Why Buy a Car When You Can Subscribe in Style?

(Bloomberg Opinion) -- Venture capital investor and longtime technology observer Mary Meeker has published her annual Internet Trends presentation — 294 slides this year, including a section on transportation. There’s a useful finding on slide 128: What Americans spend on purchasing vehicles has dropped since the 1970s, while spending on “other transportation,” including public transport and ride hailing, has nearly doubled.

Why Buy a Car When You Can Subscribe in Style?

Bloomberg New Energy Finance research published this week suggests that “other transportation” will continue to grow as a share of U.S. transportation spending. Today in the U.S., the average monthly costs of owning, leasing, sharing or subscribing to an automobile service are similar.

In a sense, any form of using a car is a service — the service of moving someone around without expending one’s own energy —  but subscriptions, which allow drivers to pay a monthly fee to access a selection of vehicles, go furthest in removing the usual encumbrances of buying or leasing by providing insurance, maintenance and roadside assistance. There’s quite a bit of range in price for subscription services. Ford’s Canvas service starts at $329 a month; the Porsche Passport service starts at $2,000 a month for access to many different models. Both services meet the same need but in different style. Owning a car can be a small or large part of one’s identity; so can the way one subscribes and what they subscribe to.

And it’s not just about personal cars. As Meeker notes, people took more than 7 billion on-demand trips in hailed cars and on bicycles in the first quarter of 2018. China’s on-demand transport, which makes up more than two-thirds of the global market, grew 96 percent year-on-year.

Why Buy a Car When You Can Subscribe in Style?

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