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Comment by azinman2 | Hacker News Reader

> Farley has said Ford’s future depends not on selling cars one at a time, but on selling features to owners to constantly update their cars like they do their phones.

I really disagree with this on so many levels, and I believe the market will ultimately reject it too. When you’re spending tens of thousands on a car, the last thing you want is some optional monthly fee for seat warmers and navigation features. This seems to be driven simply by the desire to have a monthly income versus what consumers actually want.

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>and I believe the market will ultimately reject it too.

Na, Remember the time we used to pay once for a software and own it forever?

Hardware manufacturers have been biting their teeth to get those sweet SaaS recurring revenue in anyways possible and EVs have provided a perfect opportunity for the vehicle manufacturers for that.

Future of cars could be irreparable, vendor-locked in(parts), e-waste after 3 years if governments don't strengthen and extend their existing repair laws (if any) for EVs.

But if consumers have to take a stand we have to start with the SaaS products. Something which we might use twice every three months shouldn't be getting monthly payments from us.

> Something which we might use twice every three months shouldn't be getting monthly payments from us.

Counter argument will probably be along the lines of "but we store your data even when you don't use it".

Anyway my local gym charges me monthly even if I go there only once a year.

> Counter argument will probably be along the lines of "but we store your data even when you don't use it".

Yes the cost of building the product, infrastructure, running the company changes with the economy but even then the product pricing doesn't change frequently. If it does the customer will leave for the competitor anyways monthly billing or not.

So apart from locking-in within the platform, To show the MRR, ARR for that VC money is there really any merit for monthly subscription? Not everything needs to be a Netflix, Without complex licensing, two-sided market I'm not sure why every SaaS product has to compare itself to Netflix.

I've started offering lifetime subscriptions by default to my SaaS products, mainly because it seems hypocritical to not liking to pay monthly but expecting the same from my customers. One of the advantages of being an indie is that I can do this, I understand that a startup at the mercy of investors cannot.

Do you have the option of just paying for one gym session? Most of the gyms near me have yearly/monthly subscriptions as well as allowing you to pay for a single gym session

Going to the gym once is pretty useless though, if you're not going to go regularly, just don't go.

>Something which we might use twice every three months shouldn't be getting monthly payments from us.

Agreed, but if I pay for my actual usage I'm fine with that. There's no way I'm paying for an Adobe CS monthly sub, but I'd pay a few quid a day to be able to use it as and when. That's not a reliable revenue stream for the vendors though, so I can see why they're not keen on it.

Maybe saas service leasing out subscriptions on a daily basis?

Everyone wants the mob-buisness model, were you break the users legs, if they don't pay up all they can every fortnight. Open Source runs completely contrary to that and will clash - aka locked out due to vendor pressure. Aka, you cant have blender on a autodesk system.

Can’t wait to pirate extra horsepower.

Most consumers don’t pay for software at all, though. That’s why all the “pay once for this software-in-a-box” companies basically died except for TurboTax. Saas started in B2B and is still largely a B2B phenomenon.

Consumers buy content subscriptions like Netflix or Spotify, and hardware like phones and laptops, but they largely do not (and will not) pay for software tools. Google/Facebook/Microsoft/etc has trained them this way. And no, HN readers are not normal people, so just because you do, doesn’t mean most people do.

For business customers, a monthly subscription is highly advantageous due to it turning capex into opex on the balance sheet. It reduces the need for onsite IT staff, offloads data security onto an expert 3rd party, and allows for cloud based collaboration and continuous updates—-which “buy it once and use it locally” products never could do.

Saas is a model designed around the needs of B2B, and most big Saas companies make the consumer version free, so I wouldn’t count on consumers caring enough to push back.

I always thought TurboTax was worse.

It's an application you use precisely once and then it's no good upon the next tax cycle.

> Future of cars could be irreparable, vendor-locked in(parts), e-waste after 3 years if governments don't strengthen and extend their existing repair laws (if any) for EVs.

Future is now already for some cars, Nissan Leaf is a good example of this policy - insanely priced or just unavailable batteries make perfectly good cars unusable junk - this is worse than some ICE cars which are still repairable after 15 or 20 years of usage. I'm 100% sure other brands will follow this trend.

> I really disagree with this on so many levels, and I believe the market will ultimately reject it too.

I wish this were true, but unfortunately, I think too many consumers don't think critically when making purchases, even on things as large as cars, and that's exactly why we see the proliferation of this awful subscription for everything model. Just look at how most people buy cars. Every ad and salesman talks about "How much do you want to pay per month?". And most people are fine with that line of reasoning, when even a little bit of thinking reveals how dumb it is. I'm fine with a $6,000 a month payment, for example, so long as the duration of the loan is two months. Likewise, a $400 a month payment on a used car can look quite reasonable, unless you're looking at an 84 month loan at 3.5% interest.

