Ford sells vehicle subscription service Canvas
Ford Motor Co. is selling off its vehicle subscription service, ending a two-year experiment that aimed to bridge a gap between renting and leasing.
Ford's finance arm, Ford Motor Credit Co., plans to sell Canvas to a California-based car-rental app, Fair. Ford acquired Canvas in 2016, and spent much of 2017 and 2018 testing the service in different markets. The automaker did not disclose a sale price Thursday.
"Canvas built an impressive business and we learned a lot about subscription services, fleet management and the technology that underlies both," said Sam Smith, executive vice president of strategy and future products at Ford Credit, in a statement.
Canvas subscribers were able to select a vehicle from a pool of Ford and Lincoln products for a varying range of rental periods. Monthly prices ranged from $400 to more than $1,000. Subscribers could swap vehicles at any time for a $99 fee, and paid a premium for short-term rentals. Unlimited miles cost $100 per month.
Analysts a year ago were deeply skeptical demand for car rental services would swell any time soon given the high prices automakers were charging. Ford's were some of the cheapest monthly dues. Cadillac's Book by Cadillac service charges $500 to start, and an $1,800 monthly fee for access to the ATS-V, CT6, CTS, Escalade and XT5. That service allows 18 swaps per year. Ford was the only automaker churning used vehicles through its Canvas service.
But the subscription services were aimed at younger drivers who didn't want to own or lease vehicles. The flexibility of the services was thought to be attractive to that demographic. Ford's service operated in Los Angeles, San Francisco and Dallas.
The Canvas sale marks the latest future-oriented venture Ford has killed. The automaker wrote off almost the entirety of its $182 million bet on cloud-computing company Pivotal Software after that company's stock tanked. It also pulled the plug on a shuttle service, Chariot, it had acquired for $65 million in 2016.
Ford CEO Jim Hackett has said that not all the bets Ford has placed will pay off. He and his team are focused on making quicker decisions to let go of the ventures like Canvas that don't seem to have a future.
Fair, the Santa Monica-based app that's buying Canvas, operates in 30 markets and has 45,000 subscribers. The app currently has Ford models and models from other carmakers in its fleet. The sale to Fair includes the Ford vehicles currently in the Canvas fleet, a Fair spokesperson said. Current Canvas customers will be transferred immediately to Fair.
"Canvas has built innovative subscription products that are relevant to consumers today, and like Fair, has opened up new ways for consumers to gain access to mobility," said Georg Bauer, co-founder and chairman of Fair, in a statement. "This acquisition underscores our shared commitment to providing consumers with the car they want on their own terms."