9 ms·

The Car Bundle

37 points by yoloswagins 7y ago

Animats 7y ago
If you’re a car OEM, I think there’s an incredible opportunity over the next decade to build a new bundle around recreational travel and leisure, where you can put together a really compelling bundle offering full of products from other companies that are complementary but not competitive: hotel and resort chains, cruise lines, kids programs, maybe even airlines. Thomas Cook travel - 1841-2019. "All inclusive". They got so all inclusive they had their own hotels and airline at the end. But the trend is away from all-inclusive vacations. This is an old idea.
- netsharc 7y ago
  The author is saying bundle the car with recreational travel, not just your bog standard vacation bundle.
  - rcMgD2BwE72F 7y ago
    If there's still some competition in the car market, then any single manufacturer can break this whole plan by going low-cost, capturing market shares just by not playing the bundling game. Actually, the un bundling has already started with EV: you pay once for a car and a few cents per Kwh (and, when self-driving comes around, just a few cents per miles), and voilà: no more expensive fuels and car maintenance, and no more war to fund either.
    - josephpmay 7y ago
      isn't that more bundling, not unbundling? Instead of having to budget extra for fuel and car maintenance, it's "included" in the cost.
zweep 7y ago
The “cloud car” that Waymo and Uber promise is really cool... until you have kids. I think it will be big business for singles but as a parent I can’t imagine not owning a car. The car has the car seats, books, toys, snacks, diapers, etc in it at all times. I can’t imagine Ubering around schlepping all that shit.
- x0x0 7y ago
  Or a dog / pet that sheds.
- cerberusss 7y ago
  That cloud car probably isn't all that interesting, cost wise. You'll only use it, if you don't want the contract of a lease car. Otherwise, it'll be quite expensive. In Europe, we have a number of car sharing systems. They all have daily prices around 70-80 euros. As soon as you need a car for two or more days a week, you might as well lease it. Leasing is cheap, compared to the car sharing prices. I think it has to do with the fact that a lot of the cost of the car is depreciation, which is highly dependent on the mileage driven. Which goes up if you share a car. Plus a shared car needs a host of care takers; app builders, help desk people, car cleaners, etc. Everyone's betting big on cloud cars, but in fact they're expensive compared to the mass produced item that's called a car.
  - mft_ 7y ago
    I wonder whether those urban car-sharing schemes have quite low utilisation rates overall, so have relatively high prices to attempt some semblance of a business model? Two data points which might support this: 1. Consolidation. Drive Now and Car2Go (two big players) are merging. 2. ‘Traditional’ car hire can be way cheaper - we recently had a decent car for (an almost unbelievable) ~€10/day while on holiday. Now I know that we might be comparing apples with oranges here, with the car sharing companies already including features which you pay extra for with the traditional car hire, and of course there are differences in convenience... but that’s still a huge price delta.
    - noizejoy 7y ago
      Actually the business model seems very much in question, judging by the fact that Share Now, formerly Car2Go, is leaving North America [1] [1] https://www.theverge.com/2019/12/18/21028517/sharenow-car2go-leaving-north-america-bmw-daimler-cities-date https://www.theverge.com/2019/12/18/21028517/sharenow-car2go...
    - 7y ago
gombosg 7y ago
> ...dragging 2 tons of car along with you just to go get groceries is a little bit like paying $5 for single day of cable TV even though all you watched that day was two minutes of the weather channel... If only humanity would start to realize this, that would alone help to save us from the coming climate catastrophe. By the way the article does a nice job at describing why this is so hard for hundreds of millions of people, especially without help from the government in the form of nudging and infrastructure development.
- bambax 7y ago
  This is a big reason why I moved to an electric bike. Being alone in a car made to transport 5 to 7 people, moving 2 tons of metal just to drive a person weighting maybe 80 kg, is insane. Anytime somebody is alone on a flight it makes the front page of Reddit. Yet the same thing in a car feels completely normal (it is "normal" in the sense that it represents maybe 90% of all car trips; but it should be very shocking).
  - geff82 7y ago
