6 ms·

Setting aside SoftBank, let's talk about Fair. I'm a Fair customer, and I like the service, but I don't think it's a steal. It's a fair deal (no pun intended),

by maxaf 7y ago

Setting aside SoftBank, let's talk about Fair. I'm a Fair customer, and I like the service, but I don't think it's a steal. It's a fair deal (no pun intended), but by no means would I call it a ridiculous, out-of-this-world deal. Surely some fellow New Yorkers will remember the good old days of the Uber-Lyft price war, when it was possible to travel from the low 90-s & York to the low 80-s & Columbus for $2 on an Uber Pool. Or how during the morning rush an Uber Pool would take one from the UWS to FiDi for about $5. Those were unimaginably good deals because they were heavily subsidized by the VC cash that was flowing so easily into rideshare companies and out the other end into riders' wallets. Those were the days! Fair is nothing like that. I pay $266/month for a 2018 CPO Honda Accord that I received with 2k miles and most of its original warranty. I reckon this costs me about 15-20% more than a dealership lease of a brand new car. I consider this a fair (...) premium for the flexibility that a Fair lease affords me: I can end it at any time without undue shenanigans, whereas a traditional lease would require me to either transfer it or pay an early termination fee. Why is this important? With Fair I don't feel as if some hapless VC is subsidizing my use of the vehicle. The whole thing feels like an actual business with assets and employees and some kind of plan, not a reckless gamble for market share that in itself is worth nothing to begin with. It all makes a certain kind of cold sense: when you browse Fair's app for a vehicle, the cars you see aren't actually on Fair's balance sheet until the lease has started. Since their prices aren't too good to be true, my gut tells me that, at the very least, they have a spreadsheet somewhere that spits out the price they should charge a customer after having quantified the risk of this customer ending the lease before its break-even date, thus saddling Fair with the car for which it now has to pay out of its own coffers. SoftBank being SoftBank, it's possible that Fair is one of its better bets.

robert707 7y ago
On the back end, that flexiblity to let you end at any time costs more than the 10 to 15 percent premium you pay. Equity dollars are used to recondition and transport your car and also to pay the debt on it until a new customer can get in it. Since the majority of their customer base churns through the platform with low tenure and is not retained (short term Uber drivers), it is a major problem and has destroyed every other player who tried to do short term leasing. You need a longer tenure to cover the cost of turning the car around. Your gut is very wrong on this one, sorry.
- maxaf 7y ago
  > Equity dollars are used to recondition and transport your car Not true! I get charged at the end of my lease for any "wear & tear above normal". Fair allows the customer to pre-pay a monthly surcharge to avoid the lump sum W&T charge at the end. Transport is cheap: I can get the car towed across town for <$100, which is less than 40% of a single monthly payment. > Since the majority of their customer base churns through the platform with low tenure and is not retained (short term Uber drivers) How can you possibly know that? Here in NYC driving for Uber is not a short-term thing by any means. TLC licensing cost and the time it takes to obtain this license is sufficient overhead to lock Uber drivers in for a long time in the hope of perhaps one day breaking even. Fair also charges a relatively hefty (I paid ~$2k) lease start fee in order to discourage customers from churning too quickly. > Your gut is very wrong on this one, sorry. I encourage you to present information in support of your assertion.
  - rockarage 7y ago
    That lease start fee has gone up about 3x, to about 6k, so obviously it was not enough. And at that rate people are better off getting a new car via a typical lease agreement.
saltking112 7y ago
How about insurance though? If it’s included it could easily be the best deal around. For young drivers like me my premiums are through the roof.
- maxaf 7y ago
  There's a "Fair Insurance" product which, IIRC, is not available in my market (NYC). I got the impression that it does cost extra per month in addition to the base lease payment, but I couldn't see what the amount would have been.
jnwatson 7y ago
I cannot believe this is Fair’s business model. Any leasing company could duplicate this with a week’s planning.
busterarm 7y ago
> SoftBank being SoftBank Somehow everyone forgot that Son lost $70bn in the dot-com crash, gave him the money to do it all over again, and he's still relying on the reputation of prior (and a few current) winners. Son's track record should be a cautionary tale -- not markers of success.
- downrightmike 7y ago
  He was able to talk Steve Jobs into a network exclusive release deal on the original iphone in Japan.
  - busterarm 7y ago
    I don't know how much smooth talking that required. I don't see how Apple would have penetrated the Japanese market otherwise. iPhones were a literal sea change compared to how folks used phones in Japan at the time. iMode _dominated_ the market there.
  - throwaway2048 7y ago
    the original iphone was network exclusive to AT&T in the USA, I don't think there are many corporate visionary geniuses there personally.
    - downrightmike 7y ago
      Yeah sorry, the reason this matters is that the ipod had just come out and he saw the next step was a phone.
      - perl4ever 7y ago
        The way I remember it was everyone was anticipating the Apple phone, but nobody knew what it would be. It wasn't like only visionaries had the concept. I remember (back when Cingular was a thing) seeing the iTunes phone in a store, and thinking "really? ok, I guess.." https://www.cultofmac.com/444315/apple-history-motorola-rokr-e1/ https://www.cultofmac.com/444315/apple-history-motorola-rokr... Now in restrospect, apparently the party line was it was a massive failure, because that's what everything is that isn't the largest success in history. But living through it, it seemed like just a headfake before the inevitable "real" Apple phone, and an early attempt at extending the iPod to a multifunction device.
csomar 7y ago
Seems too good to be true. So I checked their website. > After you return your Fair car, you will receive a final bill, which may include any past due amounts, fees, excess wear and tear, or excess mileage. > To keep monthly payments low without locking you in to a long-term contract, every car you get through Fair requires a Start Payment. It's an upfront fee due at signing to drive away. It is not refundable past the 3-day cancellation period.

