Capture the Rideshare Market
SHOP STATS: Victory Auto Service & Glass Location: 5 in Minn., 1 in Wisc., 1 in Fla. Operator: Jeff Matt Average Monthly Car Count: 350-450 Average Staff Size: 5 Average Shop Size: 5,500 sq. ft. Annual Revenue (combined): $9 million
The rideshare craze has captured the hearts and minds of drivers and commuters alike. According to a Lang Aftermarket iReport, one-third of 19-year-old Americans are currently without a driver’s license—more than double the share without a license in 1985. One of the causes of this? Rideshare. Teens would rather hitch a ride than own a vehicle of their own. Because of this, vehicle sharing could change how Americans use and own vehicles, which could have massive implications for the aftermarket, according to the report.
“Their vehicle is their office,” says Jordan Cozatt, business development manager for Victory Auto Service in the Minneapolis metro area of Minnesota. “[Drivers] log 40,000 to 50,000 miles per year. They aren’t leaving the Metro, they are just doing 30-plus trips a day. Because of this, they need to take care of their vehicle properly.”
And this is why rideshare drivers are a valuable customer base for repair shops to target.
Cozatt says rideshare has helped not only bring in business (there are about 20,000 drivers alone in the Minneapolis-St. Paul metro with 60 percent driving for both Uber and Lyft), but retain more customers. From the start, Cozatt saw an opportunity into an untapped market. Back in 2016, he reached out to Uber and Lyft to form a partnership. Within the first three months of the partnership, he saw an extra 40 customers. In one month alone, between all seven Victory Auto Service locations, the business added 550 new customers strictly through rideshare.
Since its initial debut, rideshare has surged in popularity—for customers and drivers alike. And, while it did, other repair shops started to see the appeal of the market. Tveten’s Auto Clinic in Lakewood, Wash., was one of these shops. It added a rideshare inspection service in March 2018. The shop currently has around 80 retained customers from Uber and Lyft alone. Nichole Lott, a service writer in charge of the Uber/Lyft program at Tveten’s Auto Clinic, says the shop gets five more cars per week on average. Even the shop’s ARO has benefitted; it went from $385 last year to $550.
“We’re right in the middle of a busy city in a shopping district where people use a lot of Uber and Lyft in the area,” says Lott. “It’s been a massive growth opportunity, especially in terms of car count. We had a lot more customers coming through the door and it’s made the staff become better leaders overall.”
Here’s how to go about capturing this desirable demographic.
1. Learn your area’s regulations—and opportunities.
While popular, rideshare isn’t available just anywhere; some cities and smaller towns have Uber, but not Lyft, vice versa, both, or no rideshare services at all. But if it is offered, regulations can vary from city to city.
Back in Minnesota in 2016, Minneapolis and St. Paul tried to level the playing field between rideshare and taxicabs. Taxicabs were required to go in for an annual inspection of its vehicles, while companies like Uber and Lyft did not have this requirement. The argument was if taxicabs had to get inspections, so should the rideshare drivers.
And, once city officials passed the requirement for rideshare, Cozatt saw an opportunity. All of those drivers would need regular inspections, and he wanted Victory to be the shops to handle those. Forming relationships with Uber and Lyft was easy, especially with one of Lyft’s hub locations directly across the street. So, once you figure out your area’s regulations, capitalize on them.
2. Form a partnership with rideshare companies.
One opportunity to bring customers in is by partnering with the local rideshare hubs to refer customers straight to your door. Since working with Lyft over the past couple of years, Victory Auto has reached countless rideshare drivers for their vehicle maintenance needs. From the partnership, Victory started hosting information sessions to educate interested drivers on the rideshare program. While drivers were being informed on the program, they would service their car in the shop to pass the inspection requirements. Soon after this took off, Lyft started renting out part of the Maplewood location to do all of Lyft’s onboarding for new and interested drivers. And, since then, Victory hasn’t had an issue with bringing in rideshare customers. With drivers coming into Victory for their onboarding procedures, it was a one-stop-shop to get their vehicle inspection done at the repair shop right after.
3. Make it appealing.
To bring in drivers, you want to make the experience as hassle-free as possible from the get-go. And for shops offering the rideshare inspection service, it starts with offering an attractive price.
Before someone can even start driving for Uber or Lyft—and every year after that—the rideshare companies require an inspection on the driver’s vehicle. For Victory, they offer rideshare drivers the initial inspection for $30, while Tveten’s offers one free of charge.
“The inspection cost is minimal, but building a relationship is a lot,” Cozatt says.
It also comes down to simply being in a convenient area. With Tveten’s Auto Clinic located in the middle of a high-traffic shopping center—a rideshare hotspot—drivers frequently come in to get the required maintenance for their vehicles. From this, the shop saw the demand and started offering their own inspection and maintenance services specific to rideshare.
“A lot of customers come in from Uber or Lyft with a checklist of things they needed to get fixed to get approved to be a driver,” Lott says. “We tried to make it more convenient for them.”
4. Offer benefits.
If every shop starts offering rideshare inspections, how can your shop stand out from the crowd? Give drivers an incentive to use your shop over others.
For example, Lott is looking to partner with Uber to service repairs in the near future. With the nearest testing hub five miles away in Tacoma, Wash., she wants Uber to distribute coupon cards to drivers—an easy referral to retain more business. And, with the coupon cards offered, it’s an incentive to bring those drivers in.
Through Tveten’s independent rideshare program, drivers receive a complimentary 30-point inspection and 10 percent off of their service, an incentive for rideshare drivers only. And when it comes to scheduling, the shop usually only leaves two walk-in spots open, but rideshare drivers are an exception to the rule. Lott makes sure to fit in rideshare drivers whenever they walk through the door so they can get back to work as quickly as possible.
“We decided to give them 10 percent off to make it more convenient for them and also try to make it attractive so they’d tell other people about it,” Lott says.
5. Figure out a marketing campaign.
Whether it’s through a Facebook post, mailers, or simply word-of-mouth, find a way to connect with rideshare drivers.
Recently, Victory had a chance to become even more widely available. In August, it joined a Lyft partnership with Openbay, an online marketplace for auto repair shops. When a rideshare driver needs maintenance, they go on Openbay to request a service and a list of shops that provide Uber/Lyft inspections will pop up with 10 percent off repairs for Lyft drivers that use the listed shops. All they have to do is choose, book the service, and pay. Now, when a rideshare driver is looking for a shop, Victory Auto will come up in their search results.
“It’s another platform to get the word out to potential customers,” Cozatt says. “It puts you on a network.”
There are no fees associated to be a part of the partnership. When a driver books through Openbay, a customer pays Openbay, not the auto repair shop. From this, Openbay takes off 10 percent from the total as a referral fee before paying the auto repair shop.