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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.

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