
The Car Bundle - yoloswagins
https://danco.substack.com/p/the-car-bundle
======
gombosg
> ...dragging 2 tons of car along with you just to go get groceries is a
> little bit like paying $5 for single day of cable TV even though all you
> watched that day was two minutes of the weather channel...

If only humanity would start to realize this, that would alone help to save us
from the coming climate catastrophe.

By the way the article does a nice job at describing why this is so hard for
hundreds of millions of people, especially without help from the government in
the form of nudging and infrastructure development.

~~~
bambax
This is a big reason why I moved to an electric bike. Being alone in a car
made to transport 5 to 7 people, moving 2 tons of metal just to drive a person
weighting maybe 80 kg, is insane.

Anytime somebody is alone on a flight it makes the front page of Reddit. Yet
the same thing in a car feels completely normal (it _is_ "normal" in the sense
that it represents maybe 90% of all car trips; but it should be very
shocking).

~~~
gombosg
I totally agree and an electric bike (even a small motorbike) is a great
choice for daily commutes.

I really hope that car ownership will decline once we'll have usable self-
driving technology with shared fleets.

~~~
pif
> an electric bike (even a small motorbike) is a great choice for daily
> commutes.

As soon as a motorbike will be invented that can run on snowy roads, I'll
agree with you.

~~~
vvillena
The article talks about trying to fulfill all requisites for all the vehicle
buyers. A bike indeed a fast, safe commute vehicle in many cases. On snow
conditions, a lightweight vehicle with winter tires will be better than
anything else. In that case, forget the bike!

~~~
pif
> In that case, forget the bike!

That's exactly my point. I thought several times to switch to a motorbike in
order to avoid the hassle of traffic, but in the end I decided to stick to
car: in normal days, traffic is allievated enough by all the other lovely guys
who decide to ride their (motor)bikes; on the worst days (snow), I'd be in a
car anyway. I see no point in buying a motorbike just to avoid traffic if it
gets useless exactly when I'd need it most!

~~~
bambax
A motorbike is expensive; an electric bike, depending on how you acquire it,
isn't, and therefore you can have one in addition to a car. I built mine from
a regular bike and a Chinese Bafang motor, and the cost was around €800
(excluding the bike -- an additional €350 if you need to buy one new).

------
zweep
The “cloud car” that Waymo and Uber promise is really cool... until you have
kids. I think it will be big business for singles but as a parent I can’t
imagine not owning a car. The car has the car seats, books, toys, snacks,
diapers, etc in it at all times. I can’t imagine Ubering around schlepping all
that shit.

~~~
cerberusss
That cloud car probably isn't all that interesting, cost wise. You'll only use
it, if you don't want the contract of a lease car. Otherwise, it'll be quite
expensive.

In Europe, we have a number of car sharing systems. They all have daily prices
around 70-80 euros. As soon as you need a car for two or more days a week, you
might as well lease it. Leasing is cheap, compared to the car sharing prices.

I think it has to do with the fact that a lot of the cost of the car is
depreciation, which is highly dependent on the mileage driven. Which goes up
if you share a car. Plus a shared car needs a host of care takers; app
builders, help desk people, car cleaners, etc.

Everyone's betting big on cloud cars, but in fact they're expensive compared
to the mass produced item that's called a car.

~~~
mft_
I wonder whether those urban car-sharing schemes have quite low utilisation
rates overall, so have relatively high prices to attempt some semblance of a
business model?

Two data points which might support this:

1\. Consolidation. Drive Now and Car2Go (two big players) are merging.

2\. ‘Traditional’ car hire can be way cheaper - we recently had a decent car
for (an almost unbelievable) ~€10/day while on holiday. Now I know that we
might be comparing apples with oranges here, with the car sharing companies
already including features which you pay extra for with the traditional car
hire, and of course there are differences in convenience... but that’s still a
huge price delta.

~~~
netsharc
There's a study that said people thought these car sharers would mean people
would own fewer cars, but instead many car owning families used them as 2nd
cars (I suppose that's better than having 2 cars per family).

I lived in a Drive Now city and used them a few times a month when I thought
"I'm too lazy to walk to the subway and wait, and then walk home from the
subway/it's too late and the subway is 15 minutes wait", without owning my own
car. It would cost maybe 5 Euro to drive home.

------
Animats
_If you’re a car OEM, I think there’s an incredible opportunity over the next
decade to build a new bundle around recreational travel and leisure, where you
can put together a really compelling bundle offering full of products from
other companies that are complementary but not competitive: hotel and resort
chains, cruise lines, kids programs, maybe even airlines._

Thomas Cook travel - 1841-2019. "All inclusive". They got so all inclusive
they had their own hotels and airline at the end. But the trend is away from
all-inclusive vacations.

This is an _old_ idea.