    At least in Europe, because of the rather restricted parking space, it makes a lot of sense to really think about the needs. I use a small car to drive to work in the city which will soon be replaced by an even smaller electric car, because usually it is only me and one daughter in it. My wife, in comparison, has a 7-seater Minivan. Its outside dimensions are still smaller than a BMW 3-Series (except height) which is used every day with at least 4 seats filled, often 5 or 6. Due to its relative compactedness, it still fits into all parking spaces. We really gave a lot of thought into which cars we have. There was the initial impulse to spend good money on an SUV, too. But then, after rational thinking, we did not take that path.
  - gombosg 7y ago
    I totally agree and an electric bike (even a small motorbike) is a great choice for daily commutes. I really hope that car ownership will decline once we'll have usable self-driving technology with shared fleets.
jerome-jh 7y ago
There is probably room for specialization in the car industry: - small, light, efficient, cheap 1 or 2 seater for commuting - 5 or 6 seater with cargo for holidays: little automation and noisy but only used 1 month in a year The cost for both may be still lower than a luxury "bundle" and more energy efficient overall. But I think the main problem with the car industry, is that if they start making aerodynamically efficient cars, they will all look the same, and nobody will by them. And if they make efficient, low power and cheap cars nobody will buy the powerful and expensive ones. So marketing dictates: make distinctive and inefficient cars, make cheap and low power models stunningly inefficient.
- leetcrew 7y ago
  > But I think the main problem with the car industry, is that if they start making aerodynamically efficient cars, they will all look the same, and nobody will by them. I don't think this is as true as people think. look at high-end sports cars. they're all designed for low drag (although downforce components add some of that back) but they have very distinctive designs. other than the badges and grilles, most economy sedans already look pretty much the same anyway. > And if they make efficient, low power and cheap cars nobody will buy the powerful and expensive ones. I don't think this is true either. cars like the Honda fit already exist, but that doesn't stop people from buying Porsches. anecdotally, I've noticed something of a bimodal distribution in car buyers. people either buy the cheapest thing that fits their use case or the nicest car they can afford. I don't see why that would change if the bottom went even lower.
  - dsfyu404ed 7y ago
    There's a lot of room for improvement in aerodynamics of modern sedans. The bulbous front bodywork and large wheels that are in style are not good for aerodynamics. If we went back to the low hoods and 24" diameter tires of the early 90s then that would be a substantial improvement. Most subcompact hatches already do this because their boxy form factor is not that great for aerodynamics and they need to make it up somewhere.
    - 7y ago
zby 7y ago
There is a huge difference between the TV bundle and car as a bundle - the marginal cost of serving one customer for the TV bundle is near zero, for the car bundle it is not. When someone buys a TV bundle just for news it does not cost anything more to offer him also sports, but offering a SUV for the price of a cheap car to drive to work would cost the seller a lot. The car as a bundle is maybe interesting thing to think about - but it is an order of magnitude less important than when thinking about bundling zero marginal cost goods.
- neogodless 7y ago
  I'm a little sour on the whole "benefits customers" half of the equation. If I love history and have zero use for sports, I don't benefit by paying $2 more. So it can benefit some customers, but it's not universal. With a car, they couldn't charge much for just Bluetooth or heated seats, and not enough people would pay for bigger wheels on their own. But then they bundle them and no on wants to pass on the first two so they accept the higher cost of the third, and the seller nets more overall profit. Still don't really see it as a benefit for most buyers though.
zcw100 7y ago
