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Subscription Economy

Cars we don’t own, don’t drive, and don’t take to the gas station

By Ji-Soo Kweon
Cars we don’t own, don’t drive, and don’t take to the gas station

Tesla’s subscription services hint at an exciting new future for the personal vehicle industry. 

 

If you’ve ever been a kid in the suburbs, you probably grew up with the notion that learning to drive and owning a car are important milestones to becoming a real adult etc. However, as the Millennial Generation came of age, the very idea of ‘ownership’ has become both undesirably impractical and prohibitively unaffordable, especially for big ticket items like houses and cars. In many places car usage is still an unavoidable necessity, in the absence of walking-distance amenities and satisfactory public transport networks, but if Elon Musk is to be believed, using a car may soon no longer involve either ownership nor actual driving. 

 

Tesla has been producing commercially available electric cars since 2008, and is one of the biggest names in the slow but steady worldwide push away from transport reliant on fossil fuels. The catch is that innovation often comes with a bit of sticker shock, and Tesla vehicles have until recently been an unattainable luxury for the average consumer. However, businesses and individual customers now have the option of ‘leasing’ Tesla vehicles; essentially paying a monthly subscription to rent either a single vehicle or a fleet, with the option of purchase at the end of the lease period for some models. 

 

In December Elon Musk announced a second subscription service would launch in early 2021 - Tesla’s Full Self Driving (FSD) feature, currently a $10,000 add-on, will also be available as a subscription service. This will make the software for autonomous vehicles one step closer to widespread, mainstream reality. 

 

Tesla’s FSD software is still a very early beta that is currently only available in the US, and requires the full awareness of fully licenced drivers behind the wheel at all times. However, the hope is that SaaS products like Tesla’s FSD will eventually lead to fully autonomous vehicles, which would make private vehicle usage far more accessible than at present. Our relationship with private vehicles is undergoing an undeniable evolution, which may result in cars that we neither own nor drive, but instead access through subscription. The car-sharing and ride-sharing industries have been growing as car ownership is on the decline, especially amongst younger people. 

 

The car-sharing industry has long embraced the digitalized subscription business model, ride-sharing services like Lyft, Via, and Uber have also begun to introduce monthly subscription services, which offer discounted rides and other benefits to members. Tesla’s subscription services represent another step away from traditional ideas of car ownership and usage and towards a personal vehicle scene open not only to people who can and can’t afford their own car, but also for people who can’t or won’t drive at all. 

Gray vector icon of a self-driving car with wifi insignia

 

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