehicle subscription services. (Clutch Technologies)
Clutch Technologies is a company that offers businesses a complete platform for vehicle subscription services. (Clutch Technologies)

But the ease of such services can come at a high cost. Barnes pays $1,400 a month for his subscription. This is much higher than the $900 a month he used to pay to lease an SUV with insurance.

Still, he has no desire to own or lease a car again. He says his subscription has permitted him to drive many different vehicles he estimates would have cost more than $1 million to own.

"I am definitely a ‘tech head' who had always fantasized about being able to get whatever car you want," Barnes said.

Some of the world's biggest automakers are currently offering subscription plans for vehicles. One of them is Ford. The company signed a deal last year with San Francisco-based subscription service Canvas.

Canvas offers several models, including used vehicles. Monthly subscriptions start at $379 for small cars and go up to $1,125 for large SUVs. But these plans limit drivers to 800 kilometers per month. For another $100, users can get unlimited travel.

Canvas currently has subscribers in the San Francisco and Los Angeles areas. In its first 16 months in California, thousands of subscribers have joined the service, the company said.

"People are generally changing the way they are working, they are changing the way they are living, and they are generally changing the way they are consuming things," Canvas chief Ned Ryan told the AP. "Subscriptions are going to be a very large and growing share of how people consume automobiles."

Adela Spulber works at the U.S.-based Center for Automotive Research in Michigan. She told Investor's Business Daily that the reach and effects of vehicle subscription services remain unknown.

"These services have popped up in the last two to three years, and we're still in the dark as to how many people are actually using them," she said. "There is still so much we don't know about the viability of these things."

But Spulber also told the newspaper she believes car subscriptions could become widespread if other transportation methods experience problems. As an example, she said some cities have moved to limit bicycle and scooter sharing services. And the ease of being able to order different cars that are brought to users could have "great appeal" to many people, she added.

I'm Bryan Lynn.

Bryan Lynn wrote this story for VOA Learning English, based on reports from the Associated Press and Investor's Business Daily. Ashley Thompson was the editor.

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Words in This Story

subscription n. an agreement made between a person and a company to get a regularly service usually paid for in advance

insurance n. an agreement in which a person makes regular payments to a company and the company promises to pay money equal to the value of something if it is damaged, lost, or stolen

sport utility vehicle n. a larger vehicle designed to transport cargo and people and sometimes built to travel over rough roads

lease v. when one party signs a contract with another permitting use of land, property, services, etc., for a specified time, usually in return for periodic payments

fantasize v. imagine something one wants to happen

consume v. use up

pop up v. appear or occur suddenly and unexpectedly

viability n. capable of working, functioning, or developing adequately

scooter n. small vehicle with two wheels, sometimes powered by a motor, used to transport people