Physical Items with Subscriptions

[Output]

I know it's something that we've come to expect from software makers after Adobe popularised it, but it baffles me that more and more of the car makers are seeing this as the route to go down despite the backlash that is surely going on.

In this case (https://www.bbc.co.uk/news/technology-63743597), they're trying to say they want an annual fee of $1200 to shave a second off the 0-60 time of an electric car, so from 6.2s to 5.2s.

Even if it's not "currently planned" for the UK, if they can get away with it in one country, they're probably still going to try it in others in time.

Plus it not currently being planned obviously gives a lot of wiggle room for them to suddenly decide it is the new plan.

It begs the question of how long it will be before makers of various other physical products (other than the already-existing console online gaming subscriptions I mean) end up trying to do something similar, despite it not making any sort of sense for them to do so.

The more attempts that happen, the more it seems likely others will be encouraged to follow suit.

[DanceswithUnix]

Seems a small jump from petrol cars having identical engines with different power outputs (which the likes of BMW have been doing for a really long time now). Just a one off cost vs recurring.

In this case, the higher acceleration will probably wear the battery a whole lot faster, so you get to pay a second time when that needs replacing

Wonder what the insurance companies will make of this. Is a subscription a performance modification?

[AGTDenton]

Looks more viable to just get a taxi everywhere.

Sadly I think the days of owning anything are coming to an end, slowly of course. They're already trying to remarket those old TV rental places that had obscene prices.

[Saracen999]

My views on subscriptions aren't a secret - generally, I loathe them. I dumped Photoshop and lightroom over it and found alternatives (ACDSee and Serif Affinity Photo work for me) because I can buy the licence. It was a major factor in switching from Offuce to Libre too, though that was mixed in with what I'm convinced, as of Windpws 8, was and is the way MS were goibg with Windows.

But the car thing? I guess you can look at it as being charged extra (by subsciption) for more performance but there's another way to look at that, too, depending on what, if anything, needs to be done to the car. If, Tesla-style, ludicrous mode requires extra bettery capacity then, okay, it's a physical charge.

But if there's zero physical change to spec, then the alternative view is that you're buying a product capable of doing the full performance, for £x,000 + £y/month.

If you're willing to sacrifice some of what the car has, you can get it at a discount by not paying monthly too. Also depending on the plan, I could use it in "standard" mode for, say, 10 months of the year but for a couple of months during good weather, or maybe a month while on holiday touring, turn up the performance.

I have to say that my mindset is and always has been to work out, in advance, what buying a whatever is going to cost me. I didn't want Offce or Photoshop on subscription because I sure don't feel the need to upgrsde every time a new version come out. My version of Office was probably 10 years old when I was ready to upgrade, and te thought of paying monthly subs for 10 years in order to gain upgrades I didn't need? Shudder.

There are things we can't really avoid paying by subscription for, one of which is broadband and, for a couple of years, Amazon Prime though in that latter case, without buying a LOT more stuff online due the the pandemic and lockdwns, I doubt I'd have Amazon now. I do use Prime video a bit, but if I could get the delivery subscription without the video service, I would. Instantly.

But car performance? I think I'd just settle for the lower performance. Or buy a different car.

[jimbouk]

Going to be interesting to see what happens when someone managed to crack open the digital box and offer unlock codes for $5 on eBay. Given how poor car software/security currently is I can't see it taking too long. I can see a lot of money being thrown at lawyers to try and make it go away when it does appear, and how it will play in with the 'right to repair' actions both sides of the Atlantic.

But yeah, I would be walking away from a car / manufacturer who offers it, you know they're not doing it to save the customers money...

[Saracen999]

... Given how poor car software/security currently is I can't see it taking too long. ...

But yeah, I would be walking away from a car / manufacturer who offers it, you know they're not doing it to save the customers money...

Well, the cynic in me says that when any security breach works in our favour, and costs them money, the manufacturers will have a markedly different attitude to getting product security right. Much more attention paid than, say, cracking keyless door security.

[kalniel]

I guess we've been heading that way ever since the majority of people stopped buying cars outright and instead used finance with monthly payments to then hand the car back after three years. And much as it annoys me to have physical stuff in a car that's not activated, that's also been going on for years - whether it's a satnav unit that needs subscription/data or an engine with outputs regulated for different market price (and insurance) points.