Looked at in isolation, the amount of the monthly payment is irrelevant when it comes to the actual cost of the car, but that's all most folks look at, and that's exactly why car salesmen love it.

It makes me shudder even more when people talk about house purchases. I heard someone say something like, "I bought a $350,000 house with $50,000 down". No, at 3.5% interest on a 30-year mortgage you just bought a $534,968 house with $50,000 down. But you can bet your life that it was sold to them as, "A beautiful home for only $X dollars a month".

This comment is hilariously reminiscent of ones on this very site when Adobe announced CC would be replacing the old "pay once" software.

Unfortunately, yeah.

Company says it's the "future of business" and consumers are pushing for it, not companies. Then one day the company switches over to a new business model to milk us all even more and completely removes any other option. Other big players roll out an identical business plan within days. Cue blog entry/tweet from the company saying people clearly love it since profits are up and they'll never return to allowing customers to just buy a one-off product.

I agree the customer doesn’t always have the last say, especially if all market players move decisively and quickly enough.

That said, Adobe has a much more influential market position where it is than Ford or any auto maker does; and Adobe didn’t slap a recurring fee on top of the one time purchase price but made the full shift to a service model.

It is quite reasonable that automakers do the same transition. Most of the people finance their cars anyway, so they pay monthly. Just move the financing burden to the automaker and add usage/features flexible billing and there you have it. Nowhere as objectionable.

Interestingly, looking at the original thread on CC [1], most of the top comments on HN were quite positive:

> I'm looking forward to switching to Creative Cloud at work [...] Going CC-only makes sense for business.

> I love Adobe CC. I would consider it the first thing Adobe has done right in a long time.

> I've been using CC since it came out [...] it's fantastic [...] They've really turned around and made this pirate into a customer.

> I think it's a great move and will benefit independent designers and creators hugely.

> I think the subscription model is far superior.

A minority of users were frustrated and made flat-out incorrect predictions, as you mentioned:

> Adobe just priced themselves solidly out of the prosumer market.

> I wonder if Adobe abandoning traditional software licensing will spur new free software development.

> I hope antitrust regulators will look at Adobe with more scrutiny.

> Adobe is going to lose plenty of money and customers over this.

But again, these were by far the minority, even on HN. I would say that opposition to the subscription model has actually increased quite a bit since Adobe's announcement nearly a decade ago.

Internet history is fun!

[1]: https://news.ycombinator.com/item?id=5663581

I switched from photoshop to gimp.

Sure, but what if you are merely leasing the car? In that case, you are already paying a monthly fee, so psychologically adding $30 to it for a navigation system isn’t that big of an ask.

It can even be justified by saying that the car isn’t yours to begin with, so the real owner has a right to charge extra for features that will now incur a maintenance cost due to your use.

this sounds like having to go to the dealership and paying for them to give you updated maps for your built-in GPS, a terrible UX.

What if upgrades were done over the air, so you didn’t have to go to a dealership. And the base cost of the vehicle comes down, now that there’s a recurring revenue component?

Would that change your mind?

Volkswagen has a system like this in production already with CarNet with subscription pricing for things like better voice control, tracking, and maps.

https://carnet.vw.com/#/plan-pricing

I think Ford's system circa 2012/2013 did OTA updates, but the problem is that they stopped making updates.

Further, there was no modularity to the hardware running the nav/entertainment/app platform, so the hardware got outclassed very quickly for apps anyway, with no ability to swap in a more powerful system.

Which is ironic, because in the 2012 Fords, it's literally just a PC behind your dash, USB ports, hard drive, and all running Windows. It sucks that people are compelled to upgrade a $50k vehicle for lack of $1000 in PC components.

I can understand why that would be a business model, but I really think the vehicle is like a smart TV - nobody should use the junky built-in "smart" platform, but instead use platforms like CarPlay and Auto to bridge/mirror their modular phone capabilities into the vehicle. Vehicles in time just need something like the OBD standard for connecting external processing/info platforms. CarPlay and Auto are steps in the right direction, but.. more abstraction/standardization/modularity please.

With autonomous automobiles subscriptions may be inevitable. They're more expensive, need updates and are better operated as a fleet. And if they depress the number of units sold that may drive prices up further thus making subscription more affordable for most.

But until that happens you can choose to just not use the premium options.

> I really disagree with this on so many levels, and I believe the market will ultimately reject it too. When you’re spending tens of thousands on a car, the last thing you want is some optional monthly fee for seat warmers and navigation features.

Remember when Tesla temporarily unlocked extra range on their (existing) customer's cars because of a hurricane? Software-mediated market segmentation is already here, and has been for a while - I think binned microprocessors are the earliest example I can think of.

One area to question with your assumption is that it's tens of thousands of dollars.

Of course this is true today. But what if an ultralight EV in 2030 only costs $1,000? How does that change your assumptions about market behavior then?

