Book by Cadillac Car-Subscription Service Predicts Booming Growth Over the Next Two Years
With companies like Uber and Lyft making their way to the forefront, many consumers are questioning whether or not they even need to own a car in the 21st century. Rather than rolling over and giving up, Cadillac created Book by Cadillac, a car-subscription service where consumers can rent the luxury brand vehicle at their leisure.
It appears as though the service is growing — and quickly — according to The Financial Times.
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By 2020, Book by Cadillac is expecting significant growth in the company’s demand. Just last month, it announced its expansion into metropolitan areas like Los Angeles and Dallas. This expansion is expected to boost its customer base tremendously.
Not only does this provide non-driving citizens with alternative transportation, but it also seems to be attracting otherwise inclined drivers to the Cadillac brand. “90 percent of [Book by Cadillac] customers in New York City have never owned a Cadillac,” explained GM Authority contributor Sean Szymkowski. “The significant take rate suggests opportunity, but not without new challenges in a redefined auto industry.”
In order to increase its profits, though, Book by Cadillac needs to increase vehicle availability. “If the services grow at the forecasted rates – over 40 percent of cars on the road subscribed to, rather than bought or leased – automakers will need to store plenty of cars if on-demand swapping is part of the platform,” said Szymkowski.
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The popularity of car-subscription services are thought to be increasing based on the depreciation that comes with the purchase of your own vehicle. When you drive a new car off the lot, it loses a large percentage of its value the moment the tires hit public road. By renting a luxury car for the week, consumers can experience that luxury lifestyle without making a seemingly loss-making investment.