Automakers Can't Give Up The Idea Of Turning Everyday Features Into Subscription Services With Fees

from the pay-more-for-the-same-product dept

At the same time car companies are fighting the right to repair movement (and the state and federal legislation popping up everywhere), they’re continuing the quest to turn everyday features — like heated seats — into something users have to pay a recurring fee for.

In 2019, BMW had to abandon a plan to charge $80 per year for Apple CarPlay. The company, having learned nothing, began floating the idea of charging a subscription for features back in 2020, when it proposed making heated seats and heated steering wheels something you pay a permanent monthly fee for. Last December, Toyota proposed imposing a monthly fee for customers who wanted to be able to remotely start their vehicles.

Each and every time these proposals come forward the consumer response is swift and overwhelmingly negative. But with $20 billion in annual additional potential revenue on the table between now and 2030, the industry seems poised to ignore consumers:

“Still, automakers see dollar signs. Stellantis (formerly Fiat Chrysler), Ford, and GM each aim to generate at least $20 billion in annual revenue from software services by 2030. Over-the-air capabilities open up huge opportunities for carmakers to introduce new subscription or pay-per use features over time, Wakefield, of AlixPartners, said. Someday, you may be able to fork over extra to make your car more efficient, sportier, or ? in an electric vehicle ? unlock extra range for road trips.”

Keep in mind these are decisions being made during a pandemic when most households continue to struggle.

This sort of nickel-and-diming works well in the telecom sector where captive subscribers often can’t switch to a different competitor. But in the auto space, companies risk opening the door to competitors gaining inroads by… not being nickel-and-diming assholes. Many companies may also be overestimating their own product quality; one JD Power survey found that 58% of people who use an automaker’s smartphone app wouldn’t be willing to pay for it. At the same time, as with gaming microtransactions, if enough people are willing to pay to make it worth it, it may not matter what the majority of car consumers think.

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Companies: ford, gm, toyota

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Comments on “Automakers Can't Give Up The Idea Of Turning Everyday Features Into Subscription Services With Fees”

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James Burkhardt (profile) says:

The less charitable read....

Yesterday, I provided the charitable read of kia & subaru’s choice to disable telematics in the face of right to repair.

Today the less charitable read.

We want to sell access to the telematic stream piecemeal, we don’t care about security at all, and right to repair might also mean we can’t stop owners from turning on those functions.

TFG says:

Re: Re: The less charitable read....

And then doing the same for your trusted inner circle of people who you know won’t tell Big Brother Auto Maker.

Then someone will let the cat out of the bag and the automakers will be flabbergasted that anyone would dare flout their cash grab, and they’ll try and enforce against it with more DRM and probably use the MPAA / RIAA playbook in terms of legal action… this song and dance gets tiresome.

Notice to the makers: I would absolutely download a car if it were an option.

This comment has been deemed insightful by the community.
TFG says:

Knock-on effects - driving used car usage

This type of behavior will just drive demand for used cars, which don’t have the bullshit. The existence of those used cars (like a 2011 Ford Focus with gasp heated seats) and the memory of customers that last year’s model didn’t have the nickel and diming nonsense is going to continue to engender rampant dissatisfaction with these efforts.

It’s also going to drive "car hacking" – people are going to look into and find ways to enable these features and disable the "check-in" items that prevent them from working. Given the notoriously insecure systems in vehicles, I imagine this won’t be overly difficult – frankly, I find it entirely ridiculous, from a security standpoint, that the core operational aspects of a vehicle can be accessed via OTA connections.

It’s just asking for someone to start causing car crashes, for whatever reason they can come up with.

TaboToka (profile) says:

This is already in effect

My 2017 Subaru has a OnStar (or whatever it is called) system that included a free subscription when I bought it. I never used it and ignored the postcards they kept sending me about how it would be great to sign up for a subscription!!!! Think of what might happen if you were in an accident and you needed help!!!!

Yeah, I have a cell phone that does all that and more, so no thanks.

If my next car wants to charge for something, then I’ll either bypass it or ignore it. I couldn’t care less about heated steering wheels or car apps (that have the worst UX possible).

