New York City is probably
the least car-friendly place in the United States. Its streets are perpetually
gridlocked and garage fees cost more than rent in other parts of the
country. Most people who live in the city don’t even own cars and regard
them as an occasionally necessary nuisance. Mostly, they hail a cab. Or they
walk or take the subway.
So it makes perfect sense for a
major car company to relocate the
headquarters of its luxury division there.
Right?
Well, yes – in a way. The new way.
GM’s way.
Which is not to sell you a car.
Nor for you to own one. Instead you will “experience the brand” – these are the
words of Cadillac’s new honcho, Johan de Nysschen. You will experience Cadillacs
in the same way that you experience a stay at a fancy hotel:
Briefly.
Occasionally.
And, of course, expensively.
You will sign up for a subscription – a
monthly/yearly fee, like a membership at a health club. This will allow you to
use the facilities; to access different GM vehicles – in order to “experience”
them.
De
Nysschen does not seek buyers. He seeks consumers –
his word. “We wanted to see luxury
consumption through the eyes of our consumers,” he said about
the move to NYC.
Consumption. In
other words, short-term rentals of various models in the GM inventory rather
than owning or even leasing one single car. Use by the hour/day/weekend – and
so on. The car is never yours. The payments never end. Consume, consume,
consume.
Such a deal!
Well, it is – for GM.
And for any other car company
that follows this new consumption-based business model. Which – if GM’s
admittedly bold attempt to “disrupt” the way the car business works succeeds –
they will follow.
In which case, our transition to
a modern-era company town model in which debt is perpetual and the
serfs’ consumption is in proportion to their debt and no one except the
latter-day equivalent of our feudal overlords owns anything will have
taken another great leap forward.
But first, the money – which
is why they’ll
follow it, probably.
The
margins on a new car sale are pretty thin. And new cars are becoming so
expensive that fewer marks are stepping up. A crunch is inevitable.
But imagine how much more money a car
company could make if, rather than extract a single monthly payment of say $500
from a single individual who is making those payments toward the purchase of
the car – and who stands as the legal owner of the car the moment he takes
possession of it and is therefore entitled to all the usufructs of ownership,
so long as he continues to make those payments – the owner of the car (GM)
could rent that
same car to multiple
people each month, each of them making an individually smaller
but collectively much larger total payment.
Instead of $500 a month
generated, perhaps several times that sum. That is very goodbusiness.
For
GM.
For
the marks, not so much.
The analogy – to an extent –
would be a house that you pay a fee to use occasionally – i.e., a timeshare –
along with many other people who also pay to use it occasionally. It is a
hugely profitable arrangement for the owner of the property, who is collecting
the payments. And there is certainly an element of convenience and even savings
for the occasional users, who are not burdened with having to maintain the
place and who would otherwise have been facing a much larger monthly rental or mortgage
payment.
But they will never have any
equity in the house. The accumulated value goes to the owner, along with your
rental check.
Just as – under GM’s new
business model – you will never have equity in the car. Debt, ongoing – to
permit momentary consumption.
This may work for some people,
much as timeshare vacation properties work for some people – in the sense that
they are convenient
and there are fewer
strings attached.
Except
that a car is fundamentally a different thing. It is, to begin with, a regular
necessity for most people – those who do not live in New York City, at least.
Who prefer not to live in an urban hive like NYC.
It
is also inconvenient to
not have a car ready and waiting in your garage (or outside your home) that you
can just get into and go wherever you need to go on the spur of the
moment, without having had to plan for the trip in advance.
As
opposed to the experience of
waiting for your rental-for-today to show up.
And
then experiencing having
to adjust the seat, the mirrors and everything else – which were set by the
prior user to suit his needs, not yours. And then experiencing getting
used to how the unfamiliar-to-you car drives, how its controls – how its
gadgets – work.
Those
are some of the practical considerations which no one seems to be considering.
But the more ominous aspect is
the stringsthat
will be attached. The legal strings.
If you own a car, it is legally
your property – even while you are making payments.
Among other things, you have a
right to privacy within it. If, as an example, a third party were to install a
“bug” in your car, in order to record your conversations or to video you or to
track your movements, they would have committed a criminal act. They are
subject to prosecution. But if you are merely the temporary user of the
car, which remains the legal property of another party . . . that party has
every right to set the terms and conditions of use, which can (and will)
include their right to monitor usage and perhaps monitor you, too.
If that seems a bit too far,
consider that most over-the-road truckers who do not own their rigs are subject
to exactly such monitoring – both audio and video. And consider that GM – and
not just GM – has already installed at least some of the technology needed to
keep track of you and what you do in cars already on the roads – and nominally
owned by you.
What
do you suppose will happen when GM holds the title?
Also,
as the owner, you have full control over the vehicle. You can use it as you
wish. If you are not the owner, on the other hand, it is the owner who will
decide how you will be allowed to
use his car. This will include everything from being required to buckle-up to
not being permitted to drive in ways that the owners do not approve of –
including when you
drive and where,
not merely how.
If
you doubt this is the way things are headed, consider what Tesla is already doing. Its
cars receive “updates” from the Tesla nexus – these “updates” controlling what
the car does, and whether you want them or not. And these Teslas are –
nominally – the property of their “owners.”
Wait
and see what happens when Tesla embraces the GM model – which it will. So will
other car companies. There is just too much money on the table for them to
resist – and too much control (for them) in the offing.
Anyone
half-awake within the car business knows this is coming – like a freight train
barreling down on someone tied to the tracks. You can feel the rumble, see the
light in the distance getting closer.
It
is all part of a concerted effort to control transportation; arguably, to
eliminate the free movement of individuals in this country. Every authoritarian
state pursues this course because it is essential to establishing the state’s
total control of the populace. If people are still free to move – unmonitored,
uncontrolled – then they are still largely free people.
It
is of a piece with the drive to eliminate cash, to disarm the populace – with
the end goal being a continental company town of – as the great comedian George
Carlin put it – obedient
workers, keeping their heads down – and their noses to the
grindstone.
If
we let it happen.
If
we let them do this to us.
There
is still time.
.
. .
Got a question about cars – or anything else? Click on the “ask Eric” link and
send ’em in!
If you like what you’ve found
here, please consider
supporting EPautos.
We depend
on you to
keep the wheels turning!
If you
prefer not to use PayPal, our mailing address is:
EPautos
721 Hummingbird Lane SE
Copper Hill, VA 24079
721 Hummingbird Lane SE
Copper Hill, VA 24079
