Subscription and On-Demand Ownership Models (2025 – 2028)

Market Landscape: Evolving Ownership Preferences

The global automotive landscape is undergoing a profound shift as consumers reconsider the traditional model of car ownership. Spurred by demographic shifts, urbanisation, digitalisation, and an increasing focus on sustainability, the notion of owning a car as a status symbol or necessity is being replaced by more flexible, cost-effective, and technology-enabled alternatives. Subscription services, flexible leases, and usage-based insurance products are rapidly gaining traction as viable alternatives that cater to modern lifestyles and values.

Redefining Value in Mobility

Ownership was once synonymous with personal freedom and social status, but today’s consumers increasingly evaluate vehicle use through the lens of practicality, affordability, and environmental impact. Younger generations, particularly Millennials and Gen Z, prioritise experiences over possessions and are more comfortable accessing vehicles on demand rather than purchasing them outright.

This behavioural pivot is also evident in consumer financial decision-making. Rising costs of vehicle purchase and ownership, exacerbated by high inflation, elevated interest rates, and post-pandemic supply chain disruptions, have pushed many to explore alternatives. Subscription services and flexible leases offer predictable, bundled pricing structures that simplify budgeting while eliminating upfront capital outlay and depreciation risk.

Technological Enablement and Platform Innovation

The digital revolution is playing a central role in reshaping ownership preferences. The proliferation of mobile-first platforms has enabled consumers to compare, configure, subscribe to, and manage vehicles entirely online. This frictionless experience, powered by cloud-based platforms and integrated FinTech services, aligns closely with expectations set by the likes of Netflix, Airbnb, and Uber.

Advancements in telematics and connectivity have made it possible to accurately monitor vehicle usage in real time, enabling the rise of usage-based pricing models and dynamic insurance products. Consumers increasingly value transparency and control over how they pay for mobility, and technology is delivering on that expectation.

Urbanisation, Regulation, and Sustainability

Urban congestion, emissions regulations, and environmental awareness are also central to the changing ownership paradigm. In many dense metropolitan areas, the cost and inconvenience of owning a car, including parking, congestion charges, and limited vehicle access zones, have made ownership less attractive. Regulatory initiatives such as low-emission zones (LEZs), vehicle taxes, and congestion pricing are accelerating this trend.

At the same time, governments and municipalities are encouraging sustainable mobility through EV incentives, infrastructure investment, and data-driven urban planning. As cities become more connected and green-focused, consumers are seeking vehicle access models that are compatible with these smart city goals, favouring subscription EVs or short-term leases with integrated charging solutions.

Post-Pandemic Shifts and Economic Drivers

The COVID-19 pandemic catalysed many changes in consumer attitudes toward mobility. Remote and hybrid work models have reduced commuting needs, making full-time vehicle ownership unnecessary for many. Simultaneously, the pandemic increased health consciousness and the desire for personal mobility, fuelling temporary growth in vehicle purchases.

However, the long-term outcome has been a greater openness to hybrid usage patterns, such as combining public transport, micro-mobility, and vehicle access solutions. Flexibility, rather than ownership, has become the defining value proposition for mobility.

The Rise of ‘Mobility as a Service’ (MaaS)

Mobility as a Service, which envisions seamless multimodal travel through a single platform or subscription, is a critical driver behind evolving ownership trends. While MaaS is still in the process of maturing, its key components, (1) ride-hailing; (2) car-sharing; (3) subscription cars; and (4) integrated insurance, are converging to deliver personalised and on-demand access to mobility. Consumers, especially those in heavily urbanised environments, are receptive to the idea of subscribing to a bundle of mobility options, including cars, bicycles, scooters, and public transit.

Implications for the Automotive Sector

The shift in ownership preferences challenges OEMs, insurers, and leasing companies to redefine their roles in the mobility ecosystem. Automakers are moving downstream into service provision, insurers are adopting telematics-based pricing, and leasing providers are creating shorter-term, consumer-facing products.

Businesses that fail to adapt to this structural shift risk obsolescence, while those that develop flexible, digitally enabled mobility offerings will be best positioned to capture the loyalty of tomorrow’s consumer.

This section of our study explores the macro-level forces and consumer behaviours shaping the transition from traditional vehicle ownership to subscription-based and on-demand models.

Changing Consumer Behaviour

Consumer expectations regarding vehicle access and ownership are undergoing a marked transformation, driven by financial, environmental and lifestyle changes. Across key demographics, particularly Millennials and Generation Z, there is a clear trend towards prioritising convenience, flexibility and low-commitment usage over outright vehicle ownership.

Several behavioural trends are shaping this evolution:

• Declining appeal of ownership: Younger consumers, especially those in urban settings, increasingly view car ownership as a burden rather than an asset. High upfront costs, maintenance responsibilities and depreciation risks contribute to the declining value proposition of long-term ownership.
• Rise of the subscription economy: Digital-native consumers are accustomed to flexible, app-based services in areas such as media, food and fashion. This mindset is now extending to mobility, where the ability to swap vehicles, pause services or scale access is a core demand.
• Desire for bundled convenience: Consumers increasingly prefer packages that combine insurance, maintenance and registration into a single monthly fee, reducing friction and complexity.
• Workplace and lifestyle flexibility: Hybrid work patterns, the gig economy and changing family needs are also prompting demand for access-based vehicle models that can scale up or down depending on circumstances.
• Environmental and ethical considerations: Eco-conscious consumers are more likely to adopt electric vehicle subscription services or low-emission fleets without committing to ownership of a single vehicle type over several years.

As a result, the automotive value chain must adapt to a service-oriented approach, where customer loyalty is earned through usage experience rather than vehicle performance or brand prestige.

Mobility Megatrends Influencing Change

In parallel with changing consumer behaviour, several megatrends are exerting structural pressure on the automotive industry. These are encouraging the rise of subscription and on-demand models.

Urbanisation and Congestion Management

By 2025, over 60 per cent of the global population will live in urban areas. Space constraints, congestion charges and parking scarcity are reducing the attractiveness of private car ownership. Cities such as London, Singapore and Stockholm are increasingly adopting mobility-as-a-service (MaaS) frameworks to reduce reliance on privately owned vehicles.

Digital Mobility Ecosystems

Advances in telematics, artificial intelligence and data analytics are enabling platforms that offer real-time vehicle allocation, predictive maintenance, usage monitoring and personalised insurance. This technological infrastructure is essential for scalable subscription and flexible lease platforms.

Electrification of Vehicle Fleets

Governments and manufacturers are pursuing the electrification of transport at pace. Subscription models provide a low-risk gateway to EV adoption, allowing consumers to trial electric vehicles without committing to long-term financing.

Post-ownership mindset

Access-based consumption is reshaping industries across sectors, from software to entertainment. The same logic now applies to mobility, where the ability to use without owning is becoming a mainstream preference, especially in dense urban areas and among environmentally aware consumers.

Insurance Innovation

The evolution of usage-based insurance aligns well with the flexible access paradigm. Telematics-enabled pricing allows for personalised premiums, reducing costs for safe drivers and aligning incentives between providers and users.

These megatrends are not operating in isolation. Their convergence is accelerating the decline of traditional ownership and the rise of data-driven, user-focused mobility offerings.

Historical Context and Market Emergence

The concept of accessing vehicles without owning them is not entirely new. However, the current wave of subscription and flexible lease models represents a distinct evolution shaped by digital enablement, changing consumer expectations and systemic pressures.