~~~
netsharc
The author is saying bundle the car with recreational travel, not just your
bog standard vacation bundle.

~~~
rcMgD2BwE72F
If there's still some competition in the car market, then any single
manufacturer can break this whole plan by going low-cost, capturing market
shares just by not playing the bundling game.

Actually, the un bundling has already started with EV: you pay once for a car
and a few cents per Kwh (and, when self-driving comes around, just a few cents
per miles), and voilà: no more expensive fuels and car maintenance, and no
more war to fund either.

~~~
josephpmay
isn't that more bundling, not unbundling? Instead of having to budget extra
for fuel and car maintenance, it's "included" in the cost.

------
jerome-jh
There is probably room for specialization in the car industry:

\- small, light, efficient, cheap 1 or 2 seater for commuting

\- 5 or 6 seater with cargo for holidays: little automation and noisy but only
used 1 month in a year

The cost for both may be still lower than a luxury "bundle" and more energy
efficient overall.

But I think the main problem with the car industry, is that if they start
making aerodynamically efficient cars, they will all look the same, and nobody
will by them. And if they make efficient, low power and cheap cars nobody will
buy the powerful and expensive ones.

So marketing dictates: make distinctive and inefficient cars, make cheap and
low power models stunningly inefficient.

~~~
leetcrew
> But I think the main problem with the car industry, is that if they start
> making aerodynamically efficient cars, they will all look the same, and
> nobody will by them.

I don't think this is as true as people think. look at high-end sports cars.
they're all designed for low drag (although downforce components add some of
that back) but they have very distinctive designs. other than the badges and
grilles, most economy sedans already look pretty much the same anyway.

> And if they make efficient, low power and cheap cars nobody will buy the
> powerful and expensive ones.

I don't think this is true either. cars like the Honda fit already exist, but
that doesn't stop people from buying Porsches. anecdotally, I've noticed
something of a bimodal distribution in car buyers. people either buy the
cheapest thing that fits their use case or the nicest car they can afford. I
don't see why that would change if the bottom went even lower.

~~~
jerome-jh
> look at high-end sports cars

To my eyes, there is much less shape diversity in sports cars than customer
cars. Sedans definitely look the same but is it the optimal shape?

> And if they make efficient, low power and cheap cars nobody will buy the
> powerful and expensive ones.