All that and not one word about the price of fuel. Going with the all-in bundle only makes sense when the price of hauling around all those extras is cheap. If gas went to $8/gal you'd see people change in a real hurry. If people are buying SUVs it's because they're making a bet that fuel is inexpensive now and will continue to be for the life of the vehicle. They're taking a risk. Just ask someone who owned an F-250 SuperDuty what happened last time gas prices spiked. They got lucky that it didn't last to long. People aren't stupid. They're balancing a lot of variables with a log of unknowns. What's the depreciation on my car going to be? What are fuel costs going to be? Can I afford the payments? How is this going to effect my insurance rates? Do I plan on moving a long distance in the time I'm going to own the vehicle and will I have to sell it early? Do you have kids? Do you plan on having kids? Biking to work is great. Inexpensive, good for the environment, and you get plenty of exercise but it comes with lots of downsides. What do you do when it rains? Snows? Is 10deg F outside? 100deg F? Commuting is nice but there are trade offs as well. What is my employer going to say when I tell them I can't make a meeting or work late because I carpool? What do I do if the person I'm carpooling with has an emergency? What if I have an emergency? If you have a kid in daycare it's not happening because they might call at any moment and tell you your kid has a fever or puked and you need to come and pick them up. Just the logistics of keeping track of who is driving is going to be a pain. "Sorry I'm late today but I thought I was driving but my carpool buddy had a doctors appointment that got rescheduled at the last minute and forgot to let me know" Life is complicated and there are no easy answers.
- eurrit 7y ago
  > If gas went to $8/gal you'd see people change in a real hurry. Gas is already over $6/gal in Europe and there is no great change in the air. Edit: $7.5/gal in the Netherlands according to https://autotraveler.ru/en/spravka/fuel-price-in-europe.html https://autotraveler.ru/en/spravka/fuel-price-in-europe.html
  - zcw100 7y ago
    How many Ford F-250s do you see on the road in the Netherlands?
Yizahi 7y ago
I highly doubt it would be a vacation bundle. Younger people who will be car buyers in the future aren't traveling via tour companies, they are buying low cost tickets and airbnb/booking aparts. Their lifestyle won't change that much soon. Bundling heavily overprised comfortable hotels or cruises won't help with advertising much. Personally I think that good potential may be in renting bundles, or more general transportation bundles - for example a package which costs as much a as a new car which provides for example leased car for X days or kilometers per year, in any city, possibly in multiple countries, plus maybe some airline miles, car rental things etc. Included with all car service, maybe fuel/charging, tow services, etc. Basically car-as-a-service, for people who need good personal (this is a key, as opposed to public options) transport often enough but not every work day. But all this is just a hypothesis.
NohatCoder 7y ago
There is a pretty big logical fallacy in this article. Bundling intellectual property goods makes sense because the marginal cost is virtually zero. Automobiles cost real money to build. The notion that an SUV is the whole package seems weird, as the base idea of those models is off-road ability, which virtually nobody needs. The idea that driving is free once you own the car doesn't make a lot of sense either. Wear and tear is expensive.
nayuki 7y ago
I recognize the photo. It's at College St & Yonge St, Toronto, Canada.
ken 7y ago
> Everyone ends up paying an approximately fair price for the one product that they were going to buy no matter what, and then gets a very good deal on everything else. [...] If you’ve ever bought a new car, you’ve probably faced down the endless lists of extra add-on features in cars (bigger rims, heated seats, LED lights, whatever) are always, always sold in these “packs” where 5 or 6 totally unrelated things are offered together in a bundle. Now you know why. Those 'packs' always seemed like a rip-off even if you wanted all of the items. I can't imagine people think they're a fair price for just one of the items. Then again, the manufacturer of my car only seems to offer individual items today, not package upgrades. They did have a "cold weather package" when I bought my car, which is obviously a set of related features. > There’s a good reason why SUVs have become so popular: they’re the everything bundle. One of the two components of the bundle, mentioned above, is a Miata for driving, and an SUV is not at all good at driving like a Miata. > Unless you can replace all of the important jobs that a car does for you, all at once, then competing against the car means competing against free. He's right about this. This is why I keep hearing the bus advocates say it's cheaper than owning a car, which is true but irrelevant. They're not going to win over most drivers until they make it cheaper than driving a car you already own.

