Ford Motor Co is Selling its Canvas Car Subscription Business
【Summary】Ford announced today it is selling off its Canvas vehicle subscription service, a wholly owned subsidiary of Ford Motor Credit Company. Ford is selling Canvas to vehicle subscription app Fair. As part of the deal, California-based Fair will acquire all of the assets of Canvas.
As personal car ownership is expected to decline, automakers, including the Ford Motor Co, are exploring car subscription models and other mobility services as a way to make up for lost revenue. However, not all of these bets for automakers have paid off.
Ford announced today it is selling off its Canvas vehicle subscription service, a wholly owned subsidiary of Ford Motor Credit Company. Ford is selling Canvas to vehicle subscription app Fair. As part of the deal, California-based Fair will acquire all of the assets of Canvas. The automaker did not disclose the sale price.
The sale ends a two-year trial for Ford that began in Aug 2017. The automaker hoped that Canvas would bridge the gap between vehicle renting and leasing.
"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.
Ford acquired Canvas in 2016, and spent much of 2017 and 2018 testing the subscription service in different markets. Subscription prices ranged from $400 to more than $1,000 per month for high-end luxury models.
Canvas subscribers were able to select a vehicle from a pool of Ford and Lincoln models for a varying range of rental periods. Subscribers could swap vehicles at any time for a $99 fee, and paid a premium for short-term rentals. Unlimited miles cost an additional $100 per month.
"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. "This acquisition underscores our shared commitment to providing consumers with the car they want on their own terms."
The Canvas sale marks the latest future-oriented venture Ford has killed. The Detroit News reported that 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 shut down its shuttle service Chariot that it acquired for $65 million in 2016.
The Detroit News reported that Ford CEO Jim Hackett has said that not all the bets the automaker 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 viable 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."
The sale of Canvas to Fair strengthens its leadership position in the vehicle subscription category, enabling the company to continue to accelerate consumer adoption and expansion throughout the United States.
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