Is 5G going to change how we get from point A to point B?  Is a Vehicle Subscription Service in your future?

Recently, Forbes Magazine had an article on developing technology that was going to significantly impact creativity and accelerate a new industrial revolution.  Quoting from a Bank of America Merrill Lynch (BofAML) analysis, Transforming World – The Next 5 Years, that the “the five most influential themes that should shape our world over the next five years” are big data and artificial intelligence; the rise of electric vehicles; demographics; climate change; and privacy and cyber threats.

These trends, enabled by 5G as the bedrock platform, will hasten the rollout of next-gen technologies. BofAML says that by 2025, a fifth of cars sold globally will be electric vehicles (EV), and by 2030 EVs will account for 42% of sales. But at the same time, the sector will also be affected by the rise of ride-hailing, car-sharing, vehicle autonomy and multi-modal travel. This will lead to, for example, changes in real estate as space is freed up by the demise of filling stations and car parks.

The last few years have seen an increase of car-sharing and ride-sharing companies, such as Zipcar and Uber.  Now automakers are joining in with car-sharing platforms of their own. GM announced in 2018 a new service it was rolling out in the Midwest called Maven.  In February, BMW and Daimler (maker of Mercedes-Benz) announced a new $1B mobility partnership. These ventures, and surely others to come, are tasked with developing and adapting systems that fit the changing way people move about.

One of the key areas that automakers and start-up companies are betting that today’s generation of drivers will embrace a new model of temporary ownership called a vehicle subscription service.

A vehicle subscription service offers an alternative to buying or leasing. You don’t have to sign a long-term contract or commit to just one vehicle. Once you join, you typically pay an all-inclusive monthly or sometimes weekly fee that covers the cost of using the vehicle you choose, including insurance, routine maintenance, roadside assistance, and a warranty. You then have the option of swapping out your vehicle periodically, depending on the terms of your subscription.

For example, perhaps you’ve been temporarily transferred to a new city and want a fuel-efficient car for the six months you’re living there. Maybe you need a second car only during the summer when your child is home from college. Or you might want the flexibility to drive whichever vehicle suits your needs at the time, such as a luxury sedan for day-to-day driving, then a minivan for a family trip. If your needs change, you can return your vehicle and get another, or end your subscription. Plans vary, but many subscription services require only a short one- to two-month minimum commitment, with the option to renew. Subscription services are often app-based, making it easy to find and swap vehicles, and your newest ride may be delivered to you via a concierge service.

Of course, flexibility and convenience come at a cost, which is often substantial, so if you are interested in subscribing to your next vehicle you’ll need to carefully assess your options. Prices depend on the subscription service, the vehicle selected, and other factors such as mileage and extras. You may also be required to pay a sign-up fee.

Vehicle subscription services are evolving and are still not available everywhere. Many services are in the testing phase, and most have been launched primarily in major metropolitan markets such as Los Angeles, San Francisco, and New York, with a few offered in other cities. But vehicle subscription services are gaining traction, increasing the likelihood that they will someday be available in most areas.