Buying a car is a big committment, especially in times like these. While there are alternatives like Zipcar that allow one to rent vehicles on-demand and from a smartphone, that model has its flaws. You have to reserve a car within rigid time slots, and someone may have booked the car you're driving for directly after you, meaning you have to return it abruptly. No-commitment subscriptions are something in the middle, potentially a new frontier that offers both the freedom of ownership and flexibility of renting.
Canoo, an electric vehicle startup based in Los Angeles, wants to offer cars that can be rented on a monthly basis. Unlike a lease, where you pay a set installment each month and are locked into a contract, Canoo's model is more like Netflix, where you pay an all-inclusive monthly fee for access to a vehicle (including charging and maintenance) only when you're sure you'll need it. If you decide you no longer need the car, you simply return it to Canoo and stop paying.
Flexibility is what's different here — These types of flexible models are more intriguing for city dwellers as the concept of multi-modal transportation rises in popularity. Today, people in urban areas might use multiple modes of transport to get to their final destination, such as riding a scooter from their front door to the train station a mile away. You mix it up depending on various factors: If you're cash poor but time rich, you'll take the subway over an Uber, or vice versa.
Time could be important if you're working on an urgent project or traveling and will want constant access to a private vehicle. In that sense, this Canoo car is a purely practical vehicle more than anything. You rent it only during the few times when you really need a private car.
This is for city folk — The Canoo isn't a personal item, and that's something you'd have to get over. You can't personalize the color, "unless it's black," the CEO joked in a video. While people in America are all about independence and owning their stuff, values are different everywhere and as people cram into urban areas, the lack of real estate is pushing municipalities to do everything they can to discourage single-passenger vehicles that take up tons of scarce space. Occasionally you really do need a private car, though, and this could be a nice compromise in those instances.
Zipcar recently began offering "Dedicated Zipcars" that allow members to rent cars on weekly or monthly bases for a flat rate. Members get their own dedicated parking spot and the car they choose is accessible only to them for a weekly or monthly duration. Jaguar Land Rover also recently began offering a subscription service that allows customers to rent cars on a short-term basis and swap them every six months. For auto companies, subscriptions could be attractive because they offer a recurring stream of revenue that never ends because whenever a customer stops paying, the car goes to someone else until the vehicle reaches end-of-life.
Zipcar's monthly subscription fee is about $700 for daily access or $300 if you just use the car on weekdays. Canoo hasn't made any announcements about its pricing yet and is still in the prototype stage.
Besides the unique business model, Canoo's electric car isn't anything super remarkable; it looks quite boxy and bland. It's not autonomous, though it's said to go 250 miles on a charge and the rear has been redesigned to have a more casual seating style:
Canoo, interestingly, will allow customers to personalize the cars somewhat with wrappings that can be easily removed. The company says the car will begin arriving to customers on its waitlist in 2021. Electric car companies seem to come and go often without making a sound, but Canoo recently signed a deal to co-develop its cars with Hyundai so it seems like this one might have a chance.