>But what if an ultralight EV in 2030 only costs $1,000

What if, we can have faster than light travel. We can't realistically have ultralight anything, unless it's on rails.

Your point seems to be that a $1k ultralight EV that 90% of people use to get around is impossible?

To me it seems inevitable. A self driving AI so no accidents, then a minimal frame to keep the wind off, an chair to sit on, and a few tires. And the batteries are swapped as a service/variable cost like gas is today. Get where you need at 60 mph.

It is indeed impossible. There’s not a scooter which costs $1k (you’d be hard pressed to find a good mountain bike for that amount).

I can't think of any half-decent bike that would cost that much, even with a steel frame.

Are we talking mountain bikes? Because you certainly aren’t getting a full suspension for $1k. The cheapest Specialized hard tail MTB is about $800.

Yes, exactly what I said - I can't think of a half-decent bike that would cost $1k, they are way over that.

Ah, I was confused by your use of “as much” - I’d have expected a phrasing of “wouldn’t cost that little” although clearly you are not wrong.

Here's a $930 EV on Alibaba, reviewed by Jalopnik. Seats 4:

https://jalopnik.com/heres-what-the-worlds-cheapest-electric...

And in the year 1990 you couldn’t buy a supercomputer that fit in your pocket for $1000 either. Today everyone has one.

What exactly makes this case different?

Dennard scaling/Moore's law. We pretty knew back then it'd happen. Most of the progress has been iterative but the basic process/lithography is still very similar. There is no indication or massive breakthrough in material science that would allow anything similar to what we have been seeing in the electronics development for the past 50 years.

> There is no indication or massive breakthrough in material science that would allow anything similar

Then you may not be paying attention. Battery costs have been dropping exponentially and we are only starting to really invest capital and scale production. Meanwhile: 1. Solid state batteries, 2. 3D printed metal, 3. Algorithmically optimized design.

Before 2018 battery production was basically negligible. We have only truly started to scale our need for storage in 2018.

Today 3D printed metal is in its infancy, but has truly significant potential. I’m very excited to see how companies like Relativity Space, etc mature this tech and how it will disrupt current manufacturing. Even just giga molding is disruptive, let alone printing which will use significantly less metal and significantly reduce capital investment for manufacturing (i.e. something like AWS for manufacturing).

You can find pretty cheap remote controlled electric cars today. Even for less than 50$... Though size might be somewhat issue. But hey aren't those in pocket also lot smaller?

Because progress is mostly done on value and not absolute costs. An IBM XT PC cost $5k in present day dollars back in 1985. Computers today are exponentially better but maintain a modest linear price adjustment.

Going back to your post verbatim, super computers today still cost hundreds of millions and need an entire building; the definition of what makes a computer “super” is what evolved, not their cost or other burdens.

Here's a $930 EV on Alibaba, reviewed by Jalopnik. Seats 4:

https://jalopnik.com/heres-what-the-worlds-cheapest-electric...

That isn’t going to pass any sort of western world safety regulation to go on roads.

You said it's impossible, I showed it's possible, and then now you say as-is it's not going to pass regulation in certain countries. Okay.

The AI = no accidents: I can see it on rails and zero chance in the next 20y to have any AI that can drive in winter conditions, or even fog.

There is no way to build any 'minimal' frame for $1k with any material that's remotely lightweight. Heck, even the current battery technology is sort of low energy density. You get around 220Wh per kg (or 0.8MJ vs gasoline's 46MJ). A hundred kg would be 22kWh. With a lightweight body - 400kg (~900lbs) [price not withstanding], highly aerodynamic model on good asphalt - I'd say 250km (155miles in freedom units) is realistic - but then you need cooling system to charge them, unless you consider they can be hot-swapped (or willing to wait longer).

What you suggest is proper futuristic stuff taken from a sci-fi flick, none of it would happen anytime soon.

It already exists, it’s called a scooter.

Well it all depends on how much it costs. If the buying price is reduced enough, an additional subscription may be interesting. It’s similar to leasing your car instead of buying, which a lot of people do.

Don’t many/most consumers finance their cars? New cars anyway? So they already pay monthly

You will pay for updates maps, tracking, instant service, etc...

its driven by elon musk.

That depends. Let's say a company wants to sell me an electric vehicle but lease the batteries. I might go for that. Given the way batteries wear out and their expense, it might work out better to pay for them over time while getting periodic upgrades as new tech emerges or the old batteries wear out.

That said, even an electric car wears out. The paint fades, the plastic oxidizes... it's not like I'd expect a modern car to last forever, but I still do favor ownership.

Renault has been there and done that with the Zoe. It turns out that the batteries last so long (8 year old Zoe batteries with 200 km on them have 85% capacity still) that battery rental is a very bad deal for consumers, especially those who would like to resell their electric car. Zoe battery lease has been phased out.

Only good time to buy one is used when the battery is almost at the point it'll be replaced.

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