Ford says it’s selling its Canvas subscription service to competitor Fair, getting out of the subscription game after less than three years. Terms of the deal were not announced.
Ford acquired Canvas in 2016 as a wholly-owned subsidiary based in San Francisco as a service to pilot subscriptions to Ford and Lincoln vehicles, eventually rolling out to Los Angeles and Dallas. The company said it had amassed around 3,800 subscribers in that time, who will have the opportunity to join Fair when their current subscriptions end and will receive more information from both subscription companies.
But that number pales in comparison with Santa Monica, California-based Fair, which claims more than 45,000 subscriptions in 30 markets since launching in 2017. Ford was always fairly quiet about Canvas, and Automotive News last year reported that Lincoln executives expressed surprise over soft demand, saying that subscribers were looking for short-term solutions and often dropped out after just a few months. Ford is also in cost-cutting mode under CEO Jim Hackett’s $11 billion restructuring plan.
The Blue Oval joins Cadillac, which put its $1,800-a-month Book By Cadillac subscription service on ice late last year, citing higher costs and fewer customers than expected. Cadillac has pledged to eventually relaunch the service as a pilot in select cities, but mum’s been the word since. More recently, Volvo’s Care by Volvo subscription service has come under scrutiny from dealers and an investigation from the California Department of Motor Vehicles and has made changes to its program. Thought it also has added the XC60, XC90 and V60 to the list of available vehicles.
Fair touts itself as a “commitment-free” solution, with all-inclusive plans covering 24-7 roadside assistance, routine maintenance, insurance and other perks. It uses a mobile app to get customers prequalified, and it analyzes their eligibility and targets an affordable range of monthly payments. Customers then shop for cars and sign up for one via an initial payment that ranges by vehicle type, with the ability to keep the cars as long as they want and drop the service at any time. It peddles used cars from more than 30 different brands, none more than six years old or with more than 70,000 miles on the odometer.
Fair on Tuesday announced it has raised $500 million in loans from a group of creditors, including Mizuho Bank and Japan's SoftBank, as it looks to expand its leasing services to Uber drivers.
Founded in 2016, Santa Monica, California-based Fair, raised $385 million in a SoftBank-led funding round in December 2018. Fair has partnered with Uber to rent out cars to users who want to drive for the ride-sharing company.
Canvas says it is no longer accepting new customers and is referring potential customers to Fair as a result of the deal. CNBC reports that Fair will acquire all of Canvas’ assets, including nearly 100 employees.
Check out Autoblog’s Complete Guide to Car Subscriptions.
Information from Reuters was used in this report.
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