37 points by yoloswagins 7y ago

If you’re a car OEM, I think there’s an incredible opportunity over the next decade to build a new bundle around recreational travel and leisure, where you can put together a really compelling bundle offering full of products from other companies that are complementary but not competitive: hotel and resort chains, cruise lines, kids programs, maybe even airlines. Thomas Cook travel - 1841-2019. "All inclusive". They got so all inclusive they had their own hotels and airline at the end. But the trend is away from all-inclusive vacations. This is an old idea.

netsharc 7y ago
The author is saying bundle the car with recreational travel, not just your bog standard vacation bundle.
- rcMgD2BwE72F 7y ago
  If there's still some competition in the car market, then any single manufacturer can break this whole plan by going low-cost, capturing market shares just by not playing the bundling game. Actually, the un bundling has already started with EV: you pay once for a car and a few cents per Kwh (and, when self-driving comes around, just a few cents per miles), and voilà: no more expensive fuels and car maintenance, and no more war to fund either.
  - josephpmay 7y ago
    isn't that more bundling, not unbundling? Instead of having to budget extra for fuel and car maintenance, it's "included" in the cost.

zweep 7y ago

The “cloud car” that Waymo and Uber promise is really cool... until you have kids. I think it will be big business for singles but as a parent I can’t imagine not owning a car. The car has the car seats, books, toys, snacks, diapers, etc in it at all times. I can’t imagine Ubering around schlepping all that shit.

x0x0 7y ago
Or a dog / pet that sheds.
cerberusss 7y ago
That cloud car probably isn't all that interesting, cost wise. You'll only use it, if you don't want the contract of a lease car. Otherwise, it'll be quite expensive. In Europe, we have a number of car sharing systems. They all have daily prices around 70-80 euros. As soon as you need a car for two or more days a week, you might as well lease it. Leasing is cheap, compared to the car sharing prices. I think it has to do with the fact that a lot of the cost of the car is depreciation, which is highly dependent on the mileage driven. Which goes up if you share a car. Plus a shared car needs a host of care takers; app builders, help desk people, car cleaners, etc. Everyone's betting big on cloud cars, but in fact they're expensive compared to the mass produced item that's called a car.
- mft_ 7y ago
  I wonder whether those urban car-sharing schemes have quite low utilisation rates overall, so have relatively high prices to attempt some semblance of a business model? Two data points which might support this: 1. Consolidation. Drive Now and Car2Go (two big players) are merging. 2. ‘Traditional’ car hire can be way cheaper - we recently had a decent car for (an almost unbelievable) ~€10/day while on holiday. Now I know that we might be comparing apples with oranges here, with the car sharing companies already including features which you pay extra for with the traditional car hire, and of course there are differences in convenience... but that’s still a huge price delta.
  - noizejoy 7y ago
    Actually the business model seems very much in question, judging by the fact that Share Now, formerly Car2Go, is leaving North America [1] [1] https://www.theverge.com/2019/12/18/21028517/sharenow-car2go-leaving-north-america-bmw-daimler-cities-date https://www.theverge.com/2019/12/18/21028517/sharenow-car2go...
  - 7y ago

gombosg 7y ago

> ...dragging 2 tons of car along with you just to go get groceries is a little bit like paying $5 for single day of cable TV even though all you watched that day was two minutes of the weather channel... If only humanity would start to realize this, that would alone help to save us from the coming climate catastrophe. By the way the article does a nice job at describing why this is so hard for hundreds of millions of people, especially without help from the government in the form of nudging and infrastructure development.