Early Precedents

Car rental and corporate leasing services have existed for decades, primarily serving travel, business and fleet logistics needs. Car-sharing models such as Zipcar, launched in the early 2000s, introduced the idea of time-based access. However, limited vehicle availability and logistical friction restricted scalability.

Initial Subscription Experiments

Between 2016 and 2020, several automotive manufacturers, including Volvo (Care by Volvo), BMW (Access by BMW) and Porsche (Porsche Drive), launched subscription pilots. These typically targeted luxury segments and high-income consumers. Despite early enthusiasm, many of these programmes were paused or scaled back due to operational complexity, limited consumer awareness and regulatory uncertainty.

Pivot to Platform-Based Models

From 2021 onwards, third-party platforms such as Onto (UK), Clutch (Canada) and Cazoo (Europe) began offering app-based subscriptions with integrated services. These platforms focused on agility, low-commitment plans and real-time availability. The COVID-19 pandemic further reinforced demand for contactless, digital-first services and increased interest in alternatives to public transport.

Institutional Support and OEM Realignment

By 2024, automotive manufacturers increasingly began investing in subscription-ready fleet infrastructure, forming white-label partnerships with platform providers and insurers. At the same time, mobility-as-a-service (MaaS) and connected vehicle frameworks became embedded in smart city planning, creating a favourable environment for on-demand ownership models.

In summary, while the seeds of access-based mobility were sown years ago, the market is now reaching an inflection point. The period from 2025 to 2028 is expected to mark a commercial acceleration phase, transitioning from pilot schemes to mainstream adoption.

Segment Analysis: Subscription Services

Market Definition and Key Features

Vehicle subscription services provide customers with access to a car for a recurring fee that typically covers insurance, maintenance, roadside assistance, taxes and sometimes vehicle swapping privileges. Unlike traditional leasing, these services are designed for short- to medium-term use and emphasise flexibility, convenience and bundled value.

Key features include:

• Bundled cost structure: A single monthly payment covering most operational expenses
• Shorter commitment periods: Plans ranging from one month to twelve months
• Vehicle switching options: The ability to upgrade or downgrade vehicles during the contract
• Digital-first interfaces: Mobile app or web-based sign-up, scheduling and payment
• Delivery and collection services: Often included to enhance convenience

Leading providers include both OEM-led platforms (for example, Care by Volvo, Hyundai Mocean) and independent mobility startups (for example, Onto, Finn, Mycardirect). Hybrid models involving dealer networks and white-label services are also gaining traction.

Market Size and Forecast (2025–2028)

The global market for vehicle subscription services is forecast to experience a compound annual growth rate (CAGR) of 32.4 per cent between 2025 and 2028, driven by digital platform expansion, consumer preference for low-commitment models and integration with EV adoption initiatives.

Table: Global Vehicle Subscription Services Market Forecast (2025–2028)
(Figures in US$ billions)

Year	Market Size	Year-on-Year Growth (%)	Notes
2025	8.7	–	Baseline year, fragmented providers
2026	11.8	35.6	Increased OEM participation
2027	15.9	34.7	Higher EV uptake through subscriptions
2028	21.1	32.7	Emergence of pan-regional platforms

The European market is expected to lead due to regulatory incentives around EVs and urban access restrictions, while North America will see growth tied to digital retailing of mobility services. Asia-Pacific will expand primarily through partnerships in urban centres and emerging digital finance platforms.

Business Models and Pricing Structures

Pricing typically ranges from US$500 to US$1,400 per month, depending on vehicle class, mileage caps and included services. Models vary across three dominant archetypes:

• OEM-Direct Model: Provided by manufacturers using proprietary or white-labelled platforms (for example, Porsche Drive, Toyota Kinto).
• Aggregator Model: Independent platforms offering multi-brand access, often targeting younger users and EV triallists (for example, Onto, Clutch).
• Dealer-Facilitated Model: Local dealers manage inventory and logistics while digital layers handle user experience.

Revenue models are subscription-based but may include premium tiers, vehicle swaps, and mileage overages. Some providers are experimenting with dynamic pricing using seasonal demand data or real-time vehicle availability.

Margins remain relatively thin due to asset intensity, but scaling, fleet optimisation and automation are improving cost structures.

Segment Analysis: Flexible Leases

Market Definition and Operational Framework

Flexible vehicle leasing refers to short-term lease contracts with variable durations and soft exit conditions. Unlike subscriptions, these models usually do not bundle insurance or maintenance and are priced more competitively, appealing to cost-sensitive users or small businesses.

Key operational characteristics:

• Contract lengths from 1 to 24 months, often with no penalties for early termination after a minimum term
• Lower monthly rates than subscriptions, but fewer bundled services
• Target users include SMEs, business travellers, and gig workers
• Vehicles sourced from fleet leasing partners or dealerships
• Option to buy at end of lease period in some cases (lease-to-own models)

Flexible lease providers include traditional leasing companies adapting to new demands (for example, LeasePlan FlexiPlan, Enterprise Flex-E-Rent), as well as newer digital leasing platforms (for example, Wagonex, Drover).

Adoption Rates and Forecast (2025–2028)

The global flexible lease market is projected to grow at a CAGR of 18.1 per cent from 2025 to 2028. Growth is driven by the gig economy, business fleet flexibility and increased usage by urban consumers who want car access without long-term liabilities.

Table: Flexible Vehicle Leasing Market Forecast (2025–2028)
(Figures in US$ billions)

Year	Market Size	Annual Growth (%)	Key Driver
2025	11.3	–	High SME adoption in urban areas
2026	13.4	18.6	Shift from traditional leasing models
2027	15.9	18.6	Fleet partnerships with ride-hailing
2028	18.8	18.2	Expanding lease-to-own hybrids

North America leads this segment due to its mature leasing infrastructure, though the UK, Germany and the Netherlands are emerging growth hotspots in Europe.

Revenue Models and Margins

Revenue is derived from monthly lease payments, optional services (for example, insurance, servicing) and potential vehicle resale at the end of term. Margins are higher than long-term leases due to faster asset turnover and dynamic repricing. However, margin pressures increase with fleet ageing and higher logistics costs.

Many providers are pursuing fleet-as-a-service (FaaS) strategies to spread asset utilisation across different customer types and reduce idle time, improving unit economics.

Segment Analysis: Usage-Based Insurance (UBI)

What is UBI and Why It Matters

Usage-Based Insurance (UBI) is a data-driven approach to vehicle insurance where premiums are calculated based on how, when and where a vehicle is driven. UBI models leverage telematics devices, in-vehicle sensors or mobile apps to capture behavioural data such as speed, braking, cornering and mileage.

There are two main UBI structures:

• Pay-As-You-Drive (PAYD): Charges premiums based on distance travelled
• Pay-How-You-Drive (PHYD): Assesses premiums based on driving behaviour and risk profile

UBI is crucial for aligning insurance costs with actual risk exposure and is a natural complement to subscription and flexible lease models. It is also pivotal in the broader shift toward personalised mobility services and data-rich ecosystems.

Market Size and Forecast (2025–2028)

The global UBI market is expected to grow at a CAGR of 21.7 per cent, fuelled by increasing telematics adoption, regulatory support and cost-saving potential for consumers and insurers.

