The Industry's Leading Source For F&I, Sales And Technology

Article

Dealers and the On-Demand Economy

What will your store do when softening demand turns into a showroom crisis? Mobility expert says the on-demand revolution offers plenty of opportunity for resourceful dealers.

January 2018, F&I and Showroom - Feature

by Mark Thomas

Gettyimages.com/NicolasMcComber
Gettyimages.com/NicolasMcComber

There seems to be an app for everything these days, with consumers looking to their personally curated collection of mobile applications to gain power and convenience, or to just navigate their busy lives. And who hasn’t experienced the benefits of requesting a ride with a single tap, or reserving and paying for a car by the minute? But what does this on-demand revolution have to do with auto dealerships? It turns out, a lot.

Dealers can deliver new benefits to convenience-driven customers who expect to use an app for every interaction. At the same time, dealers can future-proof their businesses by adding revenue streams and making more efficient use of service departments and available assets. The following are a few ideas that connect apps to new dealership opportunities:

Opportunity No. 1: On-Demand Service Vehicles

In much the same way that carsharing firm Zipcar operates, dealers can set up a small fleet of vehicles and make them available to their service customers. Customers will appreciate the streamlined experience and the ability to get going right away — without having to wait for keys to be exchanged or for a third-party rental representative to show up.

All that’s required is the installation of an inexpensive telematics box in each vehicle and creating a branded app on top of a mobility software platform. Service customers can download the app and reserve a vehicle along with their service appointment. The right carsharing platform takes care of customer onboarding by verifying their driver’s license, driving history and credit information. Service customers don’t even need to set foot inside the dealership.

2. On-Demand Test Drives

Today’s consumers, especially millennials, rely on the internet to compare products and prices. When it’s time to purchase a car, they rarely come into the dealership uninformed. Yet the last leg of the purchase decision, the test drive, can’t happen over the internet.

App-savvy dealers can make this crucial step an easy one — by offering a test-drive program that allows customers to reserve and test a vehicle without needing to interact with a human being. While this hands-off approach may seem counter to the traditional dealer sales process, it’s actually a perfect continuation of the modern customer journey. And by offering this convenient self-education alternative, you can set your dealership apart from others.

The right carsharing software can support such an on-demand program with multiple safeguards: ensuring that drivers are properly licensed, setting limits on the duration of a free test drive, and even switching to a pay-per-minute mode after the limit has been exceeded.

3. Car Rentals to Uber and Lyft Drivers

Twenty percent of would-be Uber and Lyft drivers don’t own vehicles that pass service guidelines. These drivers — as well as those who don’t want to use their own cars — are looking to rent vehicles for their ride-hailing shifts. Their business need is your business opportunity: Your idle inventory of pre-owned cars can now generate income as on-demand vehicles for ridesharing drivers.

You’ll use mobility software and hardware to set up the program, create a branded app, onboard drivers, and rent out vehicles for fixed shifts. Uber and Lyft drivers can then use the app to reserve a vehicle from your lot, unlock it, and drive off — without needing to interact with any of your employees.

These are just a few ideas for how today’s auto dealers can embrace the new on-demand economy. As the prospect of autonomous looms — and with it, the slowdown in personal car purchases — ridesharing and carsharing services will be the way of the future. Yes, that future is far off, but dealers can get started today by gaining experience with carsharing services and technologies. At the very least, you’ll be selling and servicing more cars on your lot — which is always a step in the right direction.

About the Author

Mark Thomas serves as the vice president of marketing for Ridecell, a global carsharing and ridesharing platform provider. Email him at mark.thomas@bobit.com.

Your Comment

Please note that comments may be moderated. 
Leave this field empty:
Your Name:  
Your Email:  

Blog

So Here's the Deal

Ronald J. Reahard
Help! My Dealership Is Packing Payments

By Ronald J. Reahard
Top trainer comes to the rescue of an F&I manager who fears an antiquated, discredited, and deceptive sales tactic has taken root at his store.

Sharing the Profit

By Ronald J. Reahard
After losing members of his sales team, a dealer asks the magazine’s resident F&I expert for his take on paying salespeople on F&I income.

Menus Don’t Work Miracles

By Ronald J. Reahard

Avoiding the AAA Objection

By Ronald J. Reahard

Done Deal

Gregory Arroyo
Red Flags Alert

By Gregory Arroyo
The editor believes recent regulatory activity should serve as a warning to dealers who haven’t dusted off their Red Flags compliance programs in the years since the rule took effect.

GAP Suffers Another Setback

By Gregory Arroyo
The editor reveals the truth behind an NPR report critical of the industry’s efforts to undo the Military Lending Act guidance that put the brakes on GAP sales.

Car Buyers Need F&I

By Gregory Arroyo

Protecting F&I’s Future

By Gregory Arroyo

Mad Marv

Marv Eleazer
Readers Are Leaders

By Marv Eleazer
Do you know the minimum amount of tread depth a tire must have for a tire-and-wheel claim to be approved? If you don’t, His Madness has a message for you.

Comply Like Nobody’s Watching

By Marv Eleazer
His Madness wants F&I pros to commit to ethical dealings with customers and finance sources because it’s the right thing to do, not just for the very real threat of reprisal.

'We Never Buy This Stuff'

By Marv Eleazer

Stop Painting Dealers With a Broad Brush

By Marv Eleazer

On the Point

Jim Ziegler
Bound to Fail

By Jim Ziegler
Da Man returns with a message to vehicle manufacturers jumping into the subscription waters: It ain’t gonna happen.

Sharpen Your Survival Skills

By Jim Ziegler
‘Da Man’ has a plan you can use to survive the collapse of the car business and remain profitable through the dealer apocalypse.

Sales Rock Stars Still Exist

By Jim Ziegler

The New Stooges

By Jim Ziegler