GM Halts Pricey ‘Book by Cadillac’ Car-Swap Subscription Plan

Rent the Driveway for cars never took off the way Rent the Runway did for women’s fashion. So General Motors’ fledgling Book by Cadillac car-subscription service is a goner. Or, as GM said, it’s on “pause.” Cadillac was charging $1,800 a month for one tier with performance sedans, a midsize crossover, and the Escalade plus-size SUV. Subscribers could swap cars 18 times a year.

The demise of Book by Cadillac will have at least one important social benefit: the decline of the buzzphrase “curated” in relation to cars.

What Went Wrong: High Cost to Cadillac

Cadillac’s program was the most aggressive in offering a different car every three weeks, about as often as many people get their cars washed. Every time a vehicle came back, it had to be cleaned and detailed so it felt like new to the next driver. Scratches had to be buffed out, and minor body panel damage straightened out and repainted. Then the car had to be delivered to the next customer — “client” — and the old car brought back.

According to Mike Colias, who broke the story Friday in MarketWatch:

Some aspects of Cadillac’s program proved more costly than expected, people familiar with the program said. Snags with the back-end technology used to support the service made some customer-service functions tedious and time-consuming, adding costs for the company, these people said …. [and] the logistics of repairing damaged cars, cleaning them between uses and delivering them within 24 hours are tedious and expensive.

Cadillac’s problems were magnified because it offered such frequent car-swaps. There were little problems, such as when subscribers wanted the delivery guy to move the junk from one car to the next. That could mean a car seat, empty shopping bags in the trunk, water bottles, the contents of the glovebox, the parking pass tucked in the visor, and the nice pen that maybe fell between the seat and the transmission tunnel.

Then there was the inventory problem: If you wanted to have 50 Escalades available for, say, peak family summer vacation season, you might need to have 75 in the fleet. And when you’re paying $1,800 a month for a vehicle you could lease for $1,000 a month, the subscriber might get cranky if he or she wanted the car in deep metallic black and the closest model in inventory was midnight blue.

High Prices for Subscribers

With the priciest of the subscription services, often it’s 50 percent more than a lease, and in some cases, might be twice as much. “At these price points that we’re seeing, they [subscription services] make absolutely no sense,” Edmunds senior analyst Ivan Drury told Automotive News. He called them “a rich man’s toy.”

An Edmunds analysis says a three-year lease on an Escalade would be about $49,000 while the Escalade tier Book by Cadillac service would run almost $65,000 (36 months times $1,800). Book by Cadillac lets the buyer also choose ATS-V and CTS-V performance sedans, the CT6 sedan, and the XT5 crossover.

The price was typically the same anywhere in the country and often included insurance, all at one fixed price. So a risky driver in a big city might find the one-price-for-all cost wasn’t that bad if, say, he was already paying well over $3,000 a year in insurance.

Since then, automakers have dialed back some of their prices and offered lower pricing tiers with more mainstream vehicles. But it’s unclear if drivers want to pay enough extra to underwrite the back-end logistics.

This Is How They Fight Uber and Waymo?

In some ways, car subscriptions are the automakers’ attempt to deal with seismic changes in the business: Urbanites forgoing the purchase of cars now that Lyft and Uber offer a cleaner alternative to yellow cabs, and the prospect that self-driving cars in 10 to 15 years will sharply cut the number of cars sold from about 17 million annually.

Many of the automakers handle the enrollment directly and the transactions via a smartphone or web app. Pricing is fixed, so there’s no need to dicker. The dealer loses profit in some cases, which makes them gripe, and eventually th,e automakers and dealers work together although each side harbors (legitimate) concerns: That too many car dealers treat customers poorly, and too many automakers are clueless about the customers’ needs.

One finding is that many people need a car for a couple months, for instance at a distant vacation home and they don’t want to drive there, or when the car is in the body shop. And this is still a big city concept. Book by Cadillac, for instance, was only offered in New York, LA, and Dallas.

Will Volvo Buck the Trend?

Volvo hopes its Care by Volvo program will succeed because it’s simple and doesn’t allow a lot of vehicle swaps. It’s a two-year program with a car swap allowed at 12 months or thereafter. So it’s effectively a pair of one-year leases strung together. And it’s not a lot more than for a regular lease. A subcompact Volvo XC40 crossover (image above) runs $600-$700 a month depending on the engine.

The Volvo program is comprehensive: the car, maintenance, roadside service, Liberty Mutual “premium insurance no matter where you live,” a 15,000-mile driving allowance, and $1,000 in forgiveness in body damage and/or mileage overages.

There are also subscription services for recent-model used cars, such as Canvas by Ford Credit, and non-automaker/dealer programs that let you swap among multiple brands. Other automaker programs include Porsche Passport, Mercedes-Benz Collection, and Access by BMW.

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