I'd be super happy if I only paid for performance when I used it - wide open throttle less than 0.1% of the time - can you refund me the cost of the spare horses I'm not using the rest of the time please? (Sadly, no, they're not going down that route - I wouldn't mind a half-way house of being able to turn on extra horses for a single day maybe, keeping it mild for the commute).

[Saracen999]

I think this all depends which end of the telescope you use to look at this.

One way, and I get why people feel this way, is "I'm already paying for it and it's in the car, so why pay more to get it?" There is a logic to that view.

But the other end of the telescope is from Mercedes perspective. If a given car costs £x to manufacture, and they have to produce two dfferent models with two different engines, it undoubtedly is going to cost more than to produce one spec of electric motor, and electronically adjust it for two output levels. Then there's the additional stock costs of holding both those variants, no doubt in each trim spec, body colour and so on.

Doing two engines powers the traditional way is going to cost more, and so we, the end customer, are going to pay more. That much is inevitable. However .... if they can halve the range of models to stock with an engine capable of two performance levels, it opens the option to :-

- charge those going for lower performance less than otherwise would be the case, AND
- charge those going for higher performance less than otherwise would be the case, AND
- make more profit themselves.

In other words, all of us could be getting a better deal than with two separate motor spec's. Whether we are or not, what the ratio is between who benefits between the three routes is unknown, but the cynic in me can guess.

Put it this way. The last (new) car I bought was a BMW M3, albeit a long time ago. I could have bought one of the conventional 3-series but no, I paid a fair bit more for the M version. Admittedly, that was different suspension, different brakes, uprated gearbox, M-series (supposedly) exclusive bits like trim, different wings to fit wider tires, and so on. BUT .... more money for essentially more performance.

Mercedes could be using a logic like, we could charge £10,000 more for the high performance version, or produce one version and charge £1200 / annum for the unlock to power level. As most of our users keep their cars for 3 to 4 years, that ammounts to £4800, call it £5000 for round figures, for most purchasers.

Some, probably 90% (figure out of thin air), wouldn't bother with, or pay for the high perfrmance version anyway, so whether we charge more up-front for the high perfrmance one, or add a subscription, won't matter to them anyway. And those that will pay it will pay it either way.

Suppose they'd offered these cars in two models, Standard and 'Turbo'. The price difference was £5000 different, but no visible differences elsewhere, like wheel arches, trim options, etc (as per that M3), would anyone bat an eyelid at the price difference? I doubt it. In fact, it'd be cheap. And they could have just done that, without telling anyone the difference was software settings.

This is more about the perception of the subscription, the end of the telescope you use, than about actual differences but the fact remains, for years (decades) some people want more ower and will pay for it, some don't and won't. I wouldm but I doubt my brothers would.

We've been doing this without it being quite so 'in yer face' for, well, about 5 minutes after Henry Ford decided you could have colours other than black .... on your Model-T.

And this is me, long-term subscription-hater saying .... meh. Whatever.

Don't want the subscription? Don't pay it. Still want extra performance? Buy a different brand. If nobody goes for this, and everybody buys other brands, Merc will drop it like a radioactive hot potato. My bet is that a lot won't pay it, but some will. I wouldn't, but I don't have a problem with the option being there. In fact, I might prefer it to paying up front. At least this way, you can pick to have it, or not and change your mind after you've already bought the car.

[DanceswithUnix]

Still want extra performance? Buy a different brand.

This is perhaps part of what irks me here.

If Mercedes can use common components to drop the cost of a performance option, then so can everyone else. In a simple market, that allows everyone else to undercut Mercedes, and they lose sales. To some degree, they will from this. But some people will want a Merc, and this is milking their brand loyalty and that feels disrespectful to the fans of the Merc brand.

With Volvo you can get the entire car on subscription, which seems somewhat more honest. I don't mean a lease hire, you are on a rolling 3 month get out.

[Output]

Time will tell I guess.

As a non-driver this happening with cars doesn't actually affect me in any way, but I do still hope that other industries - where it would make even less sense - don't feel inspired to try to follow the same route.

