Porsche is expanding its app-based subscription service to four new cities in the U.S. and Canada, deepening its experiment in flexible car ownership even as other automakers back away.

The luxury sports-car brand of Volkswagen AG is adding Las Vegas, San Diego, Phoenix and Toronto to the pilot program it started in Atlanta almost two years ago. The price of its two-tiered monthly subscription service, Porsche Passport, will increase $100 to as much as $3,100 a month. Porsche Drive, a shorter-term program, has a four-hour minimum that costs as little as $269.

Automakers are dangling subscriptions to try to reach younger consumers accustomed to streaming movies on Netflix or summoning rides from Uber, with mixed results. While Porsche and Mercedes-Benz are expanding their tests, General Motors Co. pulled the plug on its Cadillac Book subscription service in December and Volvo Cars is battling California car dealers over its Care by Volvo program, which combines lease, insurance and maintenance into one monthly payment.

“It’s not fundamentally a cheaper way of consuming your mobility,” said Mark Wakefield, head of the automotive practice at consultancy AlixPartners. “There has to be enough people that want to pay for the convenience factor.”

Most subscription services cost more than a comparable three-year lease, which limits their growth potential, according to a study that car-shopping researcher Edmunds released last year.

That may not be a problem for a company like Porsche AG. The $2,100 tier of Porsche Passport is 20% more expensive than leasing a Porsche for three years, the automaker said. Still, 180 people subscribed over the course of two years, 80% of whom had never owned one before. Typical users were in their mid-40s, eight years younger than the average Porsche owner.

“The question is not a bookkeeping exercise or accounting; the question is how much are you willing to pay for that much freedom?” said Klaus Zellmer, head of Porsche Cars North America.

Monthly subscribers can drive as many as 20 different model variants, have vehicles delivered to them, and only pay for gas, after a $595 one-time activation fee. Insurance and maintenance are included. Porsche chose the four additional cities based on their support of the brand and the company’s expectation of interest.

Newbies to Brand
While the company’s biggest challenge with a subscription business is “making it ‘pencil’” financially, Zellmer said, there are long-term benefits. “If you engage 80% new people that have not engaged with your brand before, that’s certainly worth a lot,” he said.

Chris Bohlmann, a 27-year-old software engineer in Atlanta, has been using the service since March, after he bought a used Honda Accord that turned out to be a lemon. Bohlmann, who has an accident and a speeding ticket on his record, said he would already be spending about $1,000 a month if he leased a new car, versus the $2,000 he pays for Passport.

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