How Borrow is using subscriptions to bring flexibility, freedom back to car ownership. Part 1

How Borrow is using subscriptions to bring flexibility, freedom back to car ownership. Part 1

The automotive industry has traveled a winding road over the past century, and its journey has been filled with changes and unexpected developments. Now, new services and emerging technologies are testing automakers’ abilities to keep modern consumers behind the wheel. Automotive brands are faced with a generation of customers who value the flexibility and convenience offered by rideshare services like Uber or Lyft. In addition to delivering quick access to transportation, these offerings provide features customers have come to expect from almost all of their experiences — and for a bargain.

Younger consumers have emphasized that they value speed and affordability. Whether they’re seeking meal kits, clothing services or entertainment options, millennial customers — those aged 22 to 37 — are used to trying before buying. Generation Z, those aged 21 and younger, is continuing the trend. Customers younger than 35 also closely monitor their spending and how their purchases affect the environment.

Rodrigo de Guzman, CEO and founder of electric vehicle (EV) subscription service Borrow, believes subscriptions could be the key to keeping these younger consumers connected to the auto industry. De Guzman recently spoke with PYMNTS about how the model gives automotive consumers the flexibility and freedom of choice they expect from their retail experiences.

De Guzman created Borrow after the founding of its parent company, Prazo, which originally offered customers more traditional leases. Prazo hit some speed bumps in appealing to millennial and Gen Z consumers who found its process cumbersome and the agreements too restrictive.

“Even a two-year lease was still too long [for these consumers], and to complete a transaction of that length and for that kind of financial commitment — it was a big ask for someone to do online,” de Guzman explained.

Borrow used a different subscription approach to win over younger consumers, offering shorter terms and lower payments to build lasting relationships with them and help the company stay competitive. A fair amount of university students, who fall into the Gen Z category, select the company’s three-month option. “We have a lot of college students coming to town in Southern California, [and] we have a lot of millennials coming from ridesharing services who are now looking to get into their own personal vehicles,” de Guzman said.

Justin KimComment