2018 BMW i3, 2017 Frankfurt Motor ShowEnlarge Photo
How would you know that the standard model for individuals buying new cars is dying?
Sure, you could point to car sharing services like Car2go or Zipcar. Or you might point to ride hailing companies like Lyft or Uber.
Maybe you think the subscription model for the Hyundai Ioniq Electric subscription service is the hot new thing.
Here's another way: You could take a look at Fair, which just got up to $1 billion in debt and equity funding.
Not to overstress the point, but some the money came from two big global carmakers—BMW and Mercedes Benz—among other
Billed as "the future of car ownership," the idea behind Fair is to let drivers use cars under subscription service that charges a fixed fee every month.
2018 Mercedes-Benz C Class C 300 Cabriolet GrilleEnlarge Photo
Think of it as something between a lease and traditional ownership, except that now you use a smartphone to pay.
The difference between Fair and other new ways to use vehicles is that you can have your name on the title and the registration of the car (even though Fair will legally own it).
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When you pick out a car, using local dealerships and your iOS app, you then initiate a Start Payment process in the app to get your car.
That puts participants on the hook for, "monthly payments as low as or lower than a typical loan or a lease, with the ability to keep your car as long as you want."
2017 Chevrolet Bolt EV electric car in Maven car-sharing fleet, Los Angeles [photo: Dan MacMedan foEnlarge Photo
For now, Fair operates only in Los Angeles, but it plans to launch in other parts of California by the end the year, and then enter other "select markets" during 2018.
Fair says it currently has 74 dealers signed up. So what do dealers get out of the Fair deal?
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The company says that it encourages users to service their cars at the dealer where they got them, "and we ask them to come back to see you when they're ready to turn the car in. That means you build deeper relationships with happy customers."
The BMW and Mercedes cash is just the latest in a series of investments by automakers in non-traditional ownership business model companies. GM owns Maven, in car-sharing, and a share of Lyft, for ride-sharing.
— Sebastian Blanco