That applies especially to different motors for a given car model. Several
times, I have seen the lower-end engine, although less powerful, smaller
displacement, to have the same mileage as the more powerful engine of the same
technology/generation. A fellow engineer who worked in the car industry
confirmed me (although not that clearly, because it is a sensitive subject),
that engines for the low-end range can be sold with a sub-optimal mapping.

~~~
leetcrew
> To my eyes, there is much less shape diversity in sports cars than customer
> cars. Sedans definitely look the same but is it the optimal shape?

depends what you mean. to be clear, I'm comparing cars of the same type
(obviously minivans look very different from pickup trucks). maybe it's
because I'm an enthusiast, but I would never confuse a Ferrari for a Porsche.
the design language is totally different. on the other hand, I might need to
look at the badge to know whether a midsize sedan is a Toyota, Honda, or
Nissan.

------
ken
> Everyone ends up paying an approximately fair price for the one product that
> they were going to buy no matter what, and then gets a very good deal on
> everything else. [...] If you’ve ever bought a new car, you’ve probably
> faced down the endless lists of extra add-on features in cars (bigger rims,
> heated seats, LED lights, whatever) are always, always sold in these “packs”
> where 5 or 6 totally unrelated things are offered together in a bundle. Now
> you know why.

Those 'packs' always seemed like a rip-off even if you wanted all of the
items. I can't imagine people think they're a fair price for just one of the
items.

Then again, the manufacturer of my car only seems to offer individual items
today, not package upgrades. They did have a "cold weather package" when I
bought my car, which is obviously a set of related features.

> There’s a good reason why SUVs have become so popular: they’re the
> everything bundle.

One of the two components of the bundle, mentioned above, is a Miata for
driving, and an SUV is not at all good at driving like a Miata.

> Unless you can replace all of the important jobs that a car does for you,
> all at once, then competing against the car means competing against free.

He's right about this. This is why I keep hearing the bus advocates say it's
cheaper than owning a car, which is true but irrelevant. They're not going to
win over most drivers until they make it cheaper than driving a car you
already own.

------
zcw100
All that and not one word about the price of fuel. Going with the all-in
bundle only makes sense when the price of hauling around all those extras is
cheap. If gas went to $8/gal you'd see people change in a real hurry. If
people are buying SUVs it's because they're making a bet that fuel is
inexpensive now and will continue to be for the life of the vehicle. They're
taking a risk. Just ask someone who owned an F-250 SuperDuty what happened
last time gas prices spiked. They got lucky that it didn't last to long.

People aren't stupid. They're balancing a lot of variables with a log of
unknowns. What's the depreciation on my car going to be? What are fuel costs
going to be? Can I afford the payments? How is this going to effect my
insurance rates? Do I plan on moving a long distance in the time I'm going to
own the vehicle and will I have to sell it early? Do you have kids? Do you
plan on having kids?

Biking to work is great. Inexpensive, good for the environment, and you get
plenty of exercise but it comes with lots of downsides. What do you do when it
rains? Snows? Is 10deg F outside? 100deg F?

Commuting is nice but there are trade offs as well. What is my employer going
to say when I tell them I can't make a meeting or work late because I carpool?
What do I do if the person I'm carpooling with has an emergency? What if I
have an emergency? If you have a kid in daycare it's not happening because
they might call at any moment and tell you your kid has a fever or puked and
you need to come and pick them up. Just the logistics of keeping track of who
is driving is going to be a pain. "Sorry I'm late today but I thought I was
driving but my carpool buddy had a doctors appointment that got rescheduled at
the last minute and forgot to let me know"

Life is complicated and there are no easy answers.

~~~
eurrit
> If gas went to $8/gal you'd see people change in a real hurry.

Gas is already over $6/gal in Europe and there is no great change in the air.

Edit: $7.5/gal in the Netherlands according to
[https://autotraveler.ru/en/spravka/fuel-price-in-
europe.html](https://autotraveler.ru/en/spravka/fuel-price-in-europe.html)

~~~
zcw100
How many Ford F-250s do you see on the road in the Netherlands?

------
Yizahi
I highly doubt it would be a vacation bundle. Younger people who will be car
buyers in the future aren't traveling via tour companies, they are buying low
cost tickets and airbnb/booking aparts. Their lifestyle won't change that much
soon. Bundling heavily overprised comfortable hotels or cruises won't help
with advertising much.

Personally I think that good potential may be in renting bundles, or more
general transportation bundles - for example a package which costs as much a
as a new car which provides for example leased car for X days or kilometers
per year, in any city, possibly in multiple countries, plus maybe some airline
miles, car rental things etc. Included with all car service, maybe
fuel/charging, tow services, etc. Basically car-as-a-service, for people who
need good personal (this is a key, as opposed to public options) transport
often enough but not every work day. But all this is just a hypothesis.

------
zby
There is a huge difference between the TV bundle and car as a bundle - the
marginal cost of serving one customer for the TV bundle is near zero, for the
car bundle it is not. When someone buys a TV bundle just for news it does not
cost anything more to offer him also sports, but offering a SUV for the price
of a cheap car to drive to work would cost the seller a lot.

The car as a bundle is maybe interesting thing to think about - but it is an
order of magnitude less important than when thinking about bundling zero
marginal cost goods.

~~~
neogodless
I'm a little sour on the whole "benefits customers" half of the equation. If I
love history and have zero use for sports, I don't benefit by paying $2 more.
So it can benefit some customers, but it's not universal.

With a car, they couldn't charge much for just Bluetooth or heated seats, and
not enough people would pay for bigger wheels on their own. But then they
bundle them and no on wants to pass on the first two so they accept the higher
cost of the third, and the seller nets more overall profit. Still don't really
see it as a benefit for most buyers though.

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NohatCoder
There is a pretty big logical fallacy in this article. Bundling intellectual
property goods makes sense because the marginal cost is virtually zero.
Automobiles cost real money to build.

The notion that an SUV is the whole package seems weird, as the base idea of
those models is off-road ability, which virtually nobody needs.

The idea that driving is free once you own the car doesn't make a lot of sense
either. Wear and tear is expensive.

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nayuki
I recognize the photo. It's at College St & Yonge St, Toronto, Canada.

