In a BTW, TrueCar Tells of Scott Painter Leaving as CEO

Scott Painter leaves a mixed legacy when he steps down later this year as CEO of TrueCar.

On the one hand, the company he founded has altered auto retailing. TrueCar truly has been “disruptive” a perhaps-overused word for an innovative force that totally changes things.

But disruptive means other things, too. Like “unruly” or “disorderly.” True Car has overturned a lot of apple carts in the last few years. And a lot of them belong to dealers with lawyers.

The company currently faces two suits from dealer groups as well as a formal complaint from the California New Car Dealers Assn. AutoNation, the country’s largest dealership chain, recently said it’s severing its ties with TrueCar.

The wagons were circling.   

“After a decade of building TrueCar from an idea into a public company, I have come to the conclusion reached by many founders and entrepreneurs in my position: It is time for a change,” says Painter in a statement.

A board member offers the obligatory thanks for the contribution and leadership required to make a “difficult decision.” Painter remains as chairman of the board.

The shocker of an announcement comes as an almost BTW in a company statement. First it reports a second-quarter net loss of $14.7 million on revenues of $65.3 million. Then it tells of Painter’s planned departure. That announcement is under the heading “Management Transitions.”  That’s surely an understatement.  

TrueCar gives consumers comparative and local-marketplace pricing information. It gives client dealer leads that cost up to $399 if they are converted into sales.

Opponents of the business model – and there are plenty – say it essentially forces dealers to become 1-price retailers, whether they want to be or not. Others say it’s essentially a form of car brokering.

A few years ago, Painter sailed through one storm without sinking. Back then, the company was losing money and dealer clients amid allegation that TrueCar was creating a race to the bottom for dealers.

Painter’s reaction to that charge essentially was: “You’re right. We’re wrong. We’ll change.”  

Revisions to the tightened-up model included thwarting hard-playing consumers from misusing pricing information by pitting dealer against dealer. TrueCar regained many of its lost dealers, but the controversy centered on its sheer existence never fully ended.

Back then, I had lunch with Painter who wanted to talk about how things were now so different at TrueCar.

When I arrived, he was already at the restaurant table. Next to him was tall shot glass holding a clear liquid. I knew it was a rough year for him, but I didn’t realize it evidently was resulting in him doing shots at lunch.

But when I got coffee and asked for sugar, the waiter slid the shot glass my way. Turns out, it contained liquefied sugar. I told Painter of my mistaken deduction.

“You thought that’s how I roll?” he laughed.

Truth is, no one really knows how Painter rolls. They may scratch their heads when he predicts TrueCar will potentially be involved in up to 40% of vehicle sales. Or they may wonder what’s up when he says the industry could sell 20 million vehicles in 2017, if it would just embrace the TrueCar model.

Some people say he is good for the industry. Some people say he is bad for it. Either way, he sure has changed it.

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