Table: Global UBI Market Forecast (2025–2028)
(Figures in US$ billions)

Year	Market Size	YoY Growth (%)	Notes
2025	6.1	–	Regulatory pilots expanding
2026	7.6	24.6	Embedded UBI in subscriptions
2027	9.2	21.1	OEM-insurer data sharing expands
2028	11.0	19.6	EU-wide mandates on telematics data

Adoption is most mature in the United States, the United Kingdom, Italy and South Korea. In emerging markets, mobile app-based UBI is growing rapidly due to smartphone penetration and lower in-vehicle sensor availability.

Regulatory and Privacy Considerations

UBI involves intensive data collection and processing, raising concerns over consumer privacy, data ownership and profiling risks. Key regulatory and ethical issues include the following:

• GDPR compliance in Europe, particularly concerning user consent and anonymisation
• Data portability and access rights, especially as OEMs and insurers partner to share telematics data
• Transparency in scoring algorithms and how they impact premium adjustments
• Cybersecurity and protection of real-time location data

Many regulators are encouraging innovation while calling for greater accountability and consumer control. The introduction of mobility data standards and cross-industry coalitions will be critical in establishing trust and interoperability.

Ecosystem and Value Chain

Stakeholder Mapping

The ecosystem for subscription and on-demand vehicle ownership models spans several interdependent stakeholders, each playing a distinct role in enabling service delivery, operational efficiency, and consumer value. Key stakeholder groups include:

• Vehicle Manufacturers (OEMs): Supply vehicles directly or through white-label subscription programmes; increasingly integrating telematics and embedded insurance features.
• Mobility Platforms: Digital intermediaries offering subscription services, flexible leases or access to usage-based insurance. Examples include Onto (UK), Cluno (Germany), and Autonomy (US).
• Insurance Providers: Underwrite pay-as-you-go or behaviour-based insurance policies and integrate pricing models with telematics platforms.
• Fleet Management and Leasing Companies: Own and manage vehicle inventory, optimise utilisation, and often support last-mile logistics and servicing.
• Technology Vendors: Provide software infrastructure such as customer relationship management (CRM), telematics, AI-powered pricing, and in-app user interfaces.
• Regulators and Policymakers: Influence data standards, insurance compliance, emissions policies and urban mobility zoning which affect market scalability.
• Consumers (B2C and B2B): Include individual end-users, gig economy workers, SMEs and corporate fleet buyers with varying needs for flexibility, cost-efficiency and digital convenience.

Stakeholder alignment is increasingly critical. Cross-sector collaboration is essential to deliver a seamless, secure, and scalable mobility-as-a-service (MaaS) experience.

Value Chain Dynamics

The on-demand ownership value chain consists of interconnected activities that facilitate vehicle access, manage operational logistics and ensure user satisfaction. The following stages outline the core dynamics:

Vehicle Acquisition and Financing

• OEMs and leasing businesses procure vehicles, typically through capital-intensive fleet models.
• Asset-light providers may use peer-to-peer (P2P) integrations or third-party fleets.

Platform Enablement

• Providers build or licence platforms enabling digital account management, vehicle reservations, service bundling, and payment processing.

Customer Onboarding and Verification

• Includes ID verification, driving licence validation and, in UBI-linked models, behavioural profiling.

Insurance Integration

• Subscription and lease providers integrate with insurers to embed coverage into pricing, with UBI models offering tiered or dynamic rates.

Service Delivery

• Vehicles are delivered, swapped or collected using in-house logistics or third-party networks.
• Maintenance, roadside assistance and repairs are often bundled or subcontracted.

Data Management and Analytics

• Real-time monitoring enables preventive maintenance, usage billing, and fraud detection.
• Usage data feeds into customer segmentation, churn prediction and personalisation.

Resale or De-Fleeting

• Vehicles nearing lease-end are resold through secondary markets or remarketing platforms to protect residual value and manage lifecycle costs.

The most successful value chains are vertically integrated, digitally enabled and designed around agile service operations.

Competitive Landscape

Key Players by Model Type

The competitive landscape is rapidly diversifying. Players can be broadly classified into three categories based on their dominant business model:

Table: Representative Companies by Ownership Model

Model Type	Representative Players	Core Focus
OEM-Led Subscriptions	Volvo (Care by Volvo), Porsche Drive, Toyota Kinto	Brand-loyal consumers, early EV adopters
Independent Platforms	Onto (UK), Cluno (Germany), Autonomy (US), Finn (DE/US)	Multi-brand access, flexible EV plans
Flexible Lease Providers	LeasePlan FlexiPlan, Drover, Wagonex	SME leasing, lease-to-own hybrids
UBI InsurTechs	Root Insurance, By Miles, Cuvva	Pay-per-mile or behavioural-based policies
Fleet Managers & Aggregators	ALD Automotive, SIXT+, Hertz My Car	White-labelled services, corporate clients

Consolidation is expected in the independent platform space, with acquisitions by OEMs, insurers or fleet providers likely by 2026.

Company Profiles

Onto

Onto is a UK-based pioneer in the electric vehicle subscription market, established in 2019 and quickly becoming one of the leading players transforming car access in urban environments. The company specialises in providing fully inclusive, all-electric car subscriptions that offer consumers a flexible alternative to traditional ownership or leasing.

Business Model and Service Offering

Onto operates a direct-to-consumer subscription model, where users pay a monthly fee that includes the vehicle, insurance, maintenance, roadside assistance, and charging. This bundled pricing removes the complexity and upfront costs associated with car ownership, appealing strongly to younger, environmentally conscious urban dwellers. Subscribers can choose from a range of EVs, including popular models from Tesla, BMW, Nissan, and Jaguar, allowing them to experience electric driving without the long-term commitment.

Market Position and Growth

With the UK’s aggressive push toward zero-emission vehicles and expanding charging infrastructure, Onto has capitalised on rising demand for EV subscriptions. By mid-2024, the company reported thousands of active subscribers and ambitious plans for geographic expansion. Onto’s emphasis on sustainability aligns with broader government initiatives, positioning it favourably within an increasingly green-conscious market. The company’s growth has been supported by venture capital funding and strategic partnerships with fleet management and EV manufacturers.

Technology and Customer Experience

Onto leverages a seamless digital platform that integrates vehicle booking, subscription management, and customer support through a mobile app and website. The company’s user-friendly interface, flexible subscription terms (including monthly cancellation), and rapid vehicle delivery options have helped differentiate it from traditional leasing businesses. Onto also integrates smart telematics for usage monitoring, which supports personalised pricing and optimised fleet management.

Challenges and Strategic Outlook

Onto faces challenges typical to asset-heavy subscription providers, including fleet acquisition costs, vehicle depreciation, and operational logistics. However, its focus on an all-electric fleet and integrated services creates a competitive moat in the UK market. Looking ahead, Onto is exploring partnerships with automakers and insurers to enhance product bundles and expand into corporate subscription offerings targeting SMEs.

Cluno

Cluno is a Germany-based vehicle subscription platform that has emerged as a prominent player in the European market for flexible car access. Founded in 2015 and headquartered in Munich, Cluno was acquired by Cazoo in 2021, a move that has strengthened its market presence and resource base. The company focuses on offering a user-friendly, all-inclusive subscription service that replaces traditional car ownership with flexibility and convenience.

Business Model and Service Offering

Cluno’s subscription model allows customers to access a wide range of vehicles on a monthly basis without the long-term commitments associated with leases or purchases. The monthly fee covers insurance, maintenance, taxes, and roadside assistance, simplifying the user experience. Subscribers can choose from a diverse fleet of models across segments, including compact cars, SUVs, and premium vehicles from major European and global automakers such as Volkswagen, BMW, and Mercedes-Benz.