by maxaf 7y ago

robert707 7y ago

On the back end, that flexiblity to let you end at any time costs more than the 10 to 15 percent premium you pay. Equity dollars are used to recondition and transport your car and also to pay the debt on it until a new customer can get in it. Since the majority of their customer base churns through the platform with low tenure and is not retained (short term Uber drivers), it is a major problem and has destroyed every other player who tried to do short term leasing. You need a longer tenure to cover the cost of turning the car around. Your gut is very wrong on this one, sorry.

maxaf 7y ago
> Equity dollars are used to recondition and transport your car Not true! I get charged at the end of my lease for any "wear & tear above normal". Fair allows the customer to pre-pay a monthly surcharge to avoid the lump sum W&T charge at the end. Transport is cheap: I can get the car towed across town for <$100, which is less than 40% of a single monthly payment. > Since the majority of their customer base churns through the platform with low tenure and is not retained (short term Uber drivers) How can you possibly know that? Here in NYC driving for Uber is not a short-term thing by any means. TLC licensing cost and the time it takes to obtain this license is sufficient overhead to lock Uber drivers in for a long time in the hope of perhaps one day breaking even. Fair also charges a relatively hefty (I paid ~$2k) lease start fee in order to discourage customers from churning too quickly. > Your gut is very wrong on this one, sorry. I encourage you to present information in support of your assertion.
- rockarage 7y ago
  That lease start fee has gone up about 3x, to about 6k, so obviously it was not enough. And at that rate people are better off getting a new car via a typical lease agreement.

saltking112 7y ago

How about insurance though? If it’s included it could easily be the best deal around. For young drivers like me my premiums are through the roof.

maxaf 7y ago
There's a "Fair Insurance" product which, IIRC, is not available in my market (NYC). I got the impression that it does cost extra per month in addition to the base lease payment, but I couldn't see what the amount would have been.

jnwatson 7y ago

I cannot believe this is Fair’s business model. Any leasing company could duplicate this with a week’s planning.

busterarm 7y ago

> SoftBank being SoftBank Somehow everyone forgot that Son lost $70bn in the dot-com crash, gave him the money to do it all over again, and he's still relying on the reputation of prior (and a few current) winners. Son's track record should be a cautionary tale -- not markers of success.

downrightmike 7y ago
He was able to talk Steve Jobs into a network exclusive release deal on the original iphone in Japan.
- busterarm 7y ago
  I don't know how much smooth talking that required. I don't see how Apple would have penetrated the Japanese market otherwise. iPhones were a literal sea change compared to how folks used phones in Japan at the time. iMode _dominated_ the market there.
- throwaway2048 7y ago
  the original iphone was network exclusive to AT&T in the USA, I don't think there are many corporate visionary geniuses there personally.
  - downrightmike 7y ago
    Yeah sorry, the reason this matters is that the ipod had just come out and he saw the next step was a phone.
    - perl4ever 7y ago
      The way I remember it was everyone was anticipating the Apple phone, but nobody knew what it would be. It wasn't like only visionaries had the concept. I remember (back when Cingular was a thing) seeing the iTunes phone in a store, and thinking "really? ok, I guess.." https://www.cultofmac.com/444315/apple-history-motorola-rokr-e1/ https://www.cultofmac.com/444315/apple-history-motorola-rokr... Now in restrospect, apparently the party line was it was a massive failure, because that's what everything is that isn't the largest success in history. But living through it, it seemed like just a headfake before the inevitable "real" Apple phone, and an early attempt at extending the iPod to a multifunction device.

csomar 7y ago

Seems too good to be true. So I checked their website. > After you return your Fair car, you will receive a final bill, which may include any past due amounts, fees, excess wear and tear, or excess mileage. > To keep monthly payments low without locking you in to a long-term contract, every car you get through Fair requires a Start Payment. It's an upfront fee due at signing to drive away. It is not refundable past the 3-day cancellation period.