Q&A: Openbay CEO on State Farm Partnership
March 10, 2017—Earlier this week, Openbay, an online marketplace for auto repair, announced a partnership with State Farm. Open to State Farm customers and non-customers alike, Openbay will provide special offers and incentives for people to book vehicle service through its nationwide network of auto repair centers. It's the company's second major insurer partnership, following its collaboration with Allstate last year.
Openbay CEO Rob Infantino spoke with Ratchet+Wrench to discuss how the partnership was formed, the controversy surrounding Openbay's services, and how it could ultimately help auto repair shops.
How did this collaboration with State Farm come to be?
When you look at all the top insurance companies—State Farm, Geico, Progressive, Allstate—they're constantly working toward improving customer retention. They don't like their clients moving off of their platform to others.
So what you're seeing is they're offering a lot of value-added services. At some point in your lifetime, you're going to buy a car, you're going to insure it. Some of these insurance companies will even help you finance a vehicle. If you get into a car accident, they'll help you with getting it repaired and protecting you from legal issues. And then, when you decide to dispose of a vehicle, they'll help you sell it.
But what was missing in the middle for a long time was the ability to maintain that vehicle. There was a service gap. The theory is a well-maintained car is a safer car. So we help them bridge that service gap.
Are there other companies offering this service to insurance companies?
They're forming partnerships not just with Openbay, but also TrueCar and Edmunds. We just happen to fit the repair segment of the life cycle. We have relationships with many other insurance companies. They've gone through a significant due diligence process where they've done internal and external testing with consumers using Openbay, and we come out on top every time. We have great relationships and we believe we can help these insurance companies keep their customers on their platforms and not go elsewhere.
How do you respond to concerns about customers being steered towards specific shops? It’s a common complaint about insurance companies in the collision repair industry.
Honestly, they’re just two totally different situations. With auto repair, as consumers, we're not paying the insurance companies anything. They're not dictating price, what anything should cost, as opposed to the collision industry, where they can say, “You know what, this car is three years old, we want to go with an aftermarket fender as opposed to an OE fender.” I don't believe any of that methodology will apply to mechanical repair because they're not insuring the vehicle. It's just a simple service they're offering.
There are also concerns that the service will only promote the cheapest shops, and not necessarily the “best” shops.
That’s the reason we vet shops before they get on our platform. When I first started this company, I would ask consumers how they felt about auto repair. And the biggest concerns they had were being overcharged and getting taken advantage of by mechanics. And this especially came from women. They were vulnerable when they walked into the shop. And my job was to address that head on.
So when you think of an insurance company—especially State Farm—you think of trust. You trust them with life, home and car insurance. They're there to protect you. And I would say that brand resonates really well with car care. So, State Farm gets behind Openbay, and Openbay has vetted shops to get the best shops on their platforms so that you won't get taken advantage of and you won’t feel like you're getting overcharged. That's the whole nature of the marketplace, that you'll get five to six quotes, and the ones that are off the mark, you'll see them right away.
What are the real benefits for shop operators to get involved with Openbay?
It's a huge benefit. State Farm has 45 million policyholders on their platform. If they're marketing Openbay to their policyholders, and they're marketing Openbay to the general public, this is a tremendous opportunity for shops to get on the platform. Because when you think about it, you do the math, there's 250 million vehicles on the road, and you've got a company that represents 45 million, that's a significant percentage of the overall population of vehicles on the road. I think shops could benefit from the increase in traffic, and consumers will benefit from the marketplace, because they're going to get high quality service.