Pay-as-you-go services are catching on in the automotive industry

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By George Kuruvilla

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Published: Thu 25 Aug 2022, 6:03 PM

As citizens of the vast digital empire, we are not strangers to the phrase “Please subscribe”. These are the words every established and aspiring YouTuber will say to encourage you to watch more of their content.

Casual subscription services like these and more formal ones aren’t new to us. We have been subscribing to a wide variety of things for decades now, like newspapers and gyms. And with the progress of digital technology, we have been able to access entertainment, information and services on demand, through our TVs, our laptops, phones and other mobile devices. This includes streaming services, such as Netflix and meal delivery services too. Today, you can even have a bunch of socks delivered to your door on a monthly basis, if you wish to do so. Such is the expanse of the subscription service industry.

Car Subscriptions

And it should not come as a surprise that the automotive industry has also been adopting this format and technology. Start-ups like Moov by Al Futtaim, Invygo and Carasti have also joined the bandwagon with their multi-brand car subscription services here in the UAE and the Middle East. And they are promoting their businesses by telling customers that they can enjoy a different driving experience by changing their vehicles, as and when they want. But of course, each membership comes with its own options or fine print. Depending on the programme, you can “rent” their vehicles for a wide range of durations and swap between vehicles too. Besides this, they will also take care of the insurance, maintenance and even deliver the vehicles to you.

We have also seen regular car manufacturers get into this kind of business. The Porsche Passport, Book by Cadillac and Care by Volvo are some of the setups created by traditional car makers. Now, why would they indulge? Well for one, reach and publicity. As per one source, 80 per cent of people who opt for the subscription service are new to the brand. This basically means that automakers are able to get new customers through the door at a relatively low advertising cost.

On-demand car features

And now they have taken it a step further, by extending the subscription model to specific features within vehicles. Unfortunately, the first impressions haven’t been the finest for some.

Most recently, BMW found itself in hot water as it rolled out the subscription service for heated seats in their vehicles sold across Europe and North America. Yes, you can still get heated seats (and other services) the conventional way, by buying it as part of the car’s standard features. But those who chose not to pay upfront can conveniently opt for this self-warming seat feature only during the chillier months for about 10 to 20 dollars a month, depending on the market. Obviously, this has only been made possible because the infrastructure has been laid out prior to delivering the vehicle, which in this case are the in-seat heating coils and wiring etc. The advantage of this system for owners is that they will be able to afford the vehicle they want and pay for the features when they need them.

Do note that the type of feature and/or services offered by these specific subscriptions may vary market to market. Some other examples are remote start functionality, active cruise control, sport suspension setting, high beam assist and “BMW Drive Recorder”, which uses the car’s external cameras to make video recordings etc.

BMW owners can click OK to these features through the BMW ConnectedDrive Store, under BMW Functions on Demand. This also allows customers to experience these new software-based features by purchasing a trial before actually buying them for longer durations.

And as with everything good, bad or ugly online, BMW has been facing major backlash… mainly for taking away the usability of the services that are already installed in the car.

Popular TV show host Trevor Noah said, “This is interesting. BMW is going to let people subscribe for certain features in the car like heated seats. Yeah, so instead of buying it, you pay month to month, which I’ll be honest sounds great ‘cause, I don’t need heated seats in the summer. So why am I paying? Ah! They should do this for every feature. The radio. The windshield wipers. Yeah. The horn. I don’t need the horn all the time. I want to subscribe to the horn if I get cut off.” He added to it by saying, “But there is a downside. You realise there is a downside to this. Car manufacturers are joining the subscription model and we know how this goes. First you buy things, then they go… oh, now you subscribe. And how does it end? It always ends with ads. Always. It’s only a matter of time before you buy a BMW and then you’re going to have to listen to a mattress ad every time you start the car.”

Another Twitter user posted a meme stating, “Trying to drive my BMW home before the seat belt subscription expires.” These kind of reactions — some hilarious — exposes the unpredictability and inconvenience of having to renew features through subscription services, as opposed to have them as standard fitment on your vehicle.

Also, the subscription model isn’t exclusive to BMW. In some countries, Subaru charges their owners a fee for a remote start function through an app and Tesla has been known to limit or extend the battery range of their models through software.

However loved or loathed the reactions may be, looks like the subscription model is here to stay. And to be very honest, this seems to be only a problem for the generation that is being displaced, the ones who have trouble adapting. The younger gen, which will grow with this kind of model and tech, will probably expect it as part of everything in their lives, including cars. Especially cars.

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