To those wishing to purchase a new or second hand car in 2022, good luck. With supply shortages caused by COVID disruptions and the war in Ukraine making it simply impossible for buyers to walk away from a car purchase feeling like they received a good deal.

Providing another option is Carly (ASX: CL8) which offers a range of car subscriptions (not referred to as Cars as a Service, or CaaS… yet) between $150-350 per week, with an average subscription length of just under 6 months.

The Company, which was the first flexible car subscription service in Australia and NZ, looks to have started a trend, with its FY22 results release headlined by a revenue increase of 26% to $1.25m, and an increase in its subscription revenue by 84%. Revenue improvements were recorded despite still suffering some COVID-19 lockdown impacts in the key markets of Sydney and Melbourne within the financial year.

Carly’s business model positions themselves close to the middle ground for a consumer’s time/cost ratio for car ownership. Differentiating themselves from car share or car rental services that are designed for less than two weeks of use.

This model is particularly attractive for younger drivers, namely Gen Z (18-24 year olds), of whom almost 70% said in a Carly commissioned survey that they would prefer a no-strings-attached subscription option in regards to car ownership.

Carly focuses on flexibility for subscribers, with registration, insurance, maintenance, and roadside assistance all covered under the weekly fee. Whilst no upfront deposits allows the Company to differentiate itself from its competitors as they are the only ones who offer such terms.

Given the current economic climate with many workers feeling less secure than in the past, this trend is set to continue. With Carly well positioned for growth after recently securing new asset finance facilities to meet demand.

The Company has made a push to improve margins by increasing outright ownership of its fleet, with revenues from owned and leased vehicles accounting for 31% of total revenue in FY22, as opposed to 0% in FY21. However, Carly will maintain much of its fleet as ‘asset-light’ (owned by a third party) in order to scale up or down to meet demand with less risk.

While the Company managed to pare back Net Loss by 10% to -$3m, Carly still appears a long way off reaching profitability. Additionally, investors have not seen the value in Carly’s vision just yet, with the company significantly down from its pre-COVID 2020 high of $0.40, currently sitting at $0.03 with a miserly market cap of just $3.5m.