New York Leading Charge to Ban In-Car Subscription Services

A few years back, BMW toyed with the idea of charging car owners a subscription fee to use seat warmers. It was a monstrous flop. As automakers look for more ways to get a few more bucks out of owners, New York is considering a law that would prevent in-car subscriptions like what BMW tried.

GM is looking for additional revenue, and its Super Cruise semi-autonomous technology could be a catalyst for that additional money.

The proposed law, New York Assembly Bill A1095, would ban automakers from offering subscriptions for hardware that once installed doesn’t need anything else to work, i.e. seat warmers. In short, if you buy the vehicle with the hardware installed, it should work for the price of the purchased vehicle.

“No manufacturer, dealer, or agent of a manufacturer or dealer shall offer to a consumer a subscription service for any motor vehicle feature that: (1) utilizes components and hardware already installed on the motor vehicle at the time of purchase or lease by the consumer; and (2) would function after activation without ongoing cost to or support by the dealer, manufacturer, or any third-party service provider,” the bill reads.

Not so fast

While the proposed bill, which has also passed through the state’s Senate and simply awaits Gov. Kathy Hochul’s signature, would put the brakes on what many would consider potentially excessive charges, it doesn’t eliminate the practice altogether.

New York Governor Kathy Hochul hasn’t yet signed the bill into law.

According to Motor1.com, the bill states the new law would not affect several existing vehicle features, including navigation system updates, infotainment features, satellite radio, in-vehicle Wi-Fi, and telematics services.

Perhaps the biggest exemption to the ban is the feature automakers are pursuing with plenty of gusto: autonomous driving. The legislation allows an exemption for a vehicle’s “software-dependent driver assistance or driver automation feature, or vehicle-connected services that rely on cellular or other data networks for continued operation ….”

So it seems likely that software-based semi-autonomous — and later fully autonomous — driving technology like General Motors Super Cruise and Ford’s BlueCruise will be able to charge for that technology.

More in-car subscription stories

• Hyundai Confirms New Paywall Structure for Select Vehicle Features, Sees Future in Vehicle Subscriptions
• Stellantis Reveals New AutoDrive Hands-Free Tech — But Delays Availability
• Consumers Showing a Bit More Confidence in Self-Driving Vehicles

More money

While BMW appears to be the early leader on the effort, GM’s perhaps been the most aggressive. Several years ago, GM Chair and CEO Mary Barra revealed the company believed it could get an average of nearly $150 monthly in subscription services from consumers.

Apple CarPlay and Android Auto could find themselves on the outs as automakers scrounge for new avenues to increase revenue.

Others put the numbers lower, but if GM sells even just 2 million vehicles annually, that represents nearly $300 million in new revenue. And with that in mind, GM pulled everyone’s current favorite technology from its electric vehicles: Apple CarPlay and Android Auto because it believed those two would be looking to get that money before GM could.

The early results are in on GM’s new native in-car operating system, and former CarPlay and Auto users don’t appear to be impressed. As mentioned BMW, but also Mercedes-Benz, Audi and Hyundai have all begun taking a closer look at the possibilities.

Hyundai announced last year it was developing its Hyundai Connected Mobility Service, which combines the Mocean car subscription service with Bluelink’s connectivity suite into one unified front. 

A key pillar of this is what Hyundai calls “Features-on-Demand” (FODs), which will be the equivalent of a paywall structure that other automakers have already used. The company is not saying what features will be placed into the FODs system but expect certain features with high consumer take rates to be included in an FOD plan as the company attempts to create new revenue streams through subscription pricing strategies.