Q&A: How Blockchain Technology Could Affect Your Shop
As consumers have more options to view and shop for potential products online, price comparison services are increasing in popularity. Since anyone shopping around for a hotel or vehicle is able to use price comparison tools, why shouldn’t they be able to do the same for auto repairs, Vladimir Lupenko asks?
The company Lupenko co-founded, CarFix, issued the Vehicle Lifecycle Blockchain (VLB) “token” (a digital form of currency) to do just that, and announced its initial coin offering for the token on Nov. 27, 2017. These tokens would be required for the automotive industry to record transactions made in the VLB.
Blockchain has a variety of uses. One feature of the service is that it can store an entire history of a vehicle for the duration of its lifetime. Lupenko says blockchains can also create transparency in collision and automotive repair shops, as users will be able to compare prices on transactions and services, from oil changes to major auto repairs.
With other companies, such as Openbay and RepairPal, which offer comparable scenarios, technology such as CarFix’s brings up one major concern for auto repair shop owners: Are services like this promoting the best shops...or the cheapest shops?
Lupenko says the blockchain technology will provide opportunities for streamlining the approach to relationships in the auto repair industry, and will have a major impact on the $1.8 trillion vehicle lifecycle industry. More than 300,000 customers and 500 auto repair shops currently use the system worldwide. The United States is currently the largest market for the service, but presence in China is growing dramatically as well.
Lupenko spoke with Ratchet+Wrench about VLB and how he hopes to revolutionize the industry with its technology.
Can you explain the origin of the VLB and what CarFix aims to do with it?
We started the company almost two years ago with the intent to change things in the auto repair industry. We want to make repairs convenient and transparent, as simple as you book it with Hotels.com or TripAdvisor.
The auto repair industry is huge, and people always get cheated. They don’t know how much they’re going to pay for a repair. The way they find repairs is kind of outdated—either they talk with friends or search on Google or Yahoo to find answers. They don’t know how to compare different offers from different repair shops.
We have developed an advanced software that enables us to find, in real time, exactly how much it will cost for a particular job. As soon as we start growing and get more market participants into our ecosystems, we’ll start talking with insurance companies and working with them, finding other problems that the industry has.
We make the available software with integrated VLB technology, with a web and mobile application, free of charge. Any repair shop will be able to download it and start using it in their business.
The app features “fixed prices” for basic repairs and oil changes. How do you come up with these fixed prices?
We partner with the repair shops, and when we are on board with our partner, we agree with them on the fixed labor costs and labor hours. We use reputable and undisputable technical data to set the market and price rate.
If you’re looking to change motor oil in your car at 5 p.m. on a certain day, our software will show you professionals in this particular industry. Based on our contractual agreement, the repair shop will have to provide the services at the price we’ve calculated. We control and agree with a repair shop on how much the shop can earn from the service.
Many repair shops have a fear that services like this undermine the auto professionals’ expertise. Shops that charge more might have better equipment, better training. Have you heard that concern?
Yes, that concern exists, and some repair shops initially treated us as a threat. When we come to a repair shop, we show a simple calculation of how much they will earn with us, and that they will be able to increase their capacity rate because we provide stable traffic. The repair shop will be able to save on marketing and some logistic costs.
How quickly is the technology catching on?
We have already spent 18 months developing the technology, and we are still ongoing in the process. We have not yet processed all car brands and all repair jobs. We’ve reached 50 percent of our destination, and we’ll need maybe another year to make sure that we cover all jobs and all brands, and that it is working in a perfect way.
How does an auto repair shop get signed up for the VLB’s services?
If a repair shop would like to get signed to the VLB platform, our team will review the application, score it and make a decision on if we are ready to work with that particular shop. Location, specialization and reputation are also taken into consideration.