Shops, AAA Mid-Atlantic End Standoff

March 1, 2017

By forming an alliance, shop owners in the Mid-Atlantic AAR program were able to negotiate out of a contract.

What started as a standoff between a group of East Coast shop operators and AAA Mid-Atlantic recently has been resolved in amicable terms, according to several industry professionals involved in the situation.

The dispute stemmed from a stark philosophical difference in regard to business intelligence and data ownership. As Ratchet+Wrench first reported in April 2016 (“Regional AAA Network Changes Put Pressure on Shops,”, the AAA Mid-Atlantic group added a requirement to its AAA Approved Auto Repair (AAR) contracts that all AAR shops submit access to their respective shop databases and allow the AAA affiliate to gather customer information through its Repair Shop Portal. The change in requirements prompted a number of shop owners to rethink their AAA contracts, and pushed several to speak out publicly. 

In the end, the AAR shops were able to renegotiate the terms of their contracts, says Stephen Powell, owner of Thoroughbred Auto Care in Laurel, Md., which is part of the AAA Mid-Atlantic network. Under the newly formed contract, which went into effect at the beginning of 2017, Powell says that AAR shops in the region are now only required to share the member name and number, the vehicle problem, what was done to fix it, and the discount provided. 

Banding Together 

Powell’s business has been part of the AAA repair program since 1996. When AAA contacted him to let him know that they wanted direct access to his database, he was uncomfortable and reached out to other shop owners in his area to get their thoughts. Two of those shop owners were Greg Buckley, co-owner of Buckley’s Auto Care in Wilmington, Del., and Billy Hillmuth Jr., vice president of the four-location Hillmuth Certified Automotive in Maryland. Both Hillmuth and Buckley agreed that the amount of information that was to be required was invasive and so, the shop owners came together to air their grievances to their AAA Mid-Atlantic representatives. In 2016, the three shop owners and a number of other members of shop owners, all members of the Council of Automotive Repair in Washington, D.C, Maryland and Delaware (WMDA/CAR), met with AAA four times to negotiate the terms of the contract. 

The Negotiations 

The first meeting took place in May of 2016 in Washington, D.C., with representatives from the WMDA/CAR, AAA national and AAA Mid-Atlantic. 

Bob Kazmierczak, director of auto products and service development at the AAA Club Alliance, which oversees the Mid-Atlantic and Ohio AAA affiliates, was in attendance at each meeting, and says that he had not realized that the new requirement would bring up so many potential problems.  

Buckley, whose consumer video blog about the AAA data issue went viral in late 2015, told Ratchet+Wrench at the time that shops should not be “purveyors” of sensitive customer information that could be sold to third parties, or be used to sell his shop’s customers additional AAA products, such as insurance. There are also fears of how AAA-operated service centers could use the data for their own competitive benefit. And the data sharing potentially could shift more business control to AAA clubs, who could put pressure on shops to control items such as labor rates and markups on parts.

At the first meeting, a number of changes were discussed and added to the contract. A few weeks later, a follow-up meeting occurred where the new contract was shared with shop owners. The changes were not enough to resolve the issue, Kazmierczak says, so AAA made an appearance at the WMDA conference to discuss new terms and followed up in November with the Mid-Atlantic group and presented AAR members with a final contract. 

The Outcome

Kazmierczak says he’s thankful that the shop owners brought the issue up, as it allowed AAA to realize the true source of the shop operators’ collective discomfort with the new requirements. Kazmierczak maintains that AAA wanted to use the information to assist the shops in better running their businesses and to provide the best possible service to its members. And once learning of the concerns from the WMDA/CAR members, AAA decided the information was unnecessary and would instead provide member information to the shops rather than asking the shop owners to provide it. 

Buckley, Hillmuth and Powell all say that another positive to come out of the meetings is that AAA promised to form a committee made up of shop representatives from every state. The committee will be called the Industry Group and will meet three or four times per year to discuss issues that AAR shops may have. The group is expected to begin this month. 

Despite the concessions made by AAA Mid-Atlantic, many of the shops involved in were split on their respective decisions to renew—Buckley did, while Powell didn’t.  

Voice Your Concern 

This is an issue that was restricted to one part of the U.S. and does not apply to the entire industry, but it is an example of the power that shop owners can have, Buckley says. Buckley’s initial viral video started much of the fervor over the new requirements. 

Beyond gaining attention, Powell says it’s important not to fight the battle alone. Powell says he doesn’t view these shop owners as his competition. Instead, he looks at them as valuable resources. Powell explains that through organizations like WMDA/CAR, he was able to connect with shop owners that had similar concerns and form an alliance. Beyond automotive associations, Powell recommends general business groups for any shop owner that might have an issue.

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