bambax 7y ago
This is a big reason why I moved to an electric bike. Being alone in a car made to transport 5 to 7 people, moving 2 tons of metal just to drive a person weighting maybe 80 kg, is insane. Anytime somebody is alone on a flight it makes the front page of Reddit. Yet the same thing in a car feels completely normal (it is "normal" in the sense that it represents maybe 90% of all car trips; but it should be very shocking).
- geff82 7y ago
  At least in Europe, because of the rather restricted parking space, it makes a lot of sense to really think about the needs. I use a small car to drive to work in the city which will soon be replaced by an even smaller electric car, because usually it is only me and one daughter in it. My wife, in comparison, has a 7-seater Minivan. Its outside dimensions are still smaller than a BMW 3-Series (except height) which is used every day with at least 4 seats filled, often 5 or 6. Due to its relative compactedness, it still fits into all parking spaces. We really gave a lot of thought into which cars we have. There was the initial impulse to spend good money on an SUV, too. But then, after rational thinking, we did not take that path.
- gombosg 7y ago
  I totally agree and an electric bike (even a small motorbike) is a great choice for daily commutes. I really hope that car ownership will decline once we'll have usable self-driving technology with shared fleets.

jerome-jh 7y ago

There is probably room for specialization in the car industry: - small, light, efficient, cheap 1 or 2 seater for commuting - 5 or 6 seater with cargo for holidays: little automation and noisy but only used 1 month in a year The cost for both may be still lower than a luxury "bundle" and more energy efficient overall. But I think the main problem with the car industry, is that if they start making aerodynamically efficient cars, they will all look the same, and nobody will by them. And if they make efficient, low power and cheap cars nobody will buy the powerful and expensive ones. So marketing dictates: make distinctive and inefficient cars, make cheap and low power models stunningly inefficient.

leetcrew 7y ago
> But I think the main problem with the car industry, is that if they start making aerodynamically efficient cars, they will all look the same, and nobody will by them. I don't think this is as true as people think. look at high-end sports cars. they're all designed for low drag (although downforce components add some of that back) but they have very distinctive designs. other than the badges and grilles, most economy sedans already look pretty much the same anyway. > And if they make efficient, low power and cheap cars nobody will buy the powerful and expensive ones. I don't think this is true either. cars like the Honda fit already exist, but that doesn't stop people from buying Porsches. anecdotally, I've noticed something of a bimodal distribution in car buyers. people either buy the cheapest thing that fits their use case or the nicest car they can afford. I don't see why that would change if the bottom went even lower.
- dsfyu404ed 7y ago
  There's a lot of room for improvement in aerodynamics of modern sedans. The bulbous front bodywork and large wheels that are in style are not good for aerodynamics. If we went back to the low hoods and 24" diameter tires of the early 90s then that would be a substantial improvement. Most subcompact hatches already do this because their boxy form factor is not that great for aerodynamics and they need to make it up somewhere.
  - 7y ago

zby 7y ago

There is a huge difference between the TV bundle and car as a bundle - the marginal cost of serving one customer for the TV bundle is near zero, for the car bundle it is not. When someone buys a TV bundle just for news it does not cost anything more to offer him also sports, but offering a SUV for the price of a cheap car to drive to work would cost the seller a lot. The car as a bundle is maybe interesting thing to think about - but it is an order of magnitude less important than when thinking about bundling zero marginal cost goods.

neogodless 7y ago
I'm a little sour on the whole "benefits customers" half of the equation. If I love history and have zero use for sports, I don't benefit by paying $2 more. So it can benefit some customers, but it's not universal. With a car, they couldn't charge much for just Bluetooth or heated seats, and not enough people would pay for bigger wheels on their own. But then they bundle them and no on wants to pass on the first two so they accept the higher cost of the third, and the seller nets more overall profit. Still don't really see it as a benefit for most buyers though.

