Enterprise Holdings last month launched a pilot vehicle subscription service in three states. For $1,499 a month, Subscribe With Enterprise customers can swap out vehicles up to four times per month from six vehicle classes. News editor Johanna Jainchill spoke with Kyle Sabie, assistant vice president of Subscribe With Enterprise and Enterprise's CarShare division, about the program.
Q: Is this the car rental industry's version of Netflix or Birchbox?
A: Yes, that's a fair assessment in its infancy. There are so many ways these services can start to evolve, but as it relates to rental car companies and vehicle manufacturers, this is [version] 1.0 of that world. Traditionally, the ownership release model is more long-term and encompasses more than just driving the car: registering it, maintaining it, insurance. In the car rental space this is the 1.0 of "instead of going through all of that ownership process and all that comes with it, what if you just access it for one price through an organization that holds multiple cars and is manufacturer agnostic."
Q: And being manufacturer agnostic distinguishes you from Cadillac, for example, which has a subscription option?
A: We've seen a couple of those pop up. Different manufacturers have varying features: different term periods, limited to certain makes and models, you can swap once a year or every six months. What we tried to do -- and because of our network and our access to a wider range of vehicles and because we've been renting cars for 50-plus years -- we felt like we could combine all of those features into one product as part of what we do every day and make it a little more seamless for the customer.
Q: Are there many people who often want to swap for different kinds of vehicles?
A: I'd say it's definitely a narrative. ... I spent the first 10 years of my time with Enterprise in Southern California, and it was quite common in that neighborhood for people to rent cars for chunks of times, weeks or months in a row. And they wanted during the weekday to drive that fuel-efficient, hybrid-type vehicle because they traveled a lot commuting in Southern California, but on weekends they wanted something nicer.
Q: Who does this program target?
A: I think we will probably see differences from state to state. It's likely to touch a little bit of every category. Some retail, some leisure, some of that corporate customer, there may be some replacement customer opportunities. Someone ordering a vehicle that might not arrive for six months and they need a bridge vehicle. There are a host of different folks we think this touches who we transact with every day in our core rental business. So as we look at all the different types of individuals and the use cases for why they rent cars, we have a robust history of who they are.
There seems to be a societal shift and more and more interest around this, and we certainly have all the right components, it's just a matter of putting them all together and introducing this to the market.
Q: The cost in the pilot states seems high when compared with most auto leases. How do you come to that price point?
A: It's a little bit complex. The first factor is looking at the [average daily rates] for vehicles in all U.S. cities, and in particular in some of these states you have to look at it year-round, as well. Some of the vehicles you're allowed to access are some of the more costly vehicles on the road today, so for example, you've got trucks and medium SUVs, Ford Explorers, a Jeep Cherokee. These aren't just compact cars. It's a bit more premium to a certain extent. And you have to consider the cost of insurance when you have a whole range of drivers. Those are locally based, and we work with local subsidiaries to price those out.