The future of car ownership: Cars-as-a-service
It’s Mobility Day at TechCrunch, and we’re hosting our Sessions event today in beautiful San Jose. That’s why we have a couple of related pieces on mobility at Extra Crunch.
First, our automotive editor Matt Burns is back with part two of his market map and analysis of the changing nature of how consumers are buying cars these days. Part one looked at how startups like Carvana, Shift, Vroom, and others are trying to disrupt the car dealership’s monopoly on auto sales in the United States.
Now, Burns takes a look at how startups like Fair and premium automakers like Mercedes are disrupting the very notion of owning a car in the first place. Rather than buying a car or leasing one, users with these new services are asked to subscribe to their cars, giving them the flexibility to get a car when they need it and to get rid of it when they don’t. Fair has raised $1.5 billion in venture capital, so clearly the space has caught the eye of investors.
“In simple terms,” co-founder and then CEO [of Fair] Scott Painter, told TechCrunch following its recent raise, “for every dollar in equity we unlock $10 in debt, and we borrow that cash to buy cars.”
Fair works much like a traditional lease with more options. Users can drive the vehicles as long as they’re paying for them and can switch to a different one whenever. This is different from a traditional lease where the buyer is often locked into the vehicle for two to four years. The model makes Fair an excellent option for Uber and Lyft drivers, and in the last year, Uber sold fair its $400 million leasing business to accelerate this offering.
Meanwhile, on the other side of the world, our China tech reporter Rita Liao takes a deeper look at the quickly changing tides of the ride-hailing industry in China. It’s a fight between intermediation, disintermediation, and who ultimately owns the ride-hailing consumer. As transit in China and the rest of the world increasingly becomes multi-modal, who owns the gateway to figuring out the best method and paying for it is increasingly in the driver’s seat: