Porsche is expanding its app-based vehicle subscription service to four new cities in the U.S. and Canada, deepening its experiment in flexible car ownership even as other automakers back away.
The luxury sports-car brand of Volkswagen Group is adding Las Vegas, San Diego, Phoenix and Toronto to the pilot program it started in Atlanta almost two years ago. The price of its two-tiered monthly subscription service, Porsche Passport, will increase $100 to as much as $3,100 a month. Porsche Drive, a shorter-term program, has a four-hour minimum that costs as little as $269.
Automakers are dangling subscriptions to try to reach younger consumers accustomed to streaming movies on Netflix or summoning rides from Uber, with mixed results. While Porsche and Mercedes-Benz are expanding their tests, General Motors suspended its Book by Cadillac subscription service in December ahead of a planned revamp and Volvo Cars is battling California car dealers over its Care by Volvo program, which combines lease, insurance and maintenance into one monthly payment.
“It’s not fundamentally a cheaper way of consuming your mobility,” said Mark Wakefield, head of the automotive practice at consultancy AlixPartners. “There has to be enough people that want to pay for the convenience factor.”
Most subscription services cost more than a comparable three-year lease, which limits their growth potential, according to a study that car-shopping researcher Edmunds released last year.
That may not be a problem for a brand like Porsche. The $2,100 tier of Porsche Passport is 20 percent more expensive than leasing a Porsche for three years, the automaker said. Still, 180 people subscribed over the course of two years, 80 percent of whom had never owned one before. Typical users were in their mid-40s, eight years younger than the average Porsche owner.
“The question is not a bookkeeping exercise or accounting; the question is how much are you willing to pay for that much freedom?” said Klaus Zellmer, head of Porsche Cars North America. Zellmer said in January that Porsche would expand the program to four cities, but did not identify them at the time.
Monthly subscribers can drive as many as 20 different model variants, have vehicles delivered to them, and only pay for gas, after a $595 one-time activation fee. Insurance and maintenance are included. Porsche chose the four additional cities based on their support of the brand and the company’s expectation of interest.