Challenger to Watch 2019: Fair
For the future of car ownership
Whatever else 2019 brings, it seems certain that the pace of change in the automotive category is going to pick up speed.
At one end of the spectrum, there’s a bunch of brands redefining what a car is: Electric? Hydrogen? A really bumpy underground train? Possibly (and more likely one for CTW:2022) even a helicopter-type-thing.
At the other end, there are brands catering to another fundamental shift in attitude away from the need to actually own a car, or even a driving licence. The decision around how we choose to get from A to B keeps on getting more interesting.
What’s not been very interesting (or at least, pleasant), for those who still want a car, or those who need one to work, has been how to pay for it. In the middle of all this innovation, a fundamental aspect of the category has been neglected.
A ‘typical’ new car has never been more expensive, costing roughly double what it did (in real terms) 60 years ago, and often accounting, on average, for more than half of a potential buyer’s gross annual income - well outside the reach of many. This isn’t likely to change as cars continue to become more complex.
And though it’s seen an explosion in demand over the last few decades, alternative financing models like leasing have remained complex and inflexible whilst consumer expectations, driven by a new generation of brands, have moved rapidly in the opposite direction. And of course, all this is equally true for the second hand car market.
The perfect environment for a challenger. Enter Fair.
Fair straddles the line between the Zipcars of the world and traditional leasing, offering a new kind of hybrid contract of its own devising. In its own words ‘a forward-thinking alternative to traditional car ownership.’
An entirely app-based service, Fair has aimed to create a hugely streamlined ‘buying’ process, requiring nothing more than a photo of your driver’s licence to approve potential buyers. Once you’ve selected a car, you pay a one-off fee, and then monthly payments with no minimum contract (or termination fee).
Behind the scenes, Fair matches your requirements with cars from local dealers, and then buys them on your behalf.
For the customer, Fair promises a car that’s ‘yours’ alongside affordability, simplicity and flexibility.
For the dealer, there is an opportunity to access a wider customer base whilst still selling their cars to Fair at their forecourt price, and in theory increase what Fair calls the ‘velocity of ownership’ by encouraging customers to swap their cars regularly ‘we want people to have an SUV in winter, and a convertible in the summer.’
Fair is also intimately linked with Uber, through both a partnership to provide cars to its drivers (Uber sold its leasing business to Fair in early 2018), and through the leading provider of its $385m Series B funding, SoftBank, a key investor in ride-sharing platforms around the world.
So, what does 2019 hold for Fair? Well, its aim is to grow tenfold, cornering the market as a provider for ride-sharing vehicles, whilst at the same time, tap into an increasing acceptance of alternative ownership amongst the direct-to-consumer business.