This comment has been deemed insightful by the community.
James Burkhardt (profile) says:

Re: This is already in effect

OnStar has never been a non-subscription service. Its a third party subscription service. A new purchase comes with free time, but it was never a buy once feature.

By contrast, the features being discussed, like electric car range or combustion Engine efficiency, would be considered buy once features. You could choose to make an upgrade in post, but you don’t have to keep paying for that upgrade the next month.

This is literally the "This guy has an iphone, why can’t he afford food?" One time purchases are not comparable to ongoing reoccuring expenses.

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Koby (profile) says:

Re: This is already in effect

OnStar does potentially have some "useful" features, such as GPS location and a kill switch. I had a coworker who had her vehicle carjacked shortly after purchasing it. She was able to get OnStar remotely activated, gave the precise location to the authorities, and then killed the engine as they moved in to make an arrest.

Most of these other features, however, have nothing to do with networking, and are simply a money grab.

This comment has been deemed insightful by the community.
That Anonymous Coward (profile) says:

I await the first lawsuits when the "cloud" fails to activate a feature a customer needs in the face of death.

As the cool kids say, discovery will be lit.

Because you know auto companies tend to employ those who can think like 12 yr olds and explain that no matter how cool & money saving it might be, using 12 layers of saran wrap as a windshield won’t fly… so there will be memos and emails where people question the need to tie core features into the cloud & explain the downsides they can see.

Huh… I know I can go and purchase a remote start kit for my car (cause its a certain age) do these newer cars shut that door with their secrets? Cause antitrust is the flavor of the moment & an entire industry shutting out those who would offer competing products for a single fee rather than a forced subscription model would seem like a huge abuse of their market position to protect profits.

Of course one does wonder other than a monthly bill what benefit there is for those who pay?
If you want me to keep paying to use the service are you extending the repair window on my heated seats?
What is the refund policy if I end up moving middle of the month to AZ and no longer would need heated seats?
What is the cost savings for consumers who don’t want these extra features added to their car if they have no intention of using them?

‘Merika where we just put a credit card swipe next to everything, because no only is the guac extra so is the salt, pepper, napkin….

Anonymous Coward says:

Re: Re:

‘Merika where we just put a credit card swipe next to everything, because no only is the guac extra so is the salt, pepper, napkin….

Or as the cool kids say: Late Stage Capitalism.

When the companies decide it’s time for rent seeking, nothing will stop them short of being stripped of their power over the market by force.

To do anything less is just turning the country’s entire economy into a sham poised to collapse at a moment’s notice. (E.g When people finally realize that their constant payments provide no value.)

scotts13 (profile) says:

Getting ready for the billing of the future

I work for a Stellantis (formerly Chrysler) dealership. We are under huge pressure to sign customers up for their "connected services" trial. To the extent that, if we fail to grab their smartphone and CONFIRM they’ve installed the remote control app and activated it, the dealership is fined. In reality, if left on their own, only about 20% bother signing up. Three guesses why this is…

TFG says:

Re: Getting ready for the billing of the future

I work in the support sector for the automotive industry – you may or may not have used RouteOne.

Suffice to say, I’m entirely unsurprised that the financial arms of these manufacturers are being dicks in this fashion, just from my limited interaction with how idiotic the whole setup is.

OGquaker says:

Re: Great idea.

20 years ago the janitor saw that i had sold some old Star Wars junk & had 21k, so he took me to a lot in the San Fernando Valley during lunch. A packed acre of bumper-to-bumper high-end white cars, all out for the LAPD "air-units" to see. Any car on the lot, $10k, paperwork guaranteed. White? "Easier not to change paint booth colors".

Anonymous Coward says:

Re: Re:

Back in the day, auto makers were adding electric "automatic seatbelts" for their various models. I was shopping for a car at the time, and I told the salesman that I would categorically not consider any car that had them.

I was by no means unique.

Today, you don’t see them, and you do see airbags.

Subscription service to your car is the Automatic Seatbelts of today. Auto makers will find stock sitting on the lot, as consumers reject them en masse.

Anonymous Coward says:

My next car

The next time I am compelled to buy a new car (likely due to gas availability), I will be insisting that all radio-control options be hardware-disabled. Including remote start, remote locks, and especially remote firmware update.

