By Rob Preston
One blue-chip company that aims to generate progressively bigger chunks of its revenue from subscriptions is automaker General Motors.
GM sees itself becoming less of a manufacturer and more of a service provider over time mainly in three areas: connectivity (OnStar and related telemetry/diagnostic services), “urban mobility” (services related to GM’s US$500 million investment in on-demand ride-sharing company Lyft), and autonomous vehicles.
A clever new GM subscription service that falls into the urban mobility realm is Book by Cadillac, which for US$1,500 a month and a US$500 initiation fee gives members in New York no-hassle possession of a current-year XT5, CT6, Escalade, or V Series Cadillac. Registration, taxes, insurance, and maintenance costs are included in the monthly subscription fee, and there’s no limit on mileage and no commitment to lease, finance, or buy the vehicles.
Book members can cancel at any time, and they can exchange their vehicles—ordered from an app and delivered from select locations via a “white glove” concierge service—as their needs change, notes Uwe Ellinghaus, chief marketing officer at Cadillac. Need to take your daughter back to college? Order an Escalade for the haul. Got the urge to hit the open road to take in the fall foliage? Try a V Series convertible for a few weeks. Customers can exchange their Cadillacs as many as 18 times within a 12-month period.
Under the initial phase of the Book program, which GM plans to expand to other major US cities, GM and its Cadillac division are maintaining a small fleet of cars and SUVs to serve dozens of clients, hoping to entice first-time drivers of the luxury models. As such, the subscription service is intended to augment the sales of Cadillac’s dealers, not cannibalize them.
Illustration by Wes Rowell
Rob Preston is editorial director in Oracle's Content Central organization, where he provides insights and analysis on a range of issues important to CIOs and other business technology executives. Rob was previously editor in chief of InformationWeek. You can follow Rob on Twitter at @robpreston.