Ford’s backing of vehicle-leasing startup Canvas shows how our needs and wants are changing
The Ford Motor Company’s recent backing of Silicon Valley vehicle-leasing startup Canvas is another sign of our rising demand for renting assets. The deal equipped the US motor company with access to a new demographic through a month-to-month subscription model for short-term leases, via a digital platform.
The acceleration of technology like Canvas’ has dramatically shifted our needs and wants with time. We have developed expectations for on-demand access, with convenience and flexibility the highest priority when making purchasing decisions. Our changing ‘wants’ have created a frictionless retail landscape, where we demand access to goods and services immediately and with ease.
The on-demand economy is an example of how technology has leveraged off existing networks to drive simplicity and speed. Mass adoption of both ridesharing and room-sharing shows the need and desire for uncomplicated access. Airbnb for instance has achieved an adoption rate of 18 percent of travellers worldwide, despite only launching in 2008.
The recent shift towards access based consumption confirms our desire to attain goods immediately and without the burden of ownership. Unnecessary ownership of material goods forces us to over-commit, both financially and physically. We’re increasingly attracted to accessing assets like cars and household items that we can consume flexibly, for as long as we need and without the long-term commitment of ownership. Research shows that sales in subscription-based companies have grown nine times faster than the S&P 500 index over the past five years.
Canvas’ vision is to provide a “simpler, more flexible alternative to car ownership,” as the startup aims to “address the void in the consumer space between daily rentals and long-term (financial) commitments.” The alliance also serves to increase access to flexible automotive transport around the world. The partnership forms part of Ford’s vision towards technology and connectedness in aim of attracting younger consumers and fulfilling their changing desires.
Aside from its benefits to the consumer, increased adoption of the rental model has unlocked a new business model and revenue stream for traditional automakers. Companies such as GM, Schneider and Newscorp have predicted that between 40 to 100 percent of their future revenues will be driven from subscription and rental models. By providing access to people who either weren’t able to purchase a good outright or had no need to, Canvas and other rental platforms are able to create a new market, whilst lowering the barrier to access for consumers.
In the same vein, 2ndLease is transforming the way consumers think about accessing their household needs, while bringing to it the same flexibility they enjoy in other aspects of their lives.
With the largest advances in new technology still to come, adoption of this low-commitment access to goods and services is set to expand, as other parts of life become increasingly effortless. Future business will be led by companies which meet this growing demand for immediacy with customer centric, simple and on-demand solutions.