Would you pay $1,500 a month to drive an Escalade whenever you want?

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(This post originally appeared on The Washington Post)

In what AdAge is calling a “Netflix for cars,” Cadillac has launched a program that it says is a “first-of-its-kind luxury vehicle subscription service.” The program is called Book by Cadillac and here’s how it works:

For starters, customers are no longer customers. They’re now “members.” A member pays a flat monthly fee of $1,500 (there’s also a one-time $500 initiation and processing fee).  For all this, the member gets unlimited access to several Cadillacs – from the V Series, XT5 and CT6 to an Escalade – for as long and whenever wanted. These same cars would cost between $60,000 and $100,00 if purchased outright, according to a Reuters report. The car is home delivered and the fee includes registration, taxes, insurance and maintenance costs. There’s no mileage limit and if you want out of the program you just have to give 30 days’ notice.

The company says this is not a traditional car-sharing service like Zipcar.  “Customers get to keep a car at all times,” a spokesman told Reuters.

“Book by Cadillac is an innovative new option targeted at a growing class of luxury drivers searching for access to various cars over time, dependent on their individual needs, coupled with a hassle-free white-glove exchange,” Uwe Ellinghaus, Cadillac’s chief marketing officer, said in a press release.

Sure, having access to any number of luxury cars could be a nice employee perk and an image-boost for a small business. But what’s really important to note is how traditional companies – a car manufacturer for example – are recognizing the need to build a community of members and create a committed long-term revenue stream from them in order to increase the company’s value and stabilize cash flow. The recurring revenue model which is based on a continuous service has proven successful for many of the world’s most profitable companies…both small and large.

It’s also a great way for a potential customer to test out a big ticket item before considering a future purchase. At least that’s what Cadillac is hoping.

The service is launching Feb. 1 in the New York metropolitan area with “other unspecified cities planned.”


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