Fixed Ops Journal - August 2017 - 18

FIXED OPS JOURNAL

New world of car sharing
demands new approaches to service

MOBILITY
T

GUEST COLUMN

DAVID

CARLISLE

A DEALER'S SURVIVAL GUIDE

he concept of mobility used to be
relatively simple. You need to get
from point A to point B? Easy: Rent a
car, hail a cab or buy a car. Voila - you
are mobile.
Mobility is not so simple anymore.
Today, rather than whistle and scream
for a cab, we can use our Uber or Lyft
apps. Instead of waiting in line for our
rental, we can use our Zipcar app to
show us where the nearest vehicle is parked.
What about sharing our personal cars?
About half of the new-vehicle market - nonluxury, nonpickup, mainstream vehicles - is
susceptible to sharing. This makes sense because personal vehicles are used only about 5
percent of the time.
With 80 percent of the U.S. population living in
urban areas, it's not difficult to imagine a world
in which people share their vehicles as a way to
better use that other 95 percent of the time.
Sharing vehicles would also significantly
lower each partner's fixed cost of ownership.
This is a financially attractive idea, and not
just for millennials.
Instead of owning a personal car, imagine a
world in which Zipcar lives on steroids. Your

Auto retailers who do
nothing to prepare for a
future formed by the
evolution of mobility
will suffer.

shared personal car is one of thousands in a
fleet, steps from your home.
As the proportion of shared vehicle assets
increases, vehicle ownership will shift from
individuals to fleets. Individual owners are
relatively loyal to dealers during the first three
to five years of ownership, and could become
more so as ownership equates more with passion than simple economics.
Fleet owners, on the other hand, are not
dealer-loyal. They are interested in the highest
possible asset use at the lowest possible costs.
The booster rocket for all of this to happen
will be the inevitable introduction of fully autonomous vehicles. This will enable Uber and
Lyft to lower driver costs to zero, and make the
kind of profits that justify multibillion-dollar
market capitalizations.

Strategy #1: Pickup and drop-off
Your customers don't want
a free breakfast when they
bring their vehicles in for service. They want not to bring the vehicles in at all.
Younger and luxury-car owners are especially willing to pay for the dealership to pick up
and drop off their vehicles. Land Rover dealers
have done this for years at no charge. Lincoln
has launched its service valet program.

PAGE 18

AUGUST 2017

I have a hard time understanding why everybody isn't doing this, and charging for it.
Vehicle pickup and drop-off eliminates service lane congestion and waiting room irritation.
It fits with a mobility strategy because it
lends itself to a smartphone application.
It neutralizes bottlenecks in the parts room
and workshop by incorporating more time in

More fleet vehicle ownership means less
traditional vehicle service. Fleets will migrate
to lower-cost, higher-use alternatives. Our future highways will abound with shared vehicles of all shapes and sizes.
This is coming faster than we may think, and
we need to prepare. The good news is that
we've thought through many of the solutions;
they are relatively straightforward. It might
just require re-prioritizing initiatives.
We need to breathe new life into, and place
more emphasis on, a few good ideas that have
been pushed aside for too long. To continue to
put them off would be a mistake with catastrophic consequences.
These survival strategies will properly position automakers and retailers in two ways.
They will give current service customers more
of what they really want, so they defect less.
And they will better prepare retailers to be
more attractive to fleet customers for their vehicle service needs.
David Carlisle is chairman of Carlisle & Co.
Inc., a consulting and research firm in
Concord, Mass., that works with automakers
on vehicle service initiatives.
the service cycle. And it will enhance customer loyalty before the tidal wave of vehicle sharing hits the market.
In the not-too-distant future, I will tap an
icon on my smartphone, request a vehicle, see
where it is and track how long it takes to reach
me. That will be my future expectation of vehicle ownership and care.
Pickup and drop-off gets me there now. It
will slow the transition from individual vehicle owners to shared vehicle owners.

Table of Contents for the Digital Edition of Fixed Ops Journal - August 2017