Subscription and car sharing are probably more efficient options for the use of the car, of course depending of customer needs or lifestyle.
Both services, car sharing and subscription, are designed for those customers wanting more flexibility in how they use a car. Thanks to its growing popularity and expansion, customers can have access to a car much easier than ever before. These services provide alternatives to traditional car ownership. However, there are key differences between the two that may be more suitable for customers depending on their needs and lifestyle.
In Car sharing customers typically use the car on an hourly basis whether that’s a few hours or days (Pay-per-use). They need to pick up and drop off the vehicle to the same or different station (known as round trip or one way). Usually, they can pick up the vehicle on the street, known as free-floating or at pre-defined locations, called station based. In both cases, customers can access the car through a car sharing solution that provides all what they need (Booking, open-close the car and payment) and the cost of the service is calculated either on a minute, hourly or daily basis. All expenses are generally included like insurance, registration and maintenance of the vehicle.
Car subscription is distinctly different, customers will have exclusive access to a vehicle (always same vehicle – Not shared) for a longer period of time whether could be months or years (Similar to other subscription services). The fee covers everything including all the running costs such as insurance, registration, roadside assistance and maintenance. In some cases, customer could have the flexibility to swap out the vehicle for a different model or stop your subscription entirely at any point with a cancellation fee. Typically, none of the services includes Fuel and toll costs.
With both, there are no upfront costs just a monthly or daily service amount; and the flexibility of both means that if the car doesn’t fit the mobility needs it can be hand it back without any problems. It is clear that Car sharing services are better suited for shorter periods of time whereas a car subscription service is a better for a longer period of time.
Having clarified the differences between both services and some of the benefits for customers, it’s also important to look more in deep to the service providers, specifically OEM’s and dealer’s network.
For the OEMs, these services could become particularly attractive as they have the potential to find the most cost savings through providing it directly to the end customer. Manufacturing, repair, maintenance, insurance and tires can be ordered collectively. On top of that, customer loyalty can be increased. Looking ahead, all manufacturers will enter into this market directly or increasingly though their dealers’ network.
And therefore, car dealerships are directly affected. First of all, the business is entering in a deep transformation (link to Dealer’s blog note) since non-traditional mobility services are increasingly taking place and manufacturers in some cases are directly becoming mobility providers positioning own mobility brands; on the other hand, the customers, besides their mobility needs, are looking for a seamless consumer experience. New mobility customers are tech savvy, connected, pre-informed, eco-friendly and expecting to enjoy a customized consumer experience, quicker, easier and fully integrated.
The dealership needs to understand the customer’s situation very well and be prepared for it.
Creating an offer that combines a subscription with other mobility services, such as car sharing or even an additional micro-mobility offer will for sure build a stronger relation with customers and fulfill their mobility needs.
Having one single touch-point for all mobility services, with a mobility-first approach, like a native app, will generate a seamless customer journey with no need of different apps and user´s sign in for each service. For the service provider, the administration will be much easier as well as the cost of maintenance.
For the car dealership, maintaining and intensifying personal contact with the customer will be key to create a connection with customers, engaging loyalty. Also, direct contact with mobility services employees at the dealer is crucial for many customers and cannot be replaced by anything.
How can GTS support dealers and OEMs on its mobility services journey and implementation?
GTS has been providing mobility solutions for more than 10 years based on a single platform that supports multiple business channels, products and services and gained experience into how to adapt strategies and implement a variety of mobility solutions so customers will be delighted with a smooth and enjoyable experience.
Writer Guest and Mobility Industry Expert, Gabriel Madero.