By Scott Hall, EVP of Operations, Swapalease.com

Ridesharing and mobility-as-a-service offerings continue to captivate consumer audiences everywhere, particularly in the automotive industry. Managing mobility and subscription programs is top of mind for automotive executives today, leaving many wondering how offering similar programs of their own might expand their competitiveness in the marketplace.

This is wise, considering the opportunity of program growth, as well as consumer demand. The recent Cox Evolution of Mobility study¹ found that four out of 10 people admit that access to transportation is important, but that doesn’t necessarily have to mean personal vehicle ownership. Another one-third say they are open to new transportation methods rather than owning their vehicle.

Public perception of transportation is changing. Consumers are looking for on-demand transportation options that don’t involve the vehicle they lease or own. This directly aligns with subscription-based services that have gained much popularity, like Hulu or Netflix in the entertainment industry.

Companies like BMW and Mercedes-Benz have been at the forefront of car sharing programs, rolling out their Share Now program, enabling users to share 20,000 cars in 30 cities across the world. While this may seem small, it’s a well-defined program that will only grow.

Lexus, Toyota, and Ford have all looked to join the car-sharing segment, understanding that consumer tastes are changing, and they need to develop programs with their dealers that meet these needs.

It’s not surprising that any of these brands are embracing subscription programs, as all have thrived under the earliest form of vehicle subscription, known as car lease transfers. These programs were developed more than 20 years ago when many consumers were looking for ways to rid themselves of their lease contract by transferring the lease over to someone else.

It feels like a subscription because the person getting out of their lease could walk away when they wanted, and a person taking over the lease could “subscribe” to that lease contract with remaining terms to suit their needs.

However, not all car brands have bought into the “subscription” mindset and may miss out on marketplace opportunities due to their inability to adapt to changing preferences and needs. Companies such as Honda/Acura, Nissan/Infiniti, and Hyundai/Kia are three of the more notable families. For years, each one has decided against the wishes of their drivers refusing to allow lease transfer subscription options, making it difficult for their drivers to enjoy what others have enjoyed for more than 20 years.

Lease transfer hasn’t hurt brands like BMW, Mercedes-Benz, Lexus, Toyota, and Ford. In fact, it’s just the opposite. Customers aren’t looking to escape the brand; they’re looking to escape the lease because a model no longer works for their changing lifestyle. These brands repeatedly enjoy higher brand retention compared with Honda, Nissan, and Hyundai, whose customers grow frustrated with their lack of transfer options and ultimately switch brands after their leases to avoid future frustrations.

It’s time for these brands to change their ways, fully embracing the freedom and flexibility their drivers have been asking for over the last two decades. Failure to do so will place them at a competitive disadvantage at a time when the broader industry is going through a much more elaborate evolution with complete dealer-enabled car-sharing programs.

1: “Retail Auto Sales to Drop Further as Alternatives to Ownership Become More Accessible and Affordable, According to Final Phase of Cox Automotive Evolution of Mobility Study”; January 17, 2019, Cox Automotive