Fair Car Subscription: An In-Depth Retrospective

In the dynamic world of automotive access, the concept of car subscriptions emerged as a flexible alternative to traditional ownership or leasing. Among the early pioneers in this space was Fair, a US-based service that, for a time, offered an intriguing proposition. However, as of August 2022, Fair ceased its operations, marking an important chapter in the car subscription narrative. This article delves into what Fair was, how it operated, and the factors that contributed to its eventual closure, offering a comprehensive retrospective for those keen to understand this innovative, albeit short-lived, model.

Fair was established as one of the US’s more prominent car subscription services, providing a diverse range of vehicles across 17 states. Its core innovation lay in its entirely app-based system, which streamlined everything from initial sign-up to vehicle collection and return. Unlike many competitors, Fair’s approach was highly personalised, tailoring vehicle availability and pricing based on the user's physical location, credit rating, age, and the specific vehicle chosen. This fluid model was designed to offer unprecedented flexibility, even allowing vehicles to be used for rideshare purposes, a significant advantage for many users.

The App-Centric Experience: How Fair Worked

The entire Fair experience revolved around its dedicated mobile application, making vehicle access as simple as a few taps on a smartphone. This digital-first approach was central to its promise of convenience and accessibility. Here’s a breakdown of the typical user journey:

• Sign-Up and Pre-Checks: Prospective subscribers would download the Fair app and complete an initial registration process. Crucially, Fair utilised the user's credit rating to filter the available vehicle inventory, ensuring that only cars within an affordable range were displayed. This proactive approach aimed to prevent overspending and manage user expectations effectively.
• Vehicle Selection: Once the pre-checks were complete, users could browse a wide array of vehicles directly within the app. Detailed information such as the vehicle's proximity, age, and specifications were readily available, allowing for informed choices.
• Arranging Collection: After selecting a vehicle, users would arrange for its collection. Fair offered a unique 'cooling off' period: a 3-day, 100-mile cancellation term, providing a crucial safety net for customers who might change their minds or find the vehicle unsuitable upon collection.
• Driving and Support: Once the vehicle was in their possession, users could drive it, knowing that basic maintenance and roadside assistance were covered as part of the subscription. Insurance was available as an additional, tailored add-on, catering to individual needs and vehicle specifics.
• Cancellation and Return: Fair prided itself on flexibility regarding subscription duration. Users could choose to cancel and return the vehicle whenever they wished. Early cancellations were handled with prorated charges, calculated a month in arrears, providing a fair and transparent exit strategy.

Understanding Fair's Flexible Cost and Fees Structure

One of Fair’s distinguishing characteristics was its highly variable pricing model. Unlike services with fixed state-wide rates, Fair’s fees were meticulously calculated based on several dynamic factors. This meant that the cost of a car could differ significantly from person to person, car to car, and even based on one's credit rating.

Because Fair sourced vehicles from local dealerships based on proximity, the pricing reflected the local market conditions and the specific vehicle's value. This dynamic approach meant that a comprehensive breakdown of fees and vehicle costs was not readily available without engaging with the platform. To get an indicative cost range, users had to download the app and enable location sharing. For exact figures, the pre-authorisation checks within the app were necessary. Furthermore, insurance, while offered, was always a separate add-on, precisely tailored to the user's requirements and the particular vehicle's value and specifications.

A Diverse and Dynamic Fleet: Brands and Models

Fair’s vehicle inventory was remarkably fluid and location-dependent. Since it sourced cars from local dealerships, the theoretical choice of second-hand cars was almost unlimited. This meant that the specific brands and models available to a user could vary greatly depending on their geographical location and, as with pricing, their credit score. This unique sourcing model contributed to a wider and more unpredictable range of options compared to competitors who might maintain a fixed, centralised fleet.

Notice Periods and the "Cooling Off" Advantage

Fair's commitment to flexibility extended to its notice periods for returns. In certain states, a subscriber could return a car within 3 days without incurring any cost. This generous policy, often referred to as a 'cooling off' period, allowed users to experience the vehicle and ensure it met their expectations without obligation. For other cancellations beyond this initial window, there was no stated notice period, but prorated charges would apply, reflecting the usage up to the point of return.

What Made Fair Stand Out?

Fair’s operational model truly set it apart from its competitors. Its strategy of sourcing vehicles directly from local dealerships based on their proximity to the user offered several distinct advantages:

• Ease of Pickup and Return: By leveraging local dealer networks, vehicle collection and return processes were designed to be straightforward and convenient for the subscriber.
• Vast and Tailored Vehicle Range: The reliance on local dealership inventories meant a potentially vast and ever-changing selection of vehicles. This also allowed for an automated tailoring of options to the user, as the app would only display cars that aligned with their credit bracket, effectively removing the temptation to overspend. Fair was diligent in incorporating all extra fees into these calculations.
• The 3-Day, 100-Mile Cooling Off Period: This unique feature provided unparalleled peace of mind. Given the wide variation in vehicle types and ages, this period allowed users to return a car with no obligations if it didn't meet their satisfaction, a significant customer-centric benefit.

