New cars will give you nickel – it’s automotive as a service

Every few years, someone who comes up with a startup for investors comes up with an acronym or buzzword that is quickly becoming the new trend in these circles. One of the most pernicious is “as a service,” which takes regular things and finds a way to charge you a regular fee for using them.

Auto companies have simply loved the sound of it, and the industry is moving fast to implement subscription services at all levels. Even if there is hardware in your car for a certain feature, you may now have to pay a monthly fee to use it. Let’s explore how this happened and discuss the cars involved. You might be surprised to find yours already on the list.

Subscription required

Many cars now come with smartphone apps packed with additional features. Credit: Audi

Long ago, before the world went crazy, you could opt for your car with all kinds of nice amenities when you order it from the dealership. You’d pay a little more, sure, but nice folks at the factory would take the extra gear on board, and you’d appreciate the extra touches you paid for.

It was a simple system, and it made sense. Things like heated seats or stereo upgrades really had to be installed at the factory; going back to the dealership later for more upgrades would be complicated and a relatively unappealing option.

Nowadays, many cars are connected to the internet around the clock through their own built-in cellular modules. These serve all kinds of purposes, from monitoring safety to enabling the automaker to deploy necessary software updates over the air.

However, this connectivity also created a new opportunity. Automakers could now remotely turn car features on and off from the comfort of their ivory towers. Thus was born a new opportunity for monetization. Pay the automaker a toll or you can’t have nice things.

It’s already happening

Toyota has already implemented subscription services in several of its vehicles. Credit: via Toyota

It may seem like a problem brewing for the future, but unfortunately it is already our current reality. The big milestone this year has been that many customers didn’t realize that they were already driving cars that were subject to subscription-only functionality.

As reported by The Drive, Many Toyota customers have just found out that the remote start feature of their vehicles’ remote controls is only activated if they maintain a subscription to Toyota’s Connected Services. The problem has been masked so far, as it only affects cars built from 2018 onwards, and Toyota offers most drivers a free 3-year subscription, extended to 10 years for those who opt for the package. Premium Audio.

However, after this period has elapsed, if no current subscription is paid, the car’s remote start function will stop working. It does not matter that the remote control and the vehicle can still communicate correctly, or that all the equipment is still in place. The feature will stop working unless the fees are paid.

Clearly, there is an argument to be made that automakers should be able to cover the ongoing costs of maintaining cellular connections to vehicles. For things like remote start apps that use the internet and other cellular features, it’s understandable that a fee is required. However, in this case, starting the remote control remotely does not require any cellular connection. Thus, charging a fee for this feature is only a revenue-generating measure. Surprisingly, Toyota began to “examine” the situation after the flashback it received when the story first broke.

Interestingly, some Toyota models built before November 12, 2018 can no longer maintain a cellular connection in the United States due to impending 3G network shutdowns. In these cases, Toyota has “upgraded” the vehicles so that they no longer require a cellular subscription for the remote start function by remote control. This is not surprising, as Toyota no longer has the means to communicate the subscription status with these cars now offline. It is a gesture of good will; Toyota might as well have done nothing because the cars fell off the grid and let the functionality die forever.

A widespread problem

All-wheel steering of the rear wheels requires a subscription in the new Mercedes-AMG EQS 53 4MATIC +. Credit: Mercedes-Benz

The problem is not unique to Toyota, however. Tesla was particularly interested in similar antics, including disabling features of a used car that the previous owner had already paid for. In this case, the features weren’t even subscription-based, but subject to a one-time payment. Tesla didn’t care and was disabling features anyway. This left the new owner of the used car considerably out of his pocket as they had paid for a car advertised as having certain features which evaporated once they took possession of it.

Luxury brands have also jumped on the bandwagon. Mercedes-Benz’s new EQS luxury electric sedan comes with rear-wheel steering. However, it will only turn up to 4.5 degrees unless you fork out the extra cash. As reported by Autoblog, if you want the full ten degrees of operation of the system, you will have to pay an annual fee of 489 euros. The equipment to complete the steering level is in each car; Mercedes has just decided that for the German market at least you will have to pay extra to get the most out of it.

BMW and Audi are also involved in their own on-demand function designs. BMW is testing an annual fee system for remote start and a built-in dash camera, while considering asking drivers to regularly fork out for simple things like heated seats and steering wheels that are already built into the car. Audi, meanwhile, will offer higher-speed data connections as well as improved vehicle lighting operation for those who sign up for regular payment.

Many other car manufacturers already offer subscription services. Whether it’s for navigation system updates and traffic information, or for driver assistance systems like GM’s Super Cruise, they’re all here to tie vehicle functionality to monthly fees. regular.

Outside of the automakers, even the accessory companies want to earn regular dollars. In perhaps the most horrific example, the Klim Motorcycle Safety Airbag System will not inflate in a crash unless owners are paid on their subscription. Heartbreaking stuff.

The why

Volkswagen’s Car-Net system requires a monthly subscription to activate certain features such as live traffic updates, but is generally free for the first five years of vehicle ownership. Credit: Volkswagen

It is not difficult to understand why this happened. From a business standpoint, finding a way to get money out of existing customers on a regular basis is an extremely attractive proposition. Rather than seeing a customer once every few years when they buy a new car and expecting them to stay loyal, that person can contribute to the bottom line of the business every month. If a car is owned long enough as well, the sum of the subscription fee could far exceed what the company would have originally charged for the option to be installed in the first place.

The automakers will say what they are offering is flexibility. Customers will only have to pay for what they want and need, and they can purchase additional features as they want to use them.

However, what they also introduce is discomfort. The end of the Internet age has already weighed on the average person with a large number of recurring credit card payments, for everything from phone plans to streaming services. Adding another doesn’t help anyone and costs consumers more money.

Worse yet, it complicates things for used buyers. Test drive a car, and it might have all the bells and whistles – until you sign it with your name and log into the infotainment system. Then suddenly you find yourself each month with an additional cost on top of the loan repayments just to keep the seats warm. It’s enough to give anyone a headache.

There is also the specter of a car that would permanently lose its functionality once connected services are deactivated. Whether it’s shutting down old cellular networks or shutting down a business in a particular country, it doesn’t matter. Without a steady signal from the mother vessel, the characteristics disappear. Some, like Toyota, may choose to unlock features in cars in these situations, but there is absolutely no guarantee.

The idea of ​​on-demand features seems to be heavily biased in favor of automakers. The industry is looking for a whole new source of revenue at the cost of great consumer frustration. On the other hand, if people can force Toyota to back down on key fobs, maybe we can with other automakers as well.

Whether or not a consumer movement is successful, it is suspected that a cottage industry of crackers may spring up to unlock features without paying expensive ongoing fees. We can all look forward to getting into the cracktros while we unlock the Advanced Wiper Pack for Winter, at the cost of occasionally breaking the car with a bad patch. Whatever happens.

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