This is The Takeaway from today’s Morning Brief, which you can sign up to receive in your inbox every morning along with:
Elon Musk’s innovation never stops.
What if instead of paying for what Tesla calls full self-driving (FSD) in a single go, you must instead rent the service and pay for it every month?
The departure marks a reversal of what Musk once described as an “appreciating asset.” And it’s the latest example of everything becoming a subscription product.
Perhaps not everything should be. But the model is too enticing for corporations to pass up. Especially for tech companies, which have found that it’s easier to convince people to sign up for recurring bills for new services compared to already existing ones.
When you innovate something, don’t sell it. Sell it every month.
Customers have already pushed back against a cruel future of recurring add-ons. But companies have kept up with other services, unwilling to give up on lucrative revenue streams. Having to pay for using a car’s heated seats was a consumer protection flashpoint just a few years ago.
OnStar and other connected car services live on. (Perhaps because if you innovate something, you can set new rules and profit. If you tack on heated seats? You merely provoke.)
For Tesla, a subscription model plays into its aspirations of becoming an AI and robotics powerhouse, commanding a fleet of autonomous vehicles. If you can eventually summon a robotaxi to shuttle you to your destination, you won’t actually need to own a car, the thinking goes. And firms competing with Tesla to mass-produce humanoid robots are also pursuing a robots-as-a-service model. They’re pitching robots for rent as a cost-saving measure for customers. It’s also a way to centralize data gathering.
Software lends itself to an entanglement with your lifestyle and business workflow. Oh, you want to stop paying for cloud storage? Good luck exporting your photos.
Companies also have a habit of making it easy to sign up but harder to cancel. If you type “how to cancel” into a web browser, you’ll get an autocompleted list of streaming services, productivity software, and delivery apps, suggesting that users need help navigating a labyrinth of online menus to stop getting billed.
Last year, the Federal Trade Commission reached a historic $2.5 billion settlement with Amazon over allegations that the tech giant enrolled millions of consumers in its Prime subscription without their consent and knowingly made it difficult for people to cancel.
