Automotive News - September 21, 2020 - Best Practices Supplement - S8

8 | SEPTEMBER 21, 2020
R E E D M A N T O L L A U T O G R O U P, L A N G H O R N E , PA .

Group capitalizes on ride-hail trend
Efforts to rent and sell
vehicles to drivers help
boost sales, revenue
Published in Automotive News Jan. 6, 2020

eaders at Reedman Toll Auto Group took
a look at where the automotive market
was headed and anticipated a shift in
the way people would use and buy
vehicles. Namely, they expected the prevalence of ride-hailing services such as Uber
and Lyft to present a fundamental change -
and an opportunity, said Daryl Kessler, the
group's vice president.
The services are "very much here to stay and
a growing part of the industry, and there is for
that reason a market among those ... drivers for
cars," Kessler said. "Many of the people who are
interested in starting as ... drivers either can't
afford a new car, or even if they could, they
can't get financed for any number of reasons."
So Reedman Toll, with seven stores in the
Philadelphia area, decided it should get vehicles from its dealerships into the hands of
ride-hailing drivers.
"That developed into a bigger idea of partnering with companies that would allow us to
rent cars to those people," and to sell cars to
them, Kessler said.
In fall 2018, the dealership group set up a
separate company called Stork Driver PA,
which buys lightly used inventory from Reedman Toll and then rents or sells those cars to
ride-hailing drivers. Stork Driver PA also rents
space from Reedman Toll's Langhorne store,
where a lounge with couches, a TV, snacks
and other amenities was set up to provide
those drivers with a place to relax.
Around the same time, Reedman Toll partnered with DriveItAway, a mobile application
that connects ride-hailing drivers with vehicles, to generate leads. "We also think that as
this grows, and as we are developing relationships with drivers, that we're going to start to
see an increasing number of word-of-mouth
customers," Kessler said.
Reedman Toll also offered perks for ride-hailing drivers on service work, such as four free oil
changes, free brake pads for life and a 20 percent
discount on service and maintenance jobs. So,
in addition to more vehicle sales or rental revenue, Reedman Toll also is benefiting from more

David Muller

dmuller@crain.com

"I think the
overall benefit
to a dealership
is being in the
game."
Daryl Kessler, vice
president, Reedman
Toll Auto Group

Reedman Toll Auto Group in metro
Philadelphia set up Stork Driver PA, a
rental and lease-to-own company, to
put vehicles from its dealerships into
the hands of ride-hailing drivers.

business coming through the group's service
lanes, Kessler said.
At any given time, Stork Driver PA has about
40 drivers in rotation, and they're a mix of customers renting vehicles or making payments
to buy them. That's an increase from the service's previous roster of about 10 such drivers.
It was time to scale up, Kessler said.
"We committed to growing this at a pace
that was sustainable," he said. "And about two
and a half, three months ago, we really started
focusing on trying to move people from rentals to what I'll broadly call sales, and that's
where we are."
Looking ahead, Reedman Toll aims to increase both the rental and sales fleets at Stork
Driver PA. But any expansion will unfold carefully, Kessler said - he noted that some competitors have tried and failed at similar ventures.
That said, the program is making sense financially, both for the dealership group and
the drivers, he said.
"There are only a couple of numbers that

matter," Kessler said. "It's what you own the
car for, how you can write it down - whatever
that means to you, if you have a car floorplan,
how you're making payments on it, how
you're writing it down - and how much
you're charging to rent it out and what your
utilization is. It's just a graph with those
points, and can you make them hit?"
So far, Reedman Toll and Stork Driver PA
have made them hit, though Kessler didn't
provide specific numbers. "We are very happy
with our results to date," he said.
He credits that in part to a tempered learning curve. "We had the benefit of starting fairly
small and seeing what worked and didn't
work," Kessler said.
Reedman Toll sells about 10,000 new and
used vehicles a year at its seven stores, which
sell the Chevrolet, Chrysler, Dodge, Fiat, Honda, Jeep, Nissan, Ram and Subaru brands.
So far, the vehicles in operation at Stork
Driver PA may be a drop in the bucket of those
overall sales, but the dealership group counts
it as an important start.
"I'll be the first to admit, I don't know where
this is all headed, but I see where it's going,"
Kessler said. "And I think the overall benefit to
a dealership is being in the game. ... You are
renting cars, you're trying to sell cars, you're
servicing cars, you are in the [ride-hailing]
game." n

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