Some Auto Dealers Fret About New Age of Mobility, Others Join It

A sideline of Joe George’s job as president of Cox Automotive’s Mobility Solutions unit is to reassure some skittish people that vehicle subscription programs and other new-age mobility services won’t doom the auto industry as we know it.

“Mobility is an explosive word” in today’s changing transportation world, says George. It’s not the only hot-button term. “‘Subscription’ has turned into a highly charged word, too,” he says.

Many frets about where this is all headed come from auto industry people. They fear ride-sharing, ride-hailing, subscription services and the like could end up gutting vehicle sales.

Although some dealers worry about that, others have signed up for subscription services such as Cox Automotive’s Clutch. It is a platform that uses dealer inventories (including used and former demo units). Participating consumers can swap in and out of different types of vehicles for short durations. (Joe George, left)

“Clutch is the child of leasing and rental,” George says. “It offers a nontraditional method of ownership.”

Keep mobility matters in perspective, he urges the worriers.

For example, ride-sharing vehicles account for only 2% of the U.S. auto market but “it gets a lot of attention,” George says. “(Mobility initiatives) will not decimate the traditional dealership network. And this isn’t forcing anything on customers.”

His boss, Sandy Schwartz, agrees.

“It’s not one extreme or the other,” says Schwartz, the head of Cox Automotive. “There is a big difference between someone who takes Uber because they’ve had too much to drink and doesn’t want to drive home and someone who says, ‘I’m never going to own a car again.’”

Cox is involved in assorted mobility projects both to keep ahead of the curve and to learn, Schwartz says. He describes the expanding new-mobility age as evolutionary rather than revolutionary.  

“Anyone who thinks one thing tomorrow is going to change the industry doesn’t know the industry,” Schwartz says. “It’s so many pieces we’re working on.”

Dealers foresee a decline in personal-vehicle ownership but only 10% see mobility as a threat to their current business, according to the 2018 Cox Automotive Evolution of Mobility Study: A Dealer’s Perspective.  

The running of most mobility services relies on fleet operators. They are not alien beings, George says, seeking once again to reassure. “Fleet operators aren’t these strange creatures who dropped from the clouds They typically are OEMs, rental companies and others,” including dealers as they dip their toes in that enterprise.

Cox is becoming more involved in fleet management in part through its Manheim auto-auction chain.

“Manheim is good at storing and reconditioning vehicles,” says George, who years ago helped spearhead Manheim’s original online auction initiative. “As we move to a larger fleet world, we see ourselves as fleet caretakers.”

A challenge of running a car-sharing service – in which subscribers hop in a vehicle at one location and drive it to another where the process is repeated by someone else – is keeping those on-the-go vehicles clean for the next users.  

A Cox company, RideKleen, addresses that. Its trucks carry cleaning equipment. Workers can steam-wash a vehicle inside and out in less than seven minutes, using less than a gallon of water, George says. RideKleen’s mobile crews clean about 1,500 vehicles a week.

George sees someone such as his wife as a perfect candidate for a vehicle subscription service that allows customers to swap in and out of cars depending on their needs. For example, someone might want a pickup truck for practical purposes one day or a sporty car for a fun outing on another day.

“My wife has a 7-seat SUV that primarily is for transporting relatives around at Christmastime,” he says. “Think about that. If she used a subscription service, she’d have a big SUV only around the holidays, and another vehicle at other times.

“It’s a matter of specific vehicles for specific-use cases. How can we match consumers with use cases?”

The impending age of self-driving vehicles potentially could change the game for the auto industry.