Ultimately, Fair sought to make car access elegant, beautiful, and immersive, aiming to offer the deepest and widest breadth of inventory available for shopping.

Fair's Tumultuous Journey and Strategic Shifts

Despite its innovative approach and significant initial backing, Fair's journey was far from smooth. By late 2019, the company had amassed substantial debt and equity funding, including a notable partnership with Uber Technologies Inc., and achieved a remarkable valuation. However, the business quickly encountered severe difficulties, leading to layoffs, leadership changes, and even the app being taken offline multiple times.

The original strategy involved Fair purchasing cars from local dealers, holding the vehicle titles, and managing registration. Customers would subscribe via the app, collect the car from the dealer, and benefit from the 3-day/100-mile return policy. Beyond this initial period, they could return the car and end their subscription without penalty, provided the current month's fee was paid.

Investors initially rallied behind Fair, with a significant credit facility secured from SoftBank Group Corp. to scale the Uber partnership, which aimed to help rideshare drivers rent cars on short-term, weekly deals. However, Fair’s business model never proved profitable, leading to a rapid decline. A month after securing the SoftBank funding, Fair laid off 40% of its staff, and its founder, Scott Painter, stepped down due to strategic disagreements, particularly concerning the Uber involvement.

The company then underwent several attempts to restructure and relaunch. The app was shut down in October 2019 for a new management team and relaunch, the Uber partnership was pulled in February 2020, and the app was briefly restarted before being shut down again in April of that year. Even as it ceased new orders, approximately 5,000 users were still driving cars from Fair’s original model, which were subsequently sold wholesale to dealers via commercial auto auctions once returned.

The Pivot to a 'True Tech Company'

Recognising the unprofitability of its original subscription business, Fair embarked on a significant strategic pivot. Under new leadership, the company aimed to transform into a central hub for all automotive retail, shifting its focus from owning inventory to becoming a consumer-facing technology platform. This involved changing its legal name from Fair Financial Corp. to Fair Technologies Inc. and relocating its headquarters.

The new model, planned for early 2022 (though ultimately not fully realised before its cessation), centred on partnering with used car dealerships to provide leases, rather than owning its own inventory. The platform aimed to connect users with various automotive services, including:

• Loans from financial institutions (e.g., Ally Financial Inc., JP Morgan Chase Bank, Wells Fargo and Co., Bank of America, Westlake Financial Services).
• Car trade-ins.
• Customisable insurance plans, with Fair in the process of selecting a partner to offer this.
• Extended warranties.
• Scheduling car service appointments.

This strategic shift reflected a broader industry trend towards online car purchasing and a desire among consumers for more control and convenience in the buying process, without the pressure of traditional dealerships. Fair aimed to capitalise on this by becoming the go-to platform for vehicle purchasing and post-transaction mobility management.

Comparative Overview: Fair's Models

To better understand Fair's evolution, it's helpful to look at its original operational model versus its proposed strategic pivot:

Frequently Asked Questions About Fair Car Subscription

Did Fair offer car insurance?

Yes, Fair offered car insurance as a separate add-on. It was tailored to the user's specific needs and the value and specifications of the chosen vehicle, providing flexibility for subscribers to manage their coverage.

Was Fair available in the UK?

No, Fair was a US-based car subscription service. It operated across 17 states in the United States and did not have operations or services available in the United Kingdom.

What happened to Fair?

Fair faced significant financial challenges and operational difficulties, including unprofitability, layoffs, and leadership changes. After several attempts to pivot its business model, including a plan to become a broader automotive technology hub, Fair ultimately ceased trading as of August 2022.

What was unique about Fair's service?

Fair stood out due to its entirely app-based service, its unique method of sourcing vehicles from local dealerships based on user proximity, and its credit-based filtering of available cars. It also offered a generous 3-day, 100-mile "cooling off" period, allowing users to return a car if unsatisfied without obligation. The flexibility for rideshare usage was also a distinctive feature.

Could you use Fair for rideshare purposes?

Yes, one of Fair's notable features was that it allowed subscribers to use their vehicles for rideshare purposes, making it an attractive option for gig economy workers looking for flexible vehicle access.

How did Fair determine the cost of a subscription?

Fair's costs were highly variable and determined by several factors, including the user's exact physical location, their credit rating, their age, and the specific vehicle chosen. This dynamic pricing meant that exact costs required downloading the app and going through the pre-authorisation checks.

Conclusion

Fair’s journey in the car subscription landscape serves as a compelling case study of innovation, ambition, and the inherent challenges of disrupting established industries. Its app-centric model, flexible terms, and unique approach to vehicle sourcing offered a glimpse into a future where car access could be as simple and adaptable as a mobile application. However, despite its forward-thinking vision and significant financial backing, the complexities of profitability, operational scale, and strategic alignment ultimately proved insurmountable. While Fair may no longer be operational, its legacy remains in the lessons learned and the ongoing evolution of car subscription models, which continue to shape how individuals interact with and access vehicles in the modern era.

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