By on September 12, 2019

Just a short time ago, vehicle subscription services were hailed as the second coming, permitting drivers the freedom to select from a range of vehicles for a single monthly payment. Proponents touted it as a way for manufacturers to display their wares and for buyers to sample a wide array of cars. Opponents said OEMs could potentially lose money by having all these used cars on hand.

It would seem the latter is beginning to prevail with a cadre of companies getting out of the subscription game faster than an aging athlete getting traded to another team. Fair, the $1.2 billion startup company backed by SoftBank, just picked up Canvas from the Ford Motor Company.

Canvas, in case you have forgotten, was a vehicle subscription company based in (where else) San Francisco as a subsidiary of the Blue Oval. It was directed at consumers looking for an alternative to car ownership, offering subscription terms of as little as three months to provide the use of a car bundles with insurance and maintenance. It was founded less than three years ago.

Fair itself is billed as a “forward-thinking alternative to traditional car ownership”, so the purchase makes sense if the company is seeking to expand its footprint or simply quash a competitor. The company’s website currently offers options ranging from a 2015 Ford Fiesta for $150 a month to a 2018 Mercedes-Benz GLE 350 for $800/mo.

Alert readers will note these are not brand-new cars. That Fiesta includes a dose of warranty and routine maintenance with “no long-term contract and the freedom to walk away at any time.” An upfront fee is due at signing and the car is registered to you as Lessee.

Ford says Canvas provided vehicles for about 3800 subscribers in San Fran, L.A., and Dallas. Fair, meanwhile, got its start four months earlier than Canvas in 2017. Despite the small differential in age, Fair has found much more success, rapidly growing its subscriber base to more than 45,000 customers across 30 markets. Existing customers of Canvas will be ported to Fair and the sale apparently includes all the cars.

Count this as yet another nail in the coffin of OEM subscription services, schemes which seem to blow through new cars leaving a trail of depreciation in their wake. An argument can be made that customers who use these services don’t care if they’re driving a new car, explaining the success of Fair versus some manufacturer programs.

Ford CEO and noted sunhat enthusiast Jim Hackett has explained in the past that not all bets made by the company will pay off, including a shuttle service called Chariot that it binned last year after sinking $65 million into buying it in 2016.

 

[Image: Ford]

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