General Motors is winding down a car-subscription service it rolled out nearly two years ago for Cadillac, underscoring the challenges traditional car makers face as they try to diversify into new transportation offerings.
The Book by Cadillac service—available in Los Angeles, Dallas and New York—will shut down operations by the end of this year, according to people briefed on the plan. Subscribers paying $1,800 a month for access to Cadillac’s model lineup will have 30 days from the time they are notified to turn their vehicles in, these people said.
The subscription plan, launched early last year, lets members swap in and out of different Cadillac models for the monthly fee, providing an alternative for customers who might not want to make the long-term commitment of buying or leasing a car.
A GM spokesman confirmed the service was ending but said it could restart later. “We are hitting the pause button for a brief time to make some tweaks to Book [by Cadillac] based on our learnings,” the spokesman said.
A letter prepared this week for subscribers in New York said Book by Cadillac would close its program in that city Dec. 1 and included an offer to purchase or lease a new Cadillac, a person who reviewed the letter said.
Some aspects of Cadillac’s program proved more costly than expected, people familiar with the program said. Snags with the back-end technology used to support the service made some customer-service functions tedious and time-consuming, adding costs for the company, these people said.
Many car companies have introduced subscription plans in the past year, betting people are interested in treating personal transportation much like a Netflix account.
Read more at The Wall Street Journal.
{Matzav.com}