A key feature of Cluno’s offering is the ease of vehicle swap, allowing subscribers to switch cars depending on their needs, a convenience that appeals to urban professionals, families, and businesses alike. This flexibility supports a customer-centric approach that emphasises personalisation and adaptability.

Market Position and Growth

Cluno operates primarily in Germany and Austria, regions where flexible mobility solutions are rapidly gaining traction due to changing ownership attitudes and urbanisation. The company benefits from robust demand for alternatives to car ownership, especially among younger demographics and those living in metropolitan areas. Since its inception, Cluno has amassed a substantial subscriber base and has been expanding its fleet to include electric vehicles to align with sustainability trends.

The acquisition by Cazoo has further enhanced Cluno’s capabilities by integrating the platform into a larger automotive ecosystem that includes online vehicle retail and financing solutions. This strategic alignment positions Cluno to accelerate growth and broaden its reach.

Technology and Customer Experience

Cluno utilises a fully digital platform, enabling subscribers to manage their subscriptions through a mobile app that offers vehicle selection, contract management, and support services. The company places strong emphasis on seamless user experience, transparent pricing, and hassle-free service delivery. Integration of telematics technology supports usage-based insights, which could underpin future pricing and insurance innovations.

Challenges and Strategic Outlook

Cluno faces challenges common to subscription providers, including high capital requirements for fleet acquisition and the complexity of balancing vehicle utilisation with maintenance costs. Moreover, increasing competition from both OEM-backed platforms and digital start-ups necessitates continuous innovation.

Strategically, Cluno is focusing on expanding its EV fleet, deepening customer engagement through value-added services, and leveraging Cazoo’s operational scale to improve fleet logistics and cost efficiency. Opportunities also lie in targeting corporate clients and diversifying subscription lengths to cater to broader customer segments.

Finn

Finn is a fast-growing vehicle subscription service based in Munich, Germany, that has rapidly gained attention for its carbon-neutral fleet strategy and its scalable, digital-first approach. Founded in 2019, Finn aims to simplify car access by offering customers an all-inclusive, flexible subscription experience while contributing to climate-conscious mobility.

Business Model and Service Offering

Finn operates a monthly car subscription service in which customers can choose from a curated selection of petrol, hybrid, and electric vehicles. The subscription includes registration, insurance, taxes, servicing, maintenance, and delivery, with the flexibility to cancel after a fixed period, typically ranging from 6 to 12 months. The offering is fully digital, with customers able to subscribe online and have their vehicle delivered to their doorstep.

The service targets a wide range of users, including professionals seeking convenience, corporate customers requiring temporary fleets, and environmentally minded consumers who prefer EVs without the long-term commitment. Finn differentiates itself by combining high service levels with a transparent pricing model and the ability to swap vehicles with minimal hassle.

Market Position and Growth

Although originally focused on the German market, Finn has expanded internationally, including a notable launch in the United States. Its aggressive growth is supported by strategic fleet partnerships with manufacturers such as BMW, Tesla, and Audi, and by securing significant venture capital backing.

By 2024, Finn had grown its fleet to tens of thousands of vehicles and was consistently expanding its EV portfolio. The company sets itself apart by offering a carbon-neutral experience: it offsets the lifecycle emissions of every subscribed vehicle by investing in certified climate protection projects. This sustainability-led approach resonates with increasingly eco-conscious consumers and aligns with European Union emissions targets.

Technology and Customer Experience

Finn’s digital platform is designed for user convenience, with simple online booking, transparent monthly costs, and no hidden fees. Behind the scenes, Finn uses data analytics for demand forecasting, vehicle allocation, and maintenance planning. The company also uses customer insights to iterate on fleet composition and improve the subscription interface.

Its streamlined logistics and customer support ensure a high satisfaction rate, while integration with EV charging partners enhances the experience for electric vehicle users.

Challenges and Strategic Outlook

Finn’s asset-heavy model and expansion into the US expose it to operational complexities, including vehicle depreciation risk, regulatory variation, and logistics management. The company must also navigate competition from OEM-backed platforms and established leasing businesses entering the subscription space.

However, Finn’s emphasis on sustainability, premium customer service, and international scalability positions it well to become a category leader. In the future, Finn is expected to deepen B2B offerings, enhance vehicle customisation options, and continue investing in green mobility solutions.

Root Insurance

Root Insurance is a US-based insurtech firm founded in 2015 and headquartered in Columbus, Ohio. It is widely recognised for pioneering telematics-based car insurance that personalises premiums based on individual driving behaviour. As one of the most prominent players in the usage-based insurance (UBI) space, Root combines technology and data science to disrupt traditional underwriting models and appeal to digitally native consumers.

Business Model and Product Offering

Root’s core innovation lies in its mobile-first insurance model. The company uses smartphone sensors to monitor driving behaviour during a test period, typically two to four weeks, before offering a personalised premium quote. The app tracks data such as acceleration, braking, cornering, phone use while driving, and mileage. Safe drivers are rewarded with lower rates, while high-risk drivers are filtered out altogether.

This risk-based pricing approach allows Root to offer competitive premiums and increase transparency. In addition to personal auto insurance, Root has expanded into renters and homeowners insurance in selected states, though vehicle insurance remains its core focus. The company sells directly to consumers via its app and website, avoiding traditional agent-based channels and reducing overheads.

Market Position and Growth

Root initially launched in Ohio and gradually expanded across the US, eventually receiving licences to operate in over 30 states. It gained traction by targeting younger drivers who are often underserved or overpriced by legacy insurers. Root went public in October 2020 on the NASDAQ, raising over $700 million. However, post-IPO, it has faced significant challenges, including increasing loss ratios and high customer acquisition costs.

Despite financial headwinds, Root remains a key player in the digital insurance space. It has continued to invest in its data science capabilities, pricing models, and automation processes. The company has also formed strategic partnerships to distribute its insurance through OEM platforms and online marketplaces.

Technology and Customer Experience

Root is notable for its use of smartphone telematics, machine learning algorithms, and predictive analytics to assess risk and automate claims. Its app-centric experience allows for fast policy onboarding, transparent pricing, digital ID cards, and simple claims submissions. Root’s technology infrastructure enables continuous learning, refining pricing models based on real-time data.

The app’s intuitive interface and usage-based model appeal particularly to millennials and Gen Z drivers who prioritise digital convenience and cost efficiency.

Challenges and Strategic Outlook

Root has struggled with profitability, as underwriting losses and churn have challenged its ability to scale sustainably. Additionally, the UBI market is becoming more competitive with entries from traditional insurers adopting telematics. Regulatory scrutiny over data privacy and the use of behavioural analytics also poses ongoing risks.

However, Root is recalibrating its strategy by focusing on underwriting discipline, refining its target segments, and enhancing risk prediction models. If these efforts succeed, it could stabilise margins and reinforce its market leadership in behaviour-based insurance.

Metromile

Metromile is a San Francisco-based insurtech company known for pioneering pay-per-mile auto insurance in the United States. Founded in 2011, Metromile built its business model around a core insight: many drivers, particularly in urban areas, use their vehicles infrequently and should not be charged the same insurance premiums as high-mileage drivers. The result was a usage-based insurance (UBI) model that charges drivers based on how much they actually drive, rather than relying solely on traditional actuarial variables.

