from the pay-extra-for-seatbelts dept
If you’re a publicly traded company, it’s not enough to make a decent profit selling products people like. You have to deliver endless quarter over quarter improvements to please investors. So countless companies engage in an act of self-cannibalization, where they begin to cut back on things like customer service (see: U.S. telecom), or annoy their customers with obnoxious cash grabs.
Case in point: companies like BMW just really can’t give up their dream of turning everyday, basic features, into subscription services. Service fees they can, consistently and mysteriously, nudge ever skyward. In several countries, that has taken the form of charging customers upwards of $18 per month just to enjoy heated seats they technically already own:
As cynical as that might sound, Korean owners aren’t forced to pay monthly for heated seats, or any of BMW’s other available options, but monthly payments can be made to try those out. Heated seats, for instance, cost ₩24,000 (roughly $18) per month. But you can also pay for a year subscription ($176), a three-year subscription ($283), or you can buy the heated seats permanently ($406).
The heated seat subscription option is part of the company’s “Connected Drive” program, and is already reality in Korea, the UK, New Zealand, Germany, and South Africa. It hasn’t come to the U.S. yet, but it’s fairly obvious that it’s likely to, eventually.
In this case, the technological capacity for heated seats already exists in the car. The manufacturer has already factored these costs into the base price. And they’re effectively charging you a premium simply to turn on technology that already exists and, frankly, you’ve probably already paid for:
That opens the door to an arms race with hackers and modders, with the right to repair (something you already own) debate waiting in the periphery. And the FTC watching you like a hawk, waiting to see if companies make enabling something you already own a warranty violation.
As cars get smarter and more complicated, the potential for nickel-and-diming your customers for services that should come as part of standard packages will only increase. If done reasonably, the company would really only be shifting the costs from one premium package to a subscription service.
But the need for quarter over quarter returns means they’re incentivized to never stop pushing their luck. So what you wind up getting is dumber and more annoying price gouging until either regulators or consumers say they’ve had enough. And even then, Wall Street still usually gets what Wall Street wants.