zcw100 7y ago

All that and not one word about the price of fuel. Going with the all-in bundle only makes sense when the price of hauling around all those extras is cheap. If gas went to $8/gal you'd see people change in a real hurry. If people are buying SUVs it's because they're making a bet that fuel is inexpensive now and will continue to be for the life of the vehicle. They're taking a risk. Just ask someone who owned an F-250 SuperDuty what happened last time gas prices spiked. They got lucky that it didn't last to long. People aren't stupid. They're balancing a lot of variables with a log of unknowns. What's the depreciation on my car going to be? What are fuel costs going to be? Can I afford the payments? How is this going to effect my insurance rates? Do I plan on moving a long distance in the time I'm going to own the vehicle and will I have to sell it early? Do you have kids? Do you plan on having kids? Biking to work is great. Inexpensive, good for the environment, and you get plenty of exercise but it comes with lots of downsides. What do you do when it rains? Snows? Is 10deg F outside? 100deg F? Commuting is nice but there are trade offs as well. What is my employer going to say when I tell them I can't make a meeting or work late because I carpool? What do I do if the person I'm carpooling with has an emergency? What if I have an emergency? If you have a kid in daycare it's not happening because they might call at any moment and tell you your kid has a fever or puked and you need to come and pick them up. Just the logistics of keeping track of who is driving is going to be a pain. "Sorry I'm late today but I thought I was driving but my carpool buddy had a doctors appointment that got rescheduled at the last minute and forgot to let me know" Life is complicated and there are no easy answers.

eurrit 7y ago
> If gas went to $8/gal you'd see people change in a real hurry. Gas is already over $6/gal in Europe and there is no great change in the air. Edit: $7.5/gal in the Netherlands according to https://autotraveler.ru/en/spravka/fuel-price-in-europe.html https://autotraveler.ru/en/spravka/fuel-price-in-europe.html
- zcw100 7y ago
  How many Ford F-250s do you see on the road in the Netherlands?

Yizahi 7y ago

I highly doubt it would be a vacation bundle. Younger people who will be car buyers in the future aren't traveling via tour companies, they are buying low cost tickets and airbnb/booking aparts. Their lifestyle won't change that much soon. Bundling heavily overprised comfortable hotels or cruises won't help with advertising much. Personally I think that good potential may be in renting bundles, or more general transportation bundles - for example a package which costs as much a as a new car which provides for example leased car for X days or kilometers per year, in any city, possibly in multiple countries, plus maybe some airline miles, car rental things etc. Included with all car service, maybe fuel/charging, tow services, etc. Basically car-as-a-service, for people who need good personal (this is a key, as opposed to public options) transport often enough but not every work day. But all this is just a hypothesis.

NohatCoder 7y ago

There is a pretty big logical fallacy in this article. Bundling intellectual property goods makes sense because the marginal cost is virtually zero. Automobiles cost real money to build. The notion that an SUV is the whole package seems weird, as the base idea of those models is off-road ability, which virtually nobody needs. The idea that driving is free once you own the car doesn't make a lot of sense either. Wear and tear is expensive.

nayuki 7y ago

I recognize the photo. It's at College St & Yonge St, Toronto, Canada.

ken 7y ago

> Everyone ends up paying an approximately fair price for the one product that they were going to buy no matter what, and then gets a very good deal on everything else. [...] If you’ve ever bought a new car, you’ve probably faced down the endless lists of extra add-on features in cars (bigger rims, heated seats, LED lights, whatever) are always, always sold in these “packs” where 5 or 6 totally unrelated things are offered together in a bundle. Now you know why. Those 'packs' always seemed like a rip-off even if you wanted all of the items. I can't imagine people think they're a fair price for just one of the items. Then again, the manufacturer of my car only seems to offer individual items today, not package upgrades. They did have a "cold weather package" when I bought my car, which is obviously a set of related features. > There’s a good reason why SUVs have become so popular: they’re the everything bundle. One of the two components of the bundle, mentioned above, is a Miata for driving, and an SUV is not at all good at driving like a Miata. > Unless you can replace all of the important jobs that a car does for you, all at once, then competing against the car means competing against free. He's right about this. This is why I keep hearing the bus advocates say it's cheaper than owning a car, which is true but irrelevant. They're not going to win over most drivers until they make it cheaper than driving a car you already own.