Car shoppers now have several new options to avoid long-term debt and commitments. Automakers and startups alike are increasingly offering services that give buyers new opportunities and greater flexibility around owning and using vehicles.
In the first part of this feature, we explored the different startups attempting to change car buying. But not everyone wants to buy a car. After all, a vehicle traditionally loses its value at a dramatic rate.
Some startups are attempting to reinvent car ownership rather than car buying.
My favorite car blog Jalopnik said it best: “Cars Sales Could Be Heading Straight Into the Toilet.” Citing a Bloomberg report, the site explains automakers may have had the worst first half for new-vehicle retail sales since 2013. Car sales are tanking, but people still need cars.
Companies like Fair are offering new types of leases combining a traditional auto financing option with modern conveniences. Even car makers are looking at different ways to move vehicles from dealer lots.
Fair was founded in 2016 by an all-star team made up of automotive, retail and banking executives including Scott Painter, former founder and CEO of TrueCar.
Over the past year, Songtrust has added another 55,000 artists to its rights management service.
The company, a subsidiary of Downtown Music Publishing, a publishing and rights management firm that manages rights for artists such as John Lennon, One Direction and Santigold, now has 205,000 artists on its roster and has 2 million songs it tracks.
The company has also opened three offices in Atlanta, Los Angeles, and Nashville to complement existing locations in New York, London and Amsterdam.
The company’s growth follows that of a music industry that continues to enjoy a renaissance (at least in terms of dollars spent).
The global recorded music market grew 9.7% in 2018 to $19.1 billion, according to data from the International Federation of the Phonographic Industry (which has been tracking the industry since the days when the dominant technology was the record player).
Much of that growth is now coming from streaming, the IFPI reports, with streaming revenues growing 34% year over year and accounting for 47% of total revenue thanks to paid subscription services. There were 255 million users of paid services by the end of 2018 — and Songtrust can attribute much of its growth to the opacity in how that money makes its way back to artists.
Increasingly, those artists are having to track their performance in international markets as well. Latin America continues to be the fastest gorwing region for music consumption, followed by Asia and Australasia. Most of that growth is due to K-Pop, since South Korea accounts for 17.9% growth in money spent alone.
All of this movement shows no sign of abating, according to the bankers that track these kinds of things. Goldman Sachs recently projected that the industry could grow to over $130 billion in revenue over the next decade.
U.S. consumers are still embracing subscriptions. More than a third (34%) of Americans say they believe they’ll increase the number of subscription services they use over the next two years, according to a new report from eMarketer. This is following an increase to 3 subscription services on average, up from 2.4 services five years ago.
The report cited data from subscription platform Zuora and The Harris Poll in making these determinations.
The study also debunks the idea that we’ve reached a point of subscription fatigue.
While only a third is planning to increase the number of subscriptions — a figure that’s in line with the worldwide average — the larger majority of U.S. internet users said they planned to use the same number of subscriptions services within two years as they do now.
In other words, they’re not paring down their subscriptions just yet — in fact, only 7 percent said they planned to subscribe to fewer services in the two years ahead.
However, that’s both good news and bad news for the overall subscription industry. On the one hand, it means there’s a healthy base of potential subscribers for new services. But it also means that many people may only adopt a new subscription by dropping another — perhaps to maintain their current budget.
Subscriptions, after all, may still feel like luxuries. No one needs Netflix, Spotify, groceries delivered to their home or curated clothing selections sent by mail, for example. There are non-subscription alternatives that are much more affordable. The question is which luxuries are worth the recurring bill?
The survey, however, did not define subscription services, which could include news and magazine subscriptions, digital streaming services, subscription box services, and more. But it did ask about consumers’ interest in the various categories.
Over half of U.S. consumers (57%) said they were interested in TV and video-on-demand services (like Netflix) and 38 percent were interested in music services.
Related to this, eMarketer forecasts U.S. over-the-top video viewers will top 193 million by 2021, or 57.3 percent of the population. Digital audio listeners will top 211 million by the same time, or 63.1 percent of the population.
The next most popular subscriptions in the survey were grocery delivery like AmazonFresh (32%) and meal delivery like Blue Apron (21%). Software and storage services like iCloud and subscription beauty services like Ipsy followed, each with 17 percent.
Consumers were less interested in subscription news and information and subscription boxes — the latter only saw 10 percent interest, in fact.
The figures should be taken with a grain of salt, of course. The meal kit market is actually struggling. The consulting firm NPD Group estimated that only 4 percent of U.S. consumers have even tried them. So there’s a big disconnect between what consumers say they’re interested in, and what they actually do.
Meanwhile, the supposedly less popular news and information services market is, in some cases, booming. The New York Times, for instance, just this month posted a higher profit and added 223,000 digital subscribers to reach 4.5 million paying customers. And Apple now has “hundreds of people” working on Apple News+, it said this week.
Of course, consumers will at some point reach a limit on the number of services they’re willing to pay for, but for the time being, the subscription economy appears solid.
What’s the cord-cutting equivalent to ditching your kitchen? Uber’s upcoming subscription to unlimited free food delivery. Uber is preparing to launch the $9.99 per month Uber Eats Pass, according to code hidden in Uber’s Android app.
The subscription would waive Uber’s service fee that’s typically 15 percent of your order cost. Given that’s often $5 or more, users stand to save a lot if they order in frequently. But Uber could still earn money on menu item markups, cover costs with a flat order fee that protects against someone ordering a single taco, and most importantly, build loyalty and scale at a time of intense food delivery competition.
The Uber Eats Pass was first spotted by Jane Manchun Wong, the notorious reverse engineering specialist who’s become a frequent TechCrunch tipster. She managed to generate screenshots from Uber’s Android app code the reveals a prototype of the feature. “Get free delivery, any restaurant, any time” is says, showing the amount of money you could have or already saved.
A Uber spokesperson did not dispute the legitimacy of the findings and told TechCrunch “We’re always thinking about new ways to enhance the Eats experience.” They declined to provide further details, which could hint that a launch is imminent but some details are still subject to change. For now we don’t know exactly what perks come with an Eats Pass or where it will be launching first.
At $9.99 per month, the Uber Eats Pass would cost the same and work similarly to Postmates Unlimited and DoorDash DashPass. If they all seem like good deals, you see why they’re less about immediate revenue and more about customer lock-in. You’re a lot less likely to order GrubHub or Caviar if you’ve already pre-paid to cover your Uber Eats delivery costs. And whichever apps emerge from this battle will have instituted the scale and steady behavior to raise prices or just enjoy large lifetime value from each subscriber.
Exploring new business opportunities could help perk up Uber’s share price which closed at $41.50 today two weeks after IPOing at an opening price of $42. There are fears that intense competition across both ride sharing and food delivery could make for an expensive road ahead for the newly public company. Any way it can gain an edge on its rivals keep users from straying to them is important. The logistics giant is already experimenting with allowing restaurants to offer discounts in exchange for promoted placement in the app, which is the first step to Uber becoming an ads company where businesses pay for extra exposure.
If Uber combined Eats Pass with its car service subscription Ride Passes, you have the foundation for a sort of Uber Prime experience — one where you pay an upfront subscription fee that scores you perks and discounts but also makes you likely to spend a lot more on Uber. That bundle could be even more central to Uber than Amazon, which has few direct rivals in the west. People will need to eat and get around for the foreseeable future. Subsidizing loyalty now could be costly in the short-term, but poise Uber for years of lucrative business down the line.