DETROIT (Reuters) - Silicon Valley’s latest mobility startup, a short-term vehicle leasing company called Canvas, is backed by old-school muscle: Ford Motor Credit Co, the dealer and consumer financing arm of U.S. automaker Ford Motor Co F.N.
From its San Francisco base, Canvas started offering variable-term leases with flexible payment options to Bay area customers in early May, with plans to eventually roll out the service to other cities.
Canvas’s roots date back to an earlier startup called Breeze.
“Our mission is to identify, test and launch financial products that meet the changing needs of consumers,” said Ned Ryan, co-founder of Breeze and chief executive officer of Canvas, in an interview.
The focus on consumers, including those who might not qualify for conventional auto leases or don’t want to make long-term financial commitments, is a pivot from Breeze’s original mission, which was to provide short-term vehicle leases to ride-sharing drivers who worked mainly for Uber and Lyft.
When both ride-sharing firms began offering lease plans of their own, including short-term financing deals through General Motors Co’s GM.N Maven subsidiary, the potential market for Breeze thinned markedly and the company ceased operations in July 2016.
Seeing a related opportunity and a broader audience, Ford Credit acquired the assets of Breeze, along with many of its executives and employees, in November 2016 and rebranded the company as Canvas.
Ford Credit recognized “the need for financial services and technology to facilitate our future vision of mobile,” said David McClelland, executive vice president of marketing and sales.
The Breeze acquisition gave Ford Credit access to a web-based platform and month-to-month vehicle “subscriptions” that bundle maintenance, insurance and roadside assistance, aimed at younger, non-traditional drivers.
Because Canvas buys used Ford vehicles coming off lease, it also gives the automaker a new source of revenue and another way to manage used-car values, which have plummeted in recent months.
Unlike Breeze, Canvas does not compete head-to-head with Maven, which offers ride-sharing drivers short-term leases on new Chevrolet Bolt EV electric vehicles and used GM vehicles, through such programs as Maven Gig and Lyft Express Drive.
Canvas is aiming at consumers who want “a simpler, more flexible alternative to car ownership,” said Ryan. “We’re addressing the void in the consumer space between daily rentals and long-term (financial) commitments.”
The pitch, Ryan added, could not be more simple: “You just add the gas.”
Editing by Jeffrey Benkoe