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GM Maven Service Is Far From Profitable

We recently reported that Maven, GM’s car-sharing service, will be pulling out of eight major U.S. cities due to a lack of usage. And now, new information has come to light that shows just how unprofitable such new mobility services can be.

Introduced in 2016, Maven’s original goal was to gather information for future GM autonomous robo taxi services and connected vehicle products. It was The General’s first significant attempt at the car sharing and mobility space. Maven offers up GM vehicles for customers to rent, typically on a short-term basis. The service runs via the Maven mobile app.

GM Maven Cadillac

Just recently, GM pulled the plug on Maven for almost half of its markets in North America, including large city centers such as New York and Chicago. That’s because the service is doing nothing more than burning cash, and GM can’t afford to wait for the demand to catch up. These new-age mobility services, along with subscription methods like Book by Cadillac, were originally launched to prepare carmakers for a modified vehicle ownership model, adjusted by slowing vehicle sales and a potential economic downturn.

Earlier this year, Cadillac put a halt to its Book subscription service, initially providing no clear explanation as to why nor if it will ever return. And other carmakers, like BMW, are rethinking their entire subscription models for exactly the same reasons. Bottom line: there’s no money in new-age car-sharing services to be made at the moment.

Book by Cadillac app

Maven, like Book by Cadillac and other new forms of mobility services, are essentially measuring new business models with unclear results.

“Alternative ownership, ride-hailing and car-sharing is still the Wild West,” said Stephanie Brinley, automotive analyst at IHS Markit. “The opportunity for mobility services to generate revenue is there, and it’s true, but getting from here to there is messy. And the scale, we don’t fully know.”

Cadillac did recently mention that a revamped version of Book by Cadillac, called Book 2.0, will return by the end of this year. As we write this, Cadillac Canada is experimenting with a new way car shopping method via a feature it calls Cadillac Live. It allows consumers to interact with a Cadillac vehicle expert and check out a new Cadillac model virtually, from the comfort of their own home. Observably, GM still sees potential in these kinds of services.

Cadillac-Live-1

Other brands, such as Ford, Volvo, and Porsche have, or are currently exploring new shopping and mobility trends as well, but with questionable levels of success. While the ideas are there to change the traditional automotive ownership model, turning them into successful and profitable services is proving a lot tougher than anyone had originally anticipated.

Source: Automotive News

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Comments

  1. This is the first source of information concerning MAVEN. Interesting concept and one I would subscribe to if offered in my area. I live in a mid-size market and do not receive exposure to such opportunities. Was the concept market saturated?

    Reply
  2. Interesting concept, slightly misguided. It was only going to be successful in a few markets (LA, New York, San Francisco). I was there since the start and it looked like the business case was done on the back of a bar napkin. One of those things GM is trying to do to transform it into a tech company, try again

    Reply
  3. The essence of the matter. “Earlier this year, Cadillac put a halt to its Book subscription service, initially providing no clear explanation as to why nor if it will ever return. And other carmakers, like BMW, are rethinking their entire subscription models for exactly the same reasons. Bottom line: there’s no money in new-age car sharing services to be made at the moment.”

    Car sharing means different things to different people but there is a lot of competition for whatever it is. So, making money from car sharing is hard. I have considered using Maven but value for money was poor. As well, it did not have the necessary convenience.

    Reply
  4. They should have just rolled this out in University cities like Ann Arbor, etc.
    Plenty of temporary use there along with city needs which seem to favor ride sharing services.
    This, along with EV, AEV, etc is going to take a lot longer than people anticipate as you have millions and millions of people used to doing things a certain way. Behaviors wont change overnight (unless there is a major upheaval in gas prices, etc). I don’t see a bright future for Tesla and the like – they are swimming against the tide. Failures like these do end up teaching us important lessons for EV 2.0 and so on.

    Reply
  5. I used Maven a lot in Chicago. My final straw was after several horrible experiences with the app where the company wouldn’t offer me any support. I once rented a car for a week only to find out I was suspended because I didn’t pay (6 months later). The final straw was when I had planned a weekend trip, go to get a car, but the app wouldn’t let me open the car. A whole trip ruined with no remorse from GM.
    They wanna pull the cord, but this article discusses none of the shortcomings and shoddy infrastructure of the app that powers the whole program.
    I’ll miss it, because I liked how it didn’t require a membership like Zipcar.

    Reply
  6. Once agAin another Barra bad idea. She needs to be thrown out..

    Reply

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