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Could Lynk & Co be the Netflix of Cars?

Last week Lynk & Co finally revealed the details of their hybrid subscription model, where you can earn money back from renting out your subscription car [1]. 

Most people share their Netflix accounts with friends and family – or rather, most people actually borrow their accounts from said friends or family members. As long as you’re not using it at the same time, it’s fine. Netflix even subtly encourages this, by adjusting its subscription fee based on how many different devices you can technically access their streaming service from. 

But imagine if you can actually make money back from renting out your Netflix account to strangers every time you’re not using it to help cover the cost of your subscription – and that this function is actually seamless and safe, and built into the Netflix app itself. This is basically what Lynk & Co’s car subscription model is all about. 

The Lynk & Co brand was created by Volvo’s Chinese parent Geely in 2016 and has their design team based in Gothenburg, Sweden. The brand is meant to be a digital-native sister brand to Volvo Cars, sharing many major components, technology, and platforms. As such, the Lynk and Co 01, a compact SUV that comes in either plugin-hybrid (68 km electric-only range) or mild-hybrid variants, might be the first mass-market vehicle designed for sharing. Key to this is the digital key technology, which can seemingly be assigned to friends and family (as well as Volvo service personnel) at will; and also a sharing platform, that allows you to set your own price and share your car with strangers.  

To be clear, Lynk & Co will also be selling the 01 outright. In China (where the company’s cars have been available since 2017 already) the 01 is only sold directly, as the company claims the market isn’t mature enough to support the membership model. But from their European online ‘reveal event’ last week [2], Lynk & Co definitely seem to be concentrating their marketing efforts here on the subscription model – which works like this [1]: 

There are two kinds of Lynk & Co members: those paying for a car and those who rent cars. Members looking to rent can join for free in the Lynk & Co app. Members with a car can set their own prices and conditions for rentals, including car pickup and drop-off locations. A member with a car can share their digital key to free members to open their rented vehicle.  

Those who opt to buy the car outright will also still have access to the sharing platform. Though it is not clear whether someone on a subscription can actually earn money from renting out their car, as opposed to just decreasing their cost of subscription to zero.

Other key aspects of Lync & Co’s subscription model is that it is open-ended, as opposed to a fixed period which is common in a lot of other car subscription programs. For example, Care by Volvo offers either 24- or 36-month contracts in most countries, whereas Lynk & Co’s subscription can be canceled with just one month’s notice. The subscription also includes insurance and servicing, but not fuel and electricity. 

The subscription program will launch towards the end of 2020 in the Netherlands, Sweden, Germany, Belgium, Italy, France, and Spain. The cost for a subscription will vary depending on the customer (much like insurance) but will not be above €500 per month.  

 

Personal comments

At the moment, most other car subscription models from the major OEMs have really just been short-term leasing programs with insurance and servicing included. This article from the website Autoblog provides a fairly good overview of the various car subscription services currently available in the U.S. [3]. Some may offer the added benefit of letting you swap cars every once in a while, but very few actually offer the flexibility of a one-month cancellation period. Most also seem to be targeted at the high-end and premium segments or are just part of a trial program limited to certain geographical areas. 

At the other end of the spectrum, subscriptions also exist for car-sharing programs – which while having the flexibility of non-locked in subscription periods, requires you to book the car before using it and does not guarantee you access to that car all the time. The payment structures can also be quite complicated with different subscription rates, kilometer, hourly, day, and weekend prices. It also helps if you live near where the car-sharing stations are located, as most of these do not operate on a free-floating basis. 

Compared to those existing subscription models described above, Lynk & Co really do look like they are bringing something quite new and innovative to the table with this hybrid business model – which merges elements of full-service car leasing with the flexibility of car sharing. It could solve the pain points of the car leasing subscription (locked in contract periods, high cost) while addressing the annoyances of car sharing (need for advance bookings, availability not guaranteed, distance to nearest sharing station, complicated pricing). Essentially, Lynk & Co’s model offers you the opportunity to flexibly lease a car, and then, if you choose to do so, run your own car-sharing service on your terms (you set the pricing, availability, and other conditions) with their digital platform. At €500 per month, it is also one of the more affordable car subscriptions, especially for a plug-in hybrid car. 

However, for this to actually work in practice, there also needs to be a large enough user base of people wanting to rent their cars using the Lynk & Co platform – so-called ‘free members’. This is where the Lynk & Co model could potentially fall short, as it’s not immediately clear why someone looking for a shared car would want to use their platform compared to other more established B2P or P2P platforms, like Volvo’s M or GoMore, respectively. Perhaps the genius could be in the use of Lynk & Co’s digital key, which allows car-paying members to share access to their cars with friends and family over the app. While details about the digital key sharing process are not clear yet, it’s more than likely that anyone who wants to have access shared with them will need to download the Lynk & Co app and create an account. And once they have the app setup, it could tempt them to use it the next time they find themselves needing a car. 

While I of course cannot say whether Lynk & Co will succeed in Europe or not, they do appear to have one of the genuinely most fascinating and innovative business models out there – potentially creating a new intersection between personal and shared mobility. 

 

Written by Bobby Chen, RISE.

 

Sources

1. 2020-09-30. Lynk & Co’s compact SUV costs €500 a month but might earn you a profit
2. 2020-09-30. Hello Lynk & Co
3. 2020-10-07. Complete Guide to Care Subscriptions