Transportation as a “Service”

Car ownership will soon be a thing of the past, some say.

Some wish.

Instead of buying a car every so often and driving that car for a period of years – and owning the car – people will simply tap an app and rent a car by the hour or day; whatever their need at the moment happens to be.

It sounds breezy – and oh-so-easy!

This may indeed be our metrosexualized future  . . . god help us. But not for those reasons. There are always other reasons. The real reasons.

There is money to be made, naturally. Great huge stacks of it. Someone with a calculator and the instinct of a Don King or Colonel Parker did a little math and figured out that it would be orders of magnitude more profitable to rent people cars than sell people cars.

Time to buy old US gold coins

You can only sell a car to one person at a time, after all.

But rent? By the hour?

Theoretically – and probably, actually – you could keep a given car working like a Filipino Lady Boy, almost 24-7. Pimping the ride to one “John” after the next. With carpet vacuuming and Febreze in between.

Almost no down time.

The car that brings in say $400/month as a sale brings in that much – or more – in a week – as a rental. No wonder the stampede toward “transportation as a service.” GM especially – which is already implementing this via its Maven app in the New York City area.

It is the equivalent of discovering a new Ghawar oil field under Brooklyn. The price of real estate just went up.

It also gives the manufacturers – the GM corporate – direct access to your wallet (via revolving credit) which must be giving multiple orgasms to the people in GM’s accounting department. Dealers will be cut out of the picture – at best, reduced to parking lot attendants and service depots, the business side of that between them and the manufacturers, all costs of course folded into the rental fee charged to you.

Or did you suppose that eliminating the dealer would reduce the cost to you?

Like relocating assembly plants in Mexico and China, for instance? The Mexican line workers do not receive UAW wages or benefits – but somehow, amazingly, these savings to the manufacturer are not reflected in the price of the vehicles assembled.

Neither will the elimination of dealerships lower the cost of cars. It will just obscure them.

It will work just the same as it works if you rent an apartment. You do not pay anything for maintenance of the building or property taxes. You just pay rent, which payment takes full account of maintenance costs as well as taxes paid by the landlord. Or did you suppose he pays them out of the generosity of his kind old heart?

Suffer the children.

But we are only considering one angle of this transportation as service con. The really evil genius of the thing is this:

It is a way to stave off the looming crash of the car industry and to hide the real reasons why it is on the verge of crashing.

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