Jeep Tests Car-Sharing and Subscription Services

Jeep is testing car-sharing and subscription services for owners of its vehicles.

Two pilot programs with Jeep owners in Boston will start next week and run for three months, Tim Kuniskis, head of Jeep North America, tells MotorTrend.

A peer-to-peer pilot car-sharing program will select 100 new Jeep owners who can make money by renting their vehicle to others. Jeep will partner with the personal car rental app Turo for the pilot program. Kuniskis said that, fittingly, Turo’s top peer-to-peer shared car is a Wrangler.

The 100 Jeep owners will be able to rent out their new vehicle to help offset costs. The owner gets to offset payments while Jeep benefits from getting a prospective buyer into a Jeep for a day or two. It is a longer, real-world test drive where the renter talks to the owner, instead of a dealer, about how they like the vehicle.

“We want to see if people see this as a way to offset their payments,” said Kuniskis. “Are they interested in loaning their new car to offset a $600 a month payment? For would-be buyers it might help them decide whether they want to make a $45,000 purchase. Am I sure I want to do this. Let me talk to someone who has had one for a year.”

There is concern that automakers are pricing themselves out of the market and people simply can’t afford a new car. Only a third of vehicles sold are less than $30,000, and people are spending 10 percent of their household income on a vehicle, said Jonathan Smoke, chief economist with Cox Automotive.

Today 93 percent of miles travelled are with a personally owned car, said Isabelle Helms, Cox vice president of research and market intelligence, who released a mobility study today. Owning a car costs an average of $0.50 a mile compared with $0.25 to ride public transit, $1.30 for ride-hailing, $1.50 for car-sharing, and $0.80 for a subscription service. When alternatives to car ownership reach about 60 cents a mile, she expects ownership to drop significantly to only 61 percent. Cox forecasts subscription services will become popular, rising to about 10 percent of miles travelled while ride-sharing and ride-hailing will be in the 1 percent range.

Jeep is also starting a three-month trial subscription service, again with 100 Jeep owners, who will have access to other FCA products such as a Ram pickup to deliver some mulch or a minivan for a family trip.

Kuniskis says some of the challenges preventing subscription services from taking off include price and the range of vehicles offered. The advantage of FCA is the ability to get a truck or a minivan or a Charger or a Challenger. “We think the breadth is helpful.”

Another challenge is the dropoff and pickup of the vehicle, so the pilot program will be tested in different ways. Some will include dropoff and pickup while others will test a program where they must handle the logistics themselves. Having two test groups will gauge how important that part of the service is and show if it affects utilization rates. Because this is only a three-month trial, FCA will use Avis to supply the vehicles so dealers don’t have to take on the expense and have the inventory in stock for the pilot.

The participants would not be charged for the service, but ultimately a subscription service would have a charge.

The Jeep programs, if implemented fully after the test periods, will build on the existing Jeep Wave membership program that offers a concierge service with a 24-hour hotline, some maintenance, same-day rental, access to VIP events, parking, and other perks. Jeep Wave was always meant to be an umbrella of bigger things Jeep wanted to do, Kuniskis said.

“We’re going slowly to make sure we’re doing it the way the Jeep owner would want us to do it, and making sure it’s right for the brand,” said Kuniskis.

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