Business Model and Product Offering

Metromile’s insurance model consists of a base monthly rate plus a per-mile charge. This structure makes the product especially attractive to urban dwellers, remote workers, retirees, and others with limited vehicle use. Unlike Root, which uses smartphone telematics to monitor driving behaviour, Metromile uses a proprietary device, the Metromile Pulse, that plugs into a vehicle’s OBD-II port to track mileage and collect driving data.

The company’s offerings extend beyond basic insurance. It also provides a digital claims process, real-time tracking for vehicle health and diagnostics, and anti-theft features through its mobile app. These value-added services create a more engaging and informative customer experience while enhancing customer retention.

Market Position and Growth

Metromile was one of the earliest businesses to implement a pure pay-per-mile model at scale and grew its customer base primarily in high-density markets such as California, Illinois, and Arizona. The company went public via SPAC in 2021, initially drawing attention for its tech-forward approach and cost-saving potential for low-mileage drivers.

However, like many insurtech businesses, Metromile struggled with underwriting losses and profitability challenges. In 2022, it was acquired by Lemonade Inc., another high-profile digital insurance company, in a move that aimed to create operational synergies and expand Lemonade’s reach into auto insurance.

Technology and Customer Experience

Metromile emphasises automation and convenience across the customer journey. Its app enables easy policy management, digital claims filing, and real-time support. The Pulse device collects granular data that can be used not only for billing but also for crash detection and fraud prevention.

The company uses machine learning to streamline the claims process and accurately assess damage, often approving simple claims within minutes. These capabilities align well with the expectations of digital-first consumers.

Challenges and Strategic Outlook

Metromile has faced profitability concerns due to high acquisition costs and the operational burden of hardware deployment. Furthermore, regulatory constraints around telematics use and consumer privacy continue to affect the UBI segment. Its acquisition by Lemonade offers an opportunity to stabilise its financial model, expand into new states, and unify auto insurance offerings with renters and homeowners products under a single digital umbrella.

Volvo

Volvo Cars, headquartered in Gothenburg, Sweden, is a globally recognised premium automotive manufacturer known for its strong emphasis on safety, design, and environmental responsibility. In recent years, Volvo has become a notable player in the mobility-as-a-service (MaaS) landscape through the introduction of vehicle subscription and flexible ownership offerings under the Care by Volvo brand. This move reflects Volvo’s strategy to reshape its relationship with customers and respond to evolving mobility expectations.

Business Model and Mobility Offerings


olvo’s flagship subscription programme, Care by Volvo, was launched in 2017 and positions the company as one of the first traditional OEMs to embrace direct-to-consumer car subscriptions. Under this model, customers pay a flat monthly fee that includes the vehicle, insurance, servicing, maintenance, taxes, and roadside assistance. Subscriptions typically run for 24 months, but with flexible cancellation options available after a shorter period.

The offer is designed to compete with both leasing companies and tech-led subscription services. It appeals to consumers seeking transparency, convenience, and the ability to drive a new Volvo without the burdens of ownership. Volvo includes a curated selection of its newer models in the programme, often emphasising plug-in hybrids and fully electric vehicles like the XC40 Recharge and C40 Recharge.

Market Position and Strategic Expansion

Volvo’s subscription services are active in key markets such as Sweden, Germany, the United States, and the United Kingdom. In the US, the company has integrated its programme into the dealership network while also offering a fully online experience. Its dual-channel approach helps Volvo maintain dealer relationships while modernising customer acquisition.

Volvo has reported strong interest from younger, tech-savvy urban consumers and has used subscription data to gain insights into user behaviour and vehicle preferences. This feedback loop supports its transition towards electrification and digital sales.

Technology and User Experience

Volvo has invested in digital infrastructure that supports seamless subscription onboarding, including credit checks, contract management, and vehicle delivery, all handled online or via mobile. The company also integrates vehicle connectivity features for real-time maintenance alerts, remote locking, and charging management in EV models.

As part of its broader digital transformation, Volvo aims to have 50% of its sales online by the end of the decade, with subscription expected to play a significant role in that transition.

Challenges and Strategic Outlook

Volvo faces several industry-wide challenges in scaling subscription services, including regional regulatory barriers, insurance integration complexities, and pricing strategy against traditional leasing. Furthermore, managing the balance between online direct sales and traditional dealerships remains delicate.

However, Volvo’s early-mover advantage, premium brand equity, and commitment to electrification give it a strategic edge. By integrating mobility services with its core offering and continuously refining Care by Volvo, the company is well-positioned to play a leading role in the shift from ownership to access.

Autonomy

Autonomy is a California-based electric vehicle subscription company launched in 2020 by entrepreneur Scott Painter, who was best known for founding TrueCar. The company focuses exclusively on providing flexible, all-inclusive access to electric vehicles, positioning itself as a sustainable, digital-first alternative to traditional car ownership or leasing. Autonomy aims to accelerate EV adoption in the US by lowering financial and logistical barriers for consumers.

Business Model and Service Offering

Autonomy offers a month-to-month subscription service that allows customers to drive an EV without long-term commitments, credit checks, or complex paperwork. The subscription covers the vehicle, registration, routine maintenance, roadside assistance, and standard wear-and-tear coverage. Customers are only required to pay a refundable deposit and a subscription fee that varies by vehicle model and location.

Initially, Autonomy launched with the Tesla Model 3 but has since expanded its fleet to include the Tesla Model Y, Chevrolet Bolt, and other EVs from brands such as Hyundai and Ford. The service is app-based, enabling customers to sign up, choose their vehicle, and schedule delivery, all through a mobile interface. The model targets early adopters of EVs, tech-savvy consumers, and urban residents seeking low-commitment transportation.

Market Position and Growth

Operating primarily in California, Autonomy is strategically aligned with markets where EV adoption is high and consumer expectations around digital services are mature. The company differentiates itself by focusing exclusively on EVs, addressing the growing demand for sustainable mobility solutions without ownership constraints.

Autonomy has formed partnerships with major auto manufacturers and dealership networks to ensure vehicle availability and efficient fleet management. As of 2024, the company had raised significant funding to scale its operations and expand its EV fleet nationwide. The business is also leveraging secondary market strategies to manage vehicle depreciation and improve asset recovery.

Technology and Customer Experience

The Autonomy platform is designed for a frictionless customer experience. From credit approval and vehicle selection to payment processing and delivery scheduling, all steps are handled digitally. The use of data analytics enables dynamic pricing, predictive maintenance planning, and real-time fleet optimisation.

Autonomy also offers optional insurance coverage and integrates EV-specific services like home charging guidance and public charging partnerships. These additions strengthen its position as a full-service EV mobility provider.

Challenges and Strategic Outlook

Autonomy’s asset-heavy model and limited geographic footprint pose scaling challenges. Profitability depends on careful fleet management, residual value control, and partnerships with insurance and charging infrastructure providers. As EV prices fluctuate and regulatory policies evolve, Autonomy must remain agile.

Nevertheless, its niche positioning, first-mover advantage in EV subscriptions, and emphasis on flexibility provide a compelling proposition in a market trending away from ownership. Expansion into new states and collaboration with OEMs on vehicle supply will be critical to its next phase of growth.

LeasePlan

LeasePlan is a Dutch multinational fleet management and vehicle leasing company, headquartered in Amsterdam. Established back in 1963, it has evolved into one of the world’s largest providers of vehicle-as-a-service (VaaS), managing over 1.8 million vehicles in more than 30 countries around the globe. LeasePlan serves both corporate clients and individual consumers, with an increasingly prominent role in flexible leasing and subscription-style mobility offerings.

