Transformational thinking hits the car industry?
The cost of the average used car in Europe is now cheaper than the cost of gasoline to drive it for a year.
And when phone handsets could be purchased instead of rented/leased, their prices dropped. The quality was much worse — those old Western Electric or AT&T phones were build like tanks — but no one cared.
That’s why “free” cars make sense: because the purchase price is now a small fraction of their lifetime costs. Shai’s company is taking a bigger view of the business they’re in–rather than selling cars, they’re selling personal transportation, and charging a rate proportional to use. When fuel seemed nearly free compared to price of the car, companies sold cars. Now cars seem free compared to the cost of the fuel. Thus an opportunity for a car company that thinks different. [From Next: Free Cars!]
Interesting to think that we may see increased commodification in the auto industry: less frills and shininess, maybe more innovative designs to improve economy since that’s becoming the chief expense.
Free seems a long way from here, but what do I know?