The trend for a flat rate has reached the world of car users: Carvolution AG rents out cars for periods of between three months and several years at a fixed price – allowing customers to choose the vehicle to suit their circumstances.
Context
Drivers can buy, lease or hire their cars. And, for the past few years, they have also been able to subscribe to a car. This has a fixed monthly price, like leasing, but it is cheaper because the cars are already configured. Carvolution AG is the Swiss market leader in car subscriptions. The start-up offers around 50 models, of which 15% (and rising) are electric cars. Small cars start at a monthly cost of CHF 299: the price covers all insurance, taxes, servicing, maintenance and tyre changes, in addition to the hire charge. All subscription cars are new or as good as new. Carvolution operates throughout Switzerland, with a focus on smaller towns and urban areas. There are currently no plans to expand abroad.
Technology
Business economist Léa Miggiano and three other people founded Carvolution in Bern in 2018, based on an existing UK and US business model. The basic idea is that subscribers should always be able to choose the car that suits their family situation (e.g. the addition of children) or their current place of residence (e.g. a move to the countryside). Unlike leasing, a car subscription includes all costs, and the subscription can be taken out for just a few months. This means that people who are happy to get around by bike in the summer can have a car just for the winter. Subscribers receive a standardised package, but Carvolution also gives them options for excess, legal protection or parking damage.
Maturity
What is innovative about this car subscription provider is the way the subscription is sold. Highly sophisticated subscription management is required to offer customers the best prices. Over the last few years, Carvolution has gradually optimised its service – for example, by introducing an advance payment option, and a mileage package for infrequent drivers. The young company has an equity capital of CHF 50 million but has to hold its own against a considerable number of competitors. It received a vote of confidence at the beginning of 2024, when major British bank Barclays and other investors poured CHF 200 million into the fleet expansion.
‘Car subscriptions are taken out for the time and circumstances for which they are needed. This conscious approach makes driving more sustainable.’ Léa Miggiano, co-founder and Marketing Manager of Carvolution AG
**This profile is taken from the 2nd edition of the Cleantech Startup Overview, published in 2024. Read the full report here.