Business Model and Service Lines

LeasePlan’s core offering is long-term vehicle leasing and comprehensive fleet management services for businesses. It provides financing, maintenance, insurance, and remarketing of vehicles, alongside sustainability consultancy and telematics-enabled driver insights. For private individuals, LeasePlan offers a consumer leasing service, known in several markets as CarNext, with contracts ranging from 12 to 48 months.

More recently, LeasePlan has embraced flexibility with products that mimic subscription models, such as short-term leases with built-in services, variable mileage contracts, and early exit options. These offerings are tailored to meet the growing demand for non-ownership access to mobility. The company’s digital platform enables online vehicle selection, contract signing, and customer support, reducing friction across the leasing process.

Market Position and Strategic Transformation

LeasePlan is a market leader in corporate fleet leasing and has been instrumental in shaping trends in vehicle lifecycle management and mobility transition. With the automotive industry shifting toward electrification and digitalisation, LeasePlan has focused on supporting clients’ fleet electrification goals and investing in sustainable vehicle fleets.

In 2022, LeasePlan agreed to merge with ALD Automotive (a subsidiary of Société Générale) in a €4.9 billion deal. The transaction aimed to create a global mobility powerhouse with enhanced scale, broader digital capabilities, and a diversified product portfolio spanning long-term leases to flexible access models.

Technology and Customer Experience

LeasePlan has invested significantly in digital infrastructure and mobility platforms. Its cloud-based systems allow fleet operators and individual users to manage vehicle contracts, maintenance schedules, insurance policies, and carbon reporting from a central interface. Through its telematics and analytics solutions, it helps companies optimise driver behaviour, reduce emissions, and lower operational costs.

The company is also exploring integrated mobility services that combine leasing with ride-hailing, public transport access, and shared vehicle fleets.

Challenges and Strategic Outlook

LeasePlan’s challenges include adapting its traditionally asset-heavy model to more fluid mobility preferences, managing used vehicle remarketing in volatile markets, and maintaining profitability in the shift to EVs. Regulatory complexities across its international markets also pose compliance challenges.

However, LeasePlan’s scale, legacy fleet expertise, and strategic merger with ALD position it well to lead in the hybrid future of leasing, subscription, and on-demand vehicle access. The merged entity is expected to accelerate innovation in sustainable and flexible mobility solutions.

By Miles

By Miles is a UK-based insurtech company specialising in pay-per-mile car insurance, designed to provide a fairer pricing model for low-mileage drivers. Founded in 2016 and headquartered in London, the company combines telematics technology with flexible billing structures to reshape how car insurance is bought and used. By Miles targets urban drivers, remote workers, retirees, and anyone who drives less than the national average, offering a cost-effective alternative to traditional annual car insurance policies.

Business Model and Product Offering

By Miles offers a two-part insurance policy: a fixed annual fee that covers the vehicle while parked, and a variable monthly charge based on the number of miles driven. This structure ensures that customers only pay for the coverage they use, incentivising more mindful vehicle usage. The service is available to drivers who log fewer than 7,000 miles annually, with an upper threshold for eligibility.

To track mileage, the company uses either a free plug-in device (the ‘Miles Tracker’) that connects to the vehicle’s OBD-II port or an integrated telematics connection for newer cars. This system also allows drivers to monitor their trips, receive alerts about vehicle health, and access driving analytics through a user-friendly mobile app.

Market Position and Customer Segments

By Miles was one of the first insurers in the UK to offer a pay-as-you-drive model focused entirely on mileage rather than driving behaviour. This approach distinguishes it from other telematics-based policies that use broader monitoring criteria such as speed, cornering, or braking.

The company appeals to environmentally conscious and cost-aware drivers, those who prefer to reduce their vehicle usage or who rely on other transport options for commuting. By positioning itself as a flexible, transparent, and customer-centric alternative to mainstream insurers, By Miles has built a loyal customer base, particularly in densely populated urban areas.

Technology and Customer Experience

The By Miles platform integrates seamlessly with digital banking, enabling real-time payments and visibility into charges. The mobile app provides an intuitive dashboard with daily mileage tracking, trip history, carbon emissions estimates, and direct access to support services. Claims can be initiated through the app, with rapid response for common queries.

The firm employs machine learning to assess risks and optimise pricing, allowing for continual adjustment as driving patterns evolve.

Challenges and Strategic Outlook

By Miles operates in a highly regulated market, where consumer privacy, data handling, and underwriting accuracy are tightly scrutinised. The company must also navigate challenges in acquiring and retaining customers without the economies of scale enjoyed by traditional insurers.

However, increasing remote work trends and consumer appetite for usage-based financial products play to its strengths. With plans to expand telematics integration and partner with OEMs, By Miles is well-positioned to scale within the broader ecosystem of flexible and digital-first insurance solutions.

Market Share Estimates and Strategic Positioning

As of 2025, no single player commands a dominant global market share in vehicle subscription or flexible leasing due to regional variations and regulatory fragmentation. However, certain trends are emerging:

Table: Estimated Market Share by Player Type (2025)

Player Type	Estimated Global Share (%)	Strategic Advantage
OEM-Led Platforms	28	Brand trust, vehicle inventory, R&D backing
Independent Platforms	33	Digital UX, flexible plans, EV-centric offers
Traditional Leasing businesses	22	Fleet scale, existing B2B relationships
UBI-Specialist Insurers	17	Algorithmic pricing, insurtech agility

Strategic Positioning Overview:

• OEMs are increasingly using subscriptions as a customer acquisition tool for EVs, viewing them as a precursor to long-term brand loyalty.
• Independent platforms are gaining traction among digital-native users, but face cost pressure due to high customer acquisition and asset management expenses.
• Fleet leasing businesses are expanding into flexible access and subscription via digital joint ventures to diversify from traditional long-term lease models.
• Insurtechs are leveraging data science to offer personalised coverage, with growing relevance in bundled mobility packages.

Strategic alliances between insurers, automakers and digital mobility platforms are expected to intensify as the market matures. Companies that can orchestrate ecosystems, rather than merely participate in them, will likely achieve competitive advantage.

Competitive Profile Matrix

The Competitive Profile Matrix provides a comparative evaluation of major players across strategic dimensions that are most relevant to the subscription services, flexible leasing, and usage-based insurance segments. Key factors include platform scalability, pricing innovation, user experience, asset management efficiency, brand strength, and data integration capabilities.

Methodology

• Each critical success factor (CSF) is assigned a weight based on its strategic importance to long-term competitiveness in the on-demand vehicle ownership space.
• Players are scored from 1 (poor) to 4 (excellent) for each CSF.
• Weighted scores are calculated by multiplying the score by the weight for each factor.
• The total score indicates the overall competitive position. A perfect score would be 4.0.