Imagine a fridge freezer or cooker with a subscription to allow the temperature to be even lower or higher respectively. It's bad enough that smart ones exist.

[Saracen999]

This is perhaps part of what irks me here.

If Mercedes can use common components to drop the cost of a performance option, then so can everyone else. In a simple market, that allows everyone else to undercut Mercedes, and they lose sales. To some degree, they will from this. But some people will want a Merc, and this is milking their brand loyalty and that feels disrespectful to the fans of the Merc brand.

With Volvo you can get the entire car on subscription, which seems somewhat more honest. I don't mean a lease hire, you are on a rolling 3 month get out.

Yeah, I hear you. I get it, really.

My counterpoint would be that they're a massively large, powerful, multinational corporation. I don't really buy into "respecting" fans, or disrespecting them for that matter. They're a corporate, and first and foremost, like pretty much every other corporate on the planet, their first duty is to their shareholders, and they respect banks and investment industries for sure. But customers? Our job, IMHO of course, is to show up periodically with open wallets, and the rest of the time, stay out of their way and don't give 'em grief. To the extent that they are in the customer's corner, it'll be because it's good marketing and PR.

So I trust any of them to be working in my best interests about as much as I trust a parliament of politicians, which is about as far as I can throw Jupiter. Which isn't far.

I'll admit I react adversely to the sheer nature of the subscription principle. It .... grates. But on this occasion, given that we can still buy the car and performance without the "upgrade" isn't exactly shabby, I can't really see a problem. Not for me, anyway. Assumin the cars were otherwise my first choice, I'd simply say "Nah" and do without the boost.

As a one-off up-front cost, would I go for the power? These days, I doubt it but I did fr the M3. Would I pay £1200/year for it? No. So, I don't care.

Heated seats, on the other hand? That, I would pay for up-front and wouldn't pay a subscription for. So that one would pi....erm, irk me.

Where I do agree is that it's an early step (but not tthe first) on a very slippery slope. Maybe CaaS (Cars as a Service) is the future.

[Iota]

Is a subscription a performance modification?

If the car isn't being modified, such as chipping it, then probably not? It's just a software update by the manufacturer of the vehicle. Tesla have been doing similar for a while, I'm fairly sure that if there are no physical changes made (hardware is already there) then it's not being modified. Not an expert though.

With Volvo you can get the entire car on subscription, which seems somewhat more honest.

There is the main point, it's about being honest. Mercedes are not making this a "one off" payment but making it a subscription, at least BMW make it a "one off" payment to enable features, which is essentially what you would do when choosing extras when ordering a new car. It's a bit of a grey area, but it's also potentially brand damaging to Mercedes to do it this way.

For me it's a moot point, I'd rather buy a Honda for my next car.

[DanceswithUnix]

But customers? Our job, IMHO of course, is to show up periodically with open wallets, and the rest of the time, stay out of their way and don't give 'em grief. To the extent that they are in the customer's corner, it'll be because it's good marketing and PR.

AIUI car sales are partly about fleet sales for the likes of Ford, but for consumer sales it's about customer retention. Annoying existing customers can wipe your customer base, and selling to new customers is way harder.

If the car isn't being modified, such as chipping it, then probably not? It's just a software update by the manufacturer of the vehicle. Tesla have been doing similar for a while, I'm fairly sure that if there are no physical changes made (hardware is already there) then it's not being modified. Not an expert though.

Chipping hasn't involved physically changing map roms for probably 20 years at this point. The 1989 engine in my kit car would involve physically swapping the map eprom, the engine in my 2014 Alfa would involve uploading a new map to the ACU. Smacks of grey area to me.

There is the main point, it's about being honest. Mercedes are not making this a "one off" payment but making it a subscription, at least BMW make it a "one off" payment to enable features, which is essentially what you would do when choosing extras when ordering a new car. It's a bit of a grey area, but it's also potentially brand damaging to Mercedes to do it this way.

For me it's a moot point, I'd rather buy a Honda for my next car.

BMW are already offering a subscription for heated seats and steering wheel. Those both sound to me like something you could send a CAN bus command to switch on and off, bypassing the car's software so probably something you could do with a cheap bluetooth ODB2 adaptor and an phone app

[Saracen999]

If the car isn't being modified, such as chipping it, then probably not? It's just a software update by the manufacturer of the vehicle. Tesla have been doing similar for a while, I'm fairly sure that if there are no physical changes made (hardware is already there) then it's not being modified. Not an expert though.
....