Yes, I won’t have an "entertainment console" to keep me watching something while at a stop light or rest stop. I won’t be able to warm up the car without actually using a key to unlock the door, and another key to "turn on" the car. I’ll have to go to the dealer if there is a recall on the power handling system.

None of that is necessary to the primary reason you have a car in the first place.

And yes, get off my lawn. It’s not a parking lot.

ECA (profile) says:

Old School

From the era that computers didnt do anything you Dint program them to do.
Now,you cant even get a Manual transmission unless you get the Cheapest cars.
When the radio was the tech in the car, and adding Extra Foam in the Cab so you could HEAR the radio was high tech.
There used to be a law about HOW much you had to Hear from Inside a car. What happened to that?

Anonymous Coward says:

Re: Re: Re:

Boomers: "You broke my window!?!?!?!" Backhands and whips out the belt.

Millennials: "I can’t open the McDonald’s app at a red light anymore?!?!?!" Backhands and whips out the hand.

Gen Z: "I have to pay $X000.00 to tow the car because you broke the infotainment console?!?!?!?!" Long winded story about how mom is going to kill them.

Anonymous Coward says:

I won’t pay for ‘extras’ that are already in the car and equipped. Either they will continue not to work and I’ll look next time at a different maker, an older car, or a way around the BS.

I refused to use Sirius for the same reason. I am quite capable of listening to my own music or just listen to a earthside radio station. I won’t pay for Sirius. Nor will I pay for GPS activation as a subscription. I have my own GPS and they can go suck it for more money since the one I own does not require more money.

If I want remote start, third party will install it for me. No more money will be needed.

To make a long story short, I’ll walk rather than pay more.

sumgai (profile) says:

Re: Future Prediction

… scientists may be able to invent a way to manufacture automobiles that do not require microprocessors.

Speaking as the fucktard that I am, they don’t need them now. Microprocessors are simply a revenue stream, a very profitable one at that. This business of "buyer’s convenience", "features", "luxury", or the one that really bugs me, "driver safety", that’s all bullshit. If you need to be pampered, then do it outside of a 2 or 3 ton mobile killing machine.

And for Gawd’s sake, don’t drive like a waste of oxygen… enough other people are already doing that, don’t unbalance the equation any further.

nasch (profile) says:

Re: Re: Future Prediction

Someday, in the future, scientists may be able to invent a way to manufacture automobiles that do not require microprocessors.

Only if there’s a civilization-ending apocalypse in the interim.

they don’t need them now.

Yes, they do. "ECU" stands for "engine control unit". Even if there is not a single screen visible to you, there are computers controlling the engine and (if automatic) transmission. Electric cars have computers monitoring and adapting to changing battery conditions and charge levels. The only way to ditch microprocessors entirely is to go back to carburetors, and good luck meeting emission standards with those.

PaulT (profile) says:

Re: Re: Re: Future Prediction

It seems to me that some people approach electronics in cars the same way they do computers in other parts of life. If they don’t understand what something does, then it’s not doing anything useful, and if something similar existed before, then the new stuff isn’t necessary.

They’re not interested in understanding why the electronics are in their new car, they just have memories of working an a car from the 50s as a kid and lament the fact that they can’t open up the hood and poke around on their new car.

sumgai (profile) says:

Re: Re: Re:2 Future Prediction

Paul, you’re close to correct, I did do that tinkering in the ’50s as a kid! But I also remember Chevy coming out with fuel injection in 1957, first on a Corvette, then spreading out to other models in later years. Hell, the Europeans had timed fuel injection well before Chevrolet. And as to the business of "clean", yes the computer makes that simple as apple pie, true. But it can be done without, if one wishes to suffer through the difficulties.

Please understand that before I went to law school, I had already earned my EE degree. I pretty emphatically do understand electricity, electronics, computers, and a great variety of disciplines that fall under that rubric. And it should not need saying that I’m about as free from fear of these as a frog is of feathers.

nasch, thanks for the tip. ๐Ÿ˜‰

p.s. Opening up the hood has been replaced by the OBD port. Certainly cheaper in most cases, potentially even more fun, and much easier on an old man’s back. ๐Ÿ™‚

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