In today’s world, the idea of paying a flat monthly fee to access a car may seem like a modern convenience that caters to our fast-paced, on-demand lifestyles. However, the concept of shared transportation has a much longer history, and the rise of car subscriptions is the latest chapter in an evolving story of mobility. From early car rentals to the birth of leasing and the emergence of car clubs, the history of shared vehicle ownership is a fascinating journey that ultimately led us to today’s flexible, subscription-based models.
The Birth of Car Rentals: A New Concept in the Early 20th Century
To understand where car subscriptions come from, we first need to look back at the early days of the automobile. While the first cars were luxury items for the wealthy, the idea of renting a car became popular in the early 1900s. The first official car rental company, The Automobile Exchange, was founded in 1916 in the United States. This company allowed customers to rent a car by the hour or day, paving the way for a broader concept that would come to be known as “car rentals.”
Renting a car offered a way for people who didn’t own a vehicle to experience the freedom of driving without the high costs and long-term commitments. During this period, the car was seen as a symbol of status and adventure, but not necessarily a necessity for everyday life. The rental model also provided a solution for those who needed a car for a short period—perhaps for a business trip, a family holiday, or a special event—without the hassle of ownership.
The Rise of Leasing: The Long-Term Alternative
While car rentals served the short-term market, the idea of leasing—a more long-term form of car access—emerged in the mid-20th century. Leasing allowed individuals to drive a car for a longer period, typically two to three years, with an option to purchase the vehicle at the end of the lease. This concept, pioneered by companies like General Motors in the 1950s, offered an alternative to ownership for those who wanted the use of a car without the financial burden of buying one outright.
Leasing gained traction in the post-war era when consumer demand for cars boomed, and Americans and Europeans alike began to embrace car culture in full force. Leasing allowed individuals to drive new models more frequently, offering them the latest technology, style, and features every few years. By the 1980s, leasing had become commonplace, with many drivers opting for this flexible option, and it still remains a popular choice for those who prefer not to commit to long-term ownership.
The Rise of Car Clubs and Car Sharing Models
While renting and leasing provided some flexibility, the next major shift in shared transportation came with the rise of car-sharing clubs. The concept of car-sharing can be traced back to the 1940s in Europe, where car clubs allowed people to share a car for a small fee, and sometimes even manage the vehicles together through a cooperative model. One of the earliest examples was the “Autonome” club in Zurich, Switzerland, founded in 1948. Members of the club would pay for access to a car when needed, typically on an hourly or daily basis, and the idea slowly spread to other parts of Europe.
However, it wasn’t until the 1990s that car-sharing as we know it began to take shape. In the US and Europe, the growth of urban living and the increasing cost of car ownership led to a desire for more sustainable and flexible transportation options. Car-sharing services like Zipcar (launched in 2000) and DriveNow (now part of BMW’s car-sharing programme) started to gain traction, especially in cities where owning a personal vehicle was impractical due to high costs, traffic, and limited parking. The idea behind these services was to allow people to pay only for the time they used the car, reducing the financial and environmental costs of private car ownership.
These car-sharing models began to change the way people thought about cars. It wasn’t about having a car to call your own; it was about having access to a vehicle when you needed it. This was a far cry from traditional car ownership, but it was still more of a pay-per-use system rather than a true subscription model.
The Emergence of Car Subscriptions
The real evolution towards modern-day car subscriptions began in the mid-2010s when the idea of paying a flat monthly fee to access a variety of vehicles came into play. In essence, car subscriptions combine the best elements of renting, leasing, and car-sharing. With a car subscription, individuals can choose from a range of cars, paying a fixed monthly amount that covers everything from insurance and maintenance to taxes and roadside assistance. This service offers flexibility and convenience that traditional car ownership simply can’t match.
One of the first companies to introduce a comprehensive car subscription service was Care by Volvo, launched in 2017. The model was simple: for a fixed monthly fee, users could drive a Volvo model of their choice, with all costs included in one payment. This service allowed people to switch cars every 12 months, offering a convenient alternative to leasing or renting. Other companies soon followed suit, with brands like Porsche and BMW offering similar subscription services, and start-ups like Carly and Onto leading the charge in the UK.
Why Car Subscriptions Are the Next Big Thing
Car subscriptions are essentially a response to the changing needs of modern consumers. In an age where flexibility, convenience, and sustainability are paramount, car subscriptions offer a compelling alternative to traditional car ownership. They allow drivers to access a wide range of vehicles without the long-term commitment, making it easier for people to choose a car based on their lifestyle and needs at any given time.
For example, you could choose a small city car for your daily commute, switch to a luxury vehicle for a weekend getaway, or opt for an electric car when you want to reduce your carbon footprint. Car subscriptions can cater to different lifestyles, whether you’re a young professional living in a city, a family in need of a larger vehicle, or someone who enjoys the flexibility of trying different models.
The Evolution of Shared Transportation: A Bright Future Ahead
What started as a luxury for the wealthy in the early days of the car has evolved into a flexible, accessible model for anyone who needs a car. Car subscriptions are the next logical step in the history of shared transportation, combining the benefits of rentals, leasing, and car-sharing into one all-encompassing service.
As we look to the future, it’s clear that the evolution of transportation will continue to prioritise flexibility, convenience, and sustainability. Whether it’s a nod to the early days of car rentals or a modern take on the cooperative car clubs of the past, car subscriptions are part of a broader trend toward shared and sustainable mobility solutions that reflect the way we live today.