My guess would be that that's very possibly right, but going back (about 40+ years) to my law classes, an insurance contract is known as "uberimae fidei", or "utmost good faith", in law. The inference is that you, the policy holder, should notify the insurer of anything they might regard as relevant. Failure to do so, especially if that change might be a factor in any subsequent claim, as something increasing performance could at least be argued to be, might be grounds for rejecting a claim, and/or invalidating the policy.

That could leave you open to prosecution for lack of insurance, or worse, very significant legal liability in the event of the worst of accident types, causing serious or life-changing injury to someone else.

So while I suspect you're right and it won't affect your premium, probably, I would strongly advise contacting them and formally telling them. The reason is that not doing so if they later turn round and deny the claim could have devastating consequences on your financial future.

To be clear, this is all a bit doom and gloom and I doubt it would result in that level of consequence, but personally, it's not a risk I would want to run. The potential downside of not telling them is incomparably worse than any premium increase telling them might cause. And I guess, that 1-second-ish performance increase doesn't sound like much but saying it a difference way, about a 16% improvement in standing start acceleration, sounds more impressive, and 0-60 in 5.2-ish is damn quick for anyone not used to high performance cars.

It does seem to me that this whole question is a superb example of car technology out-pacing accepted legal practices, or at least, the general public understanding of them, because whie the car itself isn't being modified, the performance of it is.

Thinking about it, my current car does about 5.4 to 60, and is limited in software/formware to 155mph. But I could have that remapped and the limit removed which, I'm told, can result in about 40-BHP increase, and more like 190mph top speed. I'm pretty sure an insurer would want to know if I did that, but I still haven't physically changed the car, just tweaked software, which is a pretty good parallel for Mercedes tweaking software to increase performance.

Moreover, a chat I had some years ago with an insurer casts another light on it. At least part of their perspective, and why some things jack the premium up dramatically, is psychology. "Huh??", I hear people say. But think about it, why would someone pay £1200 (or $, whatever), for increased performance unless they planned to use it?

Insurance is only partly based on what the car can do, and the other major factor is a view on the nature of the driver. Someone (like me, in their 60s), pottling around even in an M3 is a lot less of a risk than a teenage lad with an excess of adrenalin, a lack of grasp of his own mortality and his first souped-up old clanker, and that thinks he's Lewis Hamilton Mk 2.

So it may be that what notifying an insurer does isn't worry them about the risk from the car's performance change, but about the mindset of the driver.


TL-DR = Tell the insurer. Not doing it and being wrong about them wanting to know could be devastatingly bad news. Better safe than very, very sorry.

[Saracen999]

AIUI car sales are partly about fleet sales for the likes of Ford, but for consumer sales it's about customer retention. Annoying existing customers can wipe your customer base, and selling to new customers is way harder.

...

Can't argue with that. I doubt many fleet buyers would pay the subscription charge, so I'd think this is mainly about private buyers.

I'd argue that while there isn't (IMHO) a major problem with offering the perforamce subscription, there undoubtedly is going to be a backlash from many/most buyers, who will see it from the end of the telescope saying "I've already paid for it in the price of the car and now you want a subscription too ... and not exactly a small one either". And yup, the risk is some customers are annoyed enough to vote with their wallets. If I saw it that way (and I'm honestly surprised I don't), I'd be one of them. It wouldn't be the first time I've reacted like that (by a large margin) to bad customer relations. It's a "fool me once, shame on you, but fool me twice, shame on me" reaction.

So to be clear, while I don't think the subscription thing is itself bad, I sure do think the way it's going to be perceived is very likely to be bad. Also, I kinda hope it is because, y'know, the whole "slippery slope" thing, and all.

[kalniel]

Wonder what the insurance companies will make of this. Is a subscription a performance modification?

I'd expect insurers to factor in the 'potential' improvement of the car via manufacturer software upgrades and either just charge everyone regardless of whether they use it, or put a clause in that says they must be informed if the performance changes (with subsequent out of renewal premium).