Last week, GM announced it was suspending operations of its monthly premium subscription service BOOK by Cadillac.  GM and media sources cited the exorbitant costs involved with running such a service.

Source:  General Motors

This development is certainly disappointing, but entirely predictable, and arguably could have been prevented.  Car subscription services have their merit, but the target automakers must hit to justify the investment is extremely small.  In fact, less than 2 weeks ago, Strategy Analytics published a report on car subscription services which found that consumer interest is almost non-existent outside of a few key segments.

Monthly white-glove subscription services are one easy way for OEMs to leverage their assets to test new consumer-facing mobility models.  (Another common one is rent-by-minute car-sharing, such as Daimler's Car2Go and BMW's DriveNow/ReachNow.)  But as Strategy Analytics finds repeatedly in worldwide research efforts with mobility service users, cost remains king in terms of transport choice factors.  And current subscription services (tilted strongly toward the premium market) are prohibitively expensive for most segments.

As the industry becomes more anxious about the future of car ownership, more automakers are throwing stuff against the "new mobility" wall to see what sticks.  Certain questions drive these investments:  What, exactly, do consumers want?  How much would interested consumers pay for the service?  But most importantly, would learnings from on-road “beta tests” justify the costs of running such a service?  In the case of BOOK by Cadillac, a few pieces of "ideation-focused" consumer research could have answered the same questions much more easily, quickly, and cheaply.