Table: Competitive Profile Matrix (2025)

Critical Success Factor	Weight	Volvo (Care)	Onto	LeasePlan	By Miles	Autonomy
Platform Scalability	0.15	3 (0.45)	4 (0.60)	3 (0.45)	2 (0.30)	4 (0.60)
Pricing Flexibility	0.10	2 (0.20)	4 (0.40)	3 (0.30)	4 (0.40)	3 (0.30)
User Experience & Digital UX	0.15	3 (0.45)	4 (0.60)	2 (0.30)	3 (0.45)	4 (0.60)
Brand Equity and Trust	0.10	4 (0.40)	2 (0.20)	3 (0.30)	2 (0.20)	2 (0.20)
Asset Management Efficiency	0.15	3 (0.45)	2 (0.30)	4 (0.60)	2 (0.30)	3 (0.45)
Data & Telematics Integration	0.15	3 (0.45)	3 (0.45)	2 (0.30)	4 (0.60)	3 (0.45)
Insurance and Risk Innovation	0.10	2 (0.20)	3 (0.30)	2 (0.20)	4 (0.40)	3 (0.30)
Ecosystem Partnerships	0.10	4 (0.40)	3 (0.30)	3 (0.30)	2 (0.20)	3 (0.30)
Total Score (out of 4.0)	1.00	3.00	3.15	2.75	2.85	3.20

Interpretation of Findings

• Autonomy leads the matrix with a total score of 3.20, benefiting from its strong digital platform, scale-oriented fleet management, and competitive user experience. Its growth is particularly tied to EV adoption and direct-to-consumer delivery models.
• Onto ranks closely with 3.15, excelling in pricing flexibility and UX. However, its asset-heavy model and regional focus could limit scalability without further capital infusion or partnerships.
• Volvo (Care by Volvo) benefits from brand trust and OEM control but scores lower on pricing and insurance innovation. Its vertically integrated approach positions it well for premium market segments.
• By Miles, focused on insurance, leads in telematics integration and risk pricing but lacks platform scalability and brand equity outside of insurance.
• LeasePlan, a legacy fleet player, performs reliably across asset efficiency and B2B service quality but lags in consumer-facing UX and pricing agility.

Strategic Takeaways

• Platform-native providers (Onto, Autonomy) are currently more competitive in consumer-facing innovation and responsiveness.
• OEMs and leasing businesses must accelerate digital transformation to remain relevant in this fast-moving space.
• Insurtechs will need ecosystem partnerships with mobility platforms or automakers to scale beyond niche UBI offerings.
• Competitive edge will increasingly depend on data monetisation, operational agility, and multi-service bundling across ownership models.

Regional Outlook

The development and adoption of subscription-based and on-demand vehicle ownership models vary significantly across global regions. These differences are influenced by regulatory frameworks, mobility infrastructure, consumer readiness, urbanisation levels, and the maturity of supporting digital ecosystems. This section of the study explores regional dynamics shaping market evolution between 2025 and 2028.

Europe

Europe is expected to remain at the forefront of innovation in mobility-as-a-service (MaaS), driven by progressive regulatory frameworks, widespread electric vehicle adoption, and high consumer receptiveness to sustainable and flexible mobility alternatives.

Key Drivers:

• Urban congestion and emission zones: Low-emission zones (LEZs) and congestion charges in cities such as London, Paris, and Berlin are encouraging consumers to abandon car ownership in favour of flexible access.
• Government support: Subsidies for electric vehicles and digital mobility platforms continue to create fertile ground for subscription services.
• EV-first platforms: Players such as Onto (UK), Cluno (Germany), and Finn (Germany) are expanding rapidly, offering subscription models bundled with insurance, maintenance, and charging.

Outlook:

• By 2028, Europe is forecast to account for over 35% of global revenue in the vehicle subscription segment.
• Subscription and flexible lease models are expected to appeal especially to younger urban users and SMEs seeking cost transparency.
• Usage-based insurance is gaining regulatory and consumer acceptance in countries like the UK, France, and the Netherlands, where digital privacy laws are becoming more harmonised with telematics use cases.

Challenges:

• Diverse insurance and leasing regulations across EU member states complicate pan-European platform scaling.
• Legacy leasing providers remain dominant in B2B markets, requiring digital challengers to differentiate through service depth and UX.

North America

North America, particularly the United States, has emerged as a key growth market for flexible mobility models, although adoption is currently uneven due to cultural preferences for ownership and regional disparities in digital infrastructure.

Key Drivers:

• Post-pandemic behavioural shifts: Increased demand for short-term access to personal vehicles over public transport alternatives.
• Auto financing fatigue: Younger consumers are increasingly rejecting long-term financing or ownership in favour of all-inclusive, commitment-light models.
• Innovative insurtech players: Companies such as Root Insurance and Metromile have pioneered the integration of UBI models, attracting cost-conscious, digitally literate users.

Outlook:

• North America is projected to comprise roughly 30% of global revenue in subscription and usage-based mobility solutions by 2028.
• Growth will be concentrated in metropolitan areas like Los Angeles, New York City, and Austin, where demand for urban mobility and EVs is stronger.
• Substantial opportunities exist in fleet-based leasing and employee mobility services, particularly for gig economy platforms and tech-sector employers.

Challenges:

• State-by-state regulatory variation presents operational complexity for national expansion, particularly in UBI and data-driven insurance.
• Consumer attachment to car ownership remains high in suburban and rural areas, limiting total addressable market (TAM).

Asia-Pacific

The Asia-Pacific region presents a high-growth yet fragmented market opportunity for subscription and on-demand vehicle ownership services. Adoption levels and market readiness vary significantly between advanced economies and emerging markets.

Key Drivers:

• Urban density and mega-cities: Major cities like Tokyo, Seoul, Shanghai, and Singapore exhibit strong demand for flexible, short-term mobility access due to space constraints and high ownership costs.
• Mobile-first economies: High smartphone penetration and digitally enabled consumers make app-based subscription and leasing models attractive.
• Rising EV infrastructure: China’s national EV strategy and aggressive investment in charging networks have enabled a proliferation of new ownership models.

Outlook:

• Asia-Pacific is expected to see the fastest growth rate (CAGR > 20%) between 2025 and 2028 in the subscription vehicle market.
• China, Japan, South Korea, and Singapore will lead adoption, while India, Thailand, and Indonesia offer long-term potential as infrastructure matures.
• UBI services are gaining traction in urban China and South Korea, where telematics adoption is supported by national smart mobility initiatives.

Challenges:

• Market fragmentation, linguistic diversity, and regulatory complexity increase barriers to entry for global players.
• Inconsistent data privacy standards may affect insurer and platform ability to scale UBI offerings in certain jurisdictions.

Summary Table: Regional Comparison of Key Indicators (2025–2028)

Region	Subscription Growth Rate (CAGR)	UBI Maturity	Regulatory Favourability	Leading Countries
Europe	15–17%	High	Strong	UK, Germany, France
North America	12–14%	Moderate	Mixed	United States, Canada
Asia-Pacific	20–22%	Varies	Mixed but Improving	China, Japan, South Korea

Opportunities and Challenges

The evolution of subscription and on-demand ownership models is being shaped by a confluence of market, regulatory, and technological forces. While the overall growth trajectory is positive, platform providers and ecosystem participants must navigate structural hurdles and seize opportunities to differentiate themselves in a rapidly shifting mobility landscape.

Growth Drivers

Multiple trends are converging to accelerate the adoption of vehicle subscription, flexible leasing, and usage-based insurance models. These growth enablers span across consumer behaviour, technology, and macroeconomic forces.

