Signal 1: The Latest in Commitment-free Living: Car Subscriptions

Startup Carma is offering up a new idea: car subscriptions. Subscribers select from a variety of cars, sourced from a local dealership, and pay a monthly fee that includes insurance and maintenance. Aimed at millennials who require regular car usage but don’t want the multi-year commitment, subscriptions are month-to-month (starting at $499): costlier than leasing or owning, but exceedingly flexible. Some effects this may have on cities:

• Assuming subscribers hold on to their cars for less time than the average lease, this service may cut down on car storage space, which could be used for other purposes, such as affordable housing.
• Carma partners with local dealerships to use otherwise idle inventory. With the proliferation of e-commerce, this may help car dealerships rethink and revitalize their business models.
• This could benefit municipalities looking to more efficiently manage their fleets.

For those who abandon leasing in favor of this more expensive but flexible model, traffic congestion and air quality could improve. While this may result in fewer cars on the road, proportionally more may have up-to-date technology, given Carma’s presumably younger and therefore more technologically-advanced fleet. Features such as lane correction could result in safer road conditions.

Source: D. Coldewey (September 5, 2018). Lease, own or subscribe? Carma wants to jump-start the car-as-a-service market. Retrieved from https://techcrunch.com/2018/09/05/lease-own-or-subscribe-carma-wants-to-jump-start-the-car-as-a-service-market/