Car subscriptions Gaining Ground in the US

FACTS

  • The car subscription app Fair just bought out Canvas, subsidiary of Ford Motor Credit.
  • This Unicorn, funded by Softbank among others,
  • Through this buyout, Fair gets hold of Canvas’s user base: 3,800 people in Los Angeles, San Francisco and Dallas.
  • Canvas will still be active throughout their integration with Fair, before being terminated.
  • Canvas’s customers may renew their contracts directly with Fair when their current offer comes to an end.
  • The terms and amount of this buyout haven’t been disclosed.

KEY FIGURES

2017: Fair app launched

$1.2B raised from Softbank

45,000 customers (mostly in the US)

3.2B app downloads

30 markets

CHALLENGES

  • Building an industry leader. With this acquisition, Fair may secure their leadership with an app for flexible car rentals and sales. Their success stresses customers' expectations and interest in flexible services for getting access to cars.
  • Fair is also provided access to another technology and to hiring talents in a high-potential geographical area.

MARKET PERSPECTIVE

  • This buyout doesn’t mean that Ford are losing interest in new car consumption models, but it still stresses difficulties faced by car makers in featuring sustainable services likely to achieve critical use rates and become profitable.
  • Ford may keep working with Fair on some projects, as their successful model might inspire the car maker.
  • All car manufacturers are more or less successfully testing subscription models. Just like Ford, some decided to discontinue their experiments for lack of finding relevant business models (e.g.: Book by Cadillac).

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