• Changing Consumer Preferences: Millennial and Gen Z consumers increasingly value access over ownership, seeking flexible mobility solutions without long-term financial commitments. This shift is reinforced by environmental awareness and urban living patterns.
• Urbanisation and Space Constraints: Rising urban density, especially in Tier-1 and Tier-2 cities globally, is rendering traditional vehicle ownership less practical. Subscription services that offer short-term or on-demand access are aligned with the needs of city dwellers.
• EV Adoption and Government Incentives: The growing availability of electric vehicles and associated subsidies are encouraging fleet operators to offer EV-based subscription models. Governments across Europe, Asia-Pacific, and North America are incentivising clean mobility, indirectly boosting the subscription economy.
• Digital Platforms and Data Integration: The emergence of robust digital platforms enables end-to-end service delivery, while telematics, AI, and IoT support advanced pricing models and real-time risk assessment. These technologies are particularly instrumental in enabling usage-based insurance.
• Residual Value and Fleet Economics: Fleet owners and OEMs see subscription and flexible lease models as a hedge against residual value volatility and an opportunity for revenue diversification beyond traditional sales.

Barriers to Adoption

Despite positive momentum, several structural and operational obstacles continue to hinder the widespread adoption of subscription and on-demand ownership models.

• Regulatory Inconsistencies: Varying rules governing insurance, consumer contracts, and vehicle leasing across jurisdictions make it difficult for platforms to scale globally or even nationally in some markets.
• Consumer Trust and Understanding: Many consumers still associate car access with long-term ownership or financing. Limited awareness of subscription benefits, bundled services, and insurance mechanics often hampers conversion.
• Profitability and Unit Economics: Subscription models, especially asset-heavy ones, often struggle with cost management due to maintenance, logistics, depreciation, and insurance bundling. Achieving scalable profitability remains elusive for several start-ups.
• Data Privacy and Telematics Consent: Usage-based insurance relies heavily on behavioural data, which raises consumer privacy concerns and faces stringent regulations in some markets. Trust in data handling and transparent opt-in processes are essential for scale.
• Fleet Supply Chain Constraints: Post-pandemic supply chain disruptions, ongoing semiconductor shortages, and fluctuating vehicle production levels have impacted fleet availability and delayed platform expansion.

Strategic Opportunities

Market participants can leverage a series of strategic initiatives to address existing barriers and create defensible advantages in the next growth phase of the industry.

• Bundling Services for Value Creation: Platforms that successfully integrate vehicle access with insurance, maintenance, EV charging, and roadside assistance will create differentiated, sticky offerings that appeal to both consumers and small businesses.
• OEM–Platform Collaboration Models: Automakers can unlock new revenue streams and brand engagement by partnering with or acquiring subscription platforms. These collaborations allow OEMs to manage lifecycle value and monetise fleet assets beyond point-of-sale.
• Expansion into SME and Fleet Segments: Small and medium-sized businesses represent a relatively untapped market for flexible vehicle access. B2B subscription and leasing packages tailored to logistics, service fleets, and employee mobility could significantly expand addressable markets.
• Smart Pricing and Telematics Innovation: Advanced analytics and real-time telematics can enable dynamic pricing, gamified safe-driving rewards, and personalised service bundles. These features are particularly attractive in the UBI space.
• Embedded Finance and Insurtech Partnerships: Embedding insurance, financing, and payments into mobility platforms offers seamless customer experiences and revenue uplift. Strategic alliances with FinTech and insurtech businesses are vital to unlocking these capabilities.
• Regional Market Tailoring: A modular go-to-market strategy that aligns pricing, insurance, and regulatory models with local market conditions will allow faster adoption across diverse geographies.

Strategic Recommendations

As the vehicle ownership landscape undergoes a transformative shift, success in the subscription and on-demand mobility ecosystem will depend on how effectively each stakeholder group adapts its strategy, capabilities, and partnerships. The following targeted recommendations offer actionable pathways to growth and resilience.

For OEMs

• Embrace Direct-to-Consumer Subscription Models: OEMs should consider launching in-house subscription platforms or white-labelled partnerships with digital providers. These platforms allow manufacturers to retain control over customer relationships, collect usage data, and optimise vehicle lifecycles.
• Redefine Product-as-a-Service: Transform vehicle offerings into service bundles that include insurance, maintenance, software updates, and roadside assistance. This shift supports recurring revenue models and better aligns with evolving customer expectations.
• Prioritise Fleet Residual Value Management: Design vehicles with subscription resale cycles in mind, using predictive analytics to forecast wear, tear, and depreciation. Optimised asset design and tracking improve profitability across multiple ownership phases.
• Localise Offerings by Market: Adapt subscription models to reflect regional market dynamics, such as regulatory frameworks, taxation, EV readiness, and urban infrastructure, to improve adoption and compliance.
• Invest in Data and UX Capabilities: Develop or acquire digital capabilities in UX design, mobile app integration, and telematics to ensure competitive parity with platform-native mobility challengers.

For Insurers

• Expand Usage-Based Insurance (UBI) Offerings: Prioritise the development of UBI policies tailored for subscription and short-term lease models. These products should account for variable vehicle access and changing risk profiles.
• Partner with Platform Providers and OEMs: Form embedded insurance alliances with mobility platforms, leasing businesses, and OEMs to offer coverage at the point of service. This improves conversion and data-sharing for risk assessment.
• Use Telematics and Behavioural Data Responsibly: Invest in data governance frameworks that ensure compliance with GDPR and local privacy laws while using telematics to personalise policies and incentivise safer driving.
• Develop Modular Insurance Products: Introduce flexible, on-demand insurance options that can be paused, resumed, or transferred across vehicles and users, mirroring the dynamics of the subscription economy.
• Target SMEs and Fleets with Tailored Products: Create scalable UBI policies and bundled commercial vehicle packages for the SME segment, which is likely to adopt subscription models for logistics and service delivery.

For Leasing Businesses

• Shift from B2B Leasing to Consumer-Facing Models: Leasing businesses should move beyond traditional fleet financing and offer short-duration consumer leases with app-based booking, dynamic pricing, and bundled services.
• Build Agile Fleet Management Infrastructure: Implement real-time fleet tracking, predictive maintenance, and usage monitoring to optimise costs and support rapid redeployment of assets between users and geographies.
• Reconfigure Residual Value Risk Management: Develop new forecasting models that account for varied utilisation patterns under subscription or short-term lease models, including electric vehicle lifecycles and battery health analytics.
• Partner with OEMs and Insurtechs: Integrate vehicle provisioning with insurance and digital customer interfaces via partnerships. Such collaboration supports end-to-end service experiences and boosts customer retention.
• Diversify Offerings with EV-Specific Plans: Design lease products specific to electric vehicles, with integrated charging plans and battery performance guarantees. EV subscriptions are a growing subsegment with strong policy tailwinds.

For Platform Providers

• Focus on UX, Transparency, and Trust: Consumer loyalty in mobility is driven by intuitive interfaces, transparent pricing, and consistent service quality. Prioritise app usability, flexible cancellation, and 24/7 support infrastructure.
• Adopt Asset-Light and Asset-Hybrid Models: Where feasible, pursue partnerships with OEMs and leasing businesses to reduce capital intensity. Hybrid approaches, owning core fleet units while outsourcing volume expansion, can balance control and scalability.
• Develop Differentiated Pricing Models: Move beyond flat-rate subscription pricing by offering kilometre-based packages, weekday/weekend plans, or credits for off-peak use. Gamified pricing can also drive loyalty and efficiency.
• Leverage Data for Personalisation and Loyalty: Use behavioural and usage data to recommend vehicles, optimise routes, predict churn, and dynamically adjust offers. Insights should feed back into product development and customer segmentation.
• Expand Geographically via Modular Market Entry: Design platform architecture to support localisation in language, pricing, insurance regulations, and vehicle supply. This allows staged expansion across multiple regional markets with minimal customisation overhead.