INSUBCONTINENT EXCLUSIVE:
The way we get around is changing fast
Between ride services, on-demand car sharing and other methods to have a car only when you need it, owning one is getting less and less
A new startup called Carma offers a happy medium for those who want the convenience of owning a car without the hassle of, well, owning a
Instead, you just subscribe to it.Carma launched publicly today at the Startup Battlefield at TechCrunch Disrupt SF 2018
Its system is more flexible than a lease, cheaper than hourly or daily car-share services and precision-targeted at millennials (whatever
those are) and dealerships.It works like this: You pick from a variety of new and newish vehicles sourced from the inventory of car
For a set monthly fee you basically get to treat it like your car
Insurance is included, as is ordinary maintenance — you&re mainly on the hook for gas and a few incidentals.Keep paying for as many months
as you like, or just one, and when you don&t need the car any more, just give it back to the dealer
Boom, you&re car-free again.The assumption is that there a considerable population of people who are caught between the high-cost,
low-commitment world of car and ride sharing and the variable-cost, high-commitment world of ownership
They don&t want to have a $20,000 asset sitting around doing nothing but costing money, but they also don&t want to pay through the nose
every time they want to go more than a mile or two
Where the medium-cost, medium-commitment option That where Carma intends to fit in.&If you&re looking for a week, or a trip, there are a lot
of good options that are for fractional use, by the mile or the minute, or daily rentals,& explained founder and CEO Azarias Reda in an
&This is for someone who needs a car on a daily basis.&
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Young, flighty, commitment-averse
millennials are the prime demographic, he noted: &Millennials are the biggest consumer of leases
They&re already driving this notion of ‘I want to access this vehicle but not necessarily own it.& Subscriptions combine those
desires.&Ultimately the cost is more per month than a lease or ownership, but if what the driver values is flexibility, there no
comparison.More importantly, it a great option for dealerships
These places have all kinds of inventory sitting around that could be deployed in whatever manner they see fit: a couple for extended test
drives of new models, a few older ones paying their way despite being the last four on the lot from last year, a different way to monetize
overnumerous used vehicles, and so on.It not the only one — Fair and FlexDrive are startups with similar aspirations and are already on
And some car manufacturers offer specific, though often luxury-oriented, medium-term subscriptions
Carma, however, is taking a slightly different tack
While those services are direct to consumers, Carma aims to be a white-label backend for similar services branded and operated by local
dealerships and finance outfits.Carma tested the consumer model but found there was friction from usurping the place of primacy for drivers
from the dealers themselves
After all, your local Subaru dealer doesn&t just want to be a lot filled with cars — they want to be a known, local presence and trusted
maintenance partner to their customers.So the deal would be that Carma provides all the infrastructure as far as handling insurance, fleet
tracking, user agreements and billing, but it all takes place through an app specific to a dealer or group of them
It allows that direct connection between driver and dealer to stay in place while offering the benefits of subscription to both parties
Dealers would pay a monthly license fee based on the size of the fleet.Organizations that manage leases could also be the client, providing
the subscription possibility to multiple dealers they work with
This is the case in one of Carma early deployments in Canada, where a leasing outfit with more than a billion dollars (Canadian, naturally)
in lease originations has launched its own branded subscription service, AutoONE.Allowing the dealers to keep their pride may be a serious
advantage over national or international branded services that treat them like inventory management modules
And the mobility market is large enough, of course, that several services should be able to compete alongside one another with variations in
offerings and inventory.After all, why pay for a service with built-in insurance if your job pays for it Alternatively, why have your own if
you can get it month by month for a few bucks more Want to switch your car every month Want to pay less to be limited to models three years
old and back These variations will certainly all be put into play.Reda comes from a computer science and fleet management background at the
University of Michigan, where of course some of the sharpest minds in automotive tech can be found
The company is a Techstars alum and is backed by them, Fontinalis, Kybba, Right Side Capital, and IDV — terms undisclosed for now.The
mobility space is evolving fast, and it companies like these that keep that evolution rolling along.
