How dealers earn incremental holiday revenue by targeting rideshare drivers | Auto Finance News | Auto Finance News

How dealers earn incremental holiday revenue by targeting rideshare drivers

© Can Stock Photo / tomwang

Depending on the source, somewhere between two to four million drivers are actively driving in the “gig-economy” ridesharing industry in the U.S. – not including self-employed food and package delivery drivers. It’s challenging to obtain an exact count of “gig-drivers” because so many are part-time and jump in and out of the industry. Regardless, the total active gig-economy driver count is estimated to exceed 10 million today and projected to grow about 20% a year.

What do these drivers have in common? 

They are not actively pursued by dealers or manufacturers for their vehicle rental, sales, parts, and service business. Better yet, up to 40% or more of these drivers do not have a qualifying vehicle and need to rent or buy one to participate as a gig-driver.

The good news for dealers?

Dealers are in the best position to serve this industry that’s still in its infancy. Even better, dealers already own the resources to capitalize on these booming mobility opportunities. Who better to have as a customer than someone who needs frequent service and changes cars more often than the traditional customer?

As a former dealer, I know that significant resistance remains with target marketing to gig-economy drivers by dealers. In the early days of rideshare, many drivers were disenfranchised taxi or limo drivers and frankly were not the best custodians of vehicles. Most drivers in the past relied on large fleet owners to maintain cars and had no pride of ownership. Today’s drivers are much more the fabric of society (and some are your neighbors). Gig-drivers need to have a clean and reliable car because it’s “their” business, and they strive to earn high ratings from passengers to get additional benefits and more income.

It’s the Holidays!

These prospective clients offer a tremendous opportunity, especially during the holidays. More drivers are necessary because hailing a car within minutes is at the tip of your fingers with a smartphone, and the holidays only increase demand. From responsible holiday party-goers to shoppers wanting to avoid the hassles of parking in crowded malls, the convenience of ridesharing is appreciated by more riders every day. Another point, gig-economy drivers are making more money right now during the holiday season to invest in their vehicle or a newer vehicle.

So how does a dealer go after this opportunity? 

It’s fairly simple to get started. No additional capital investment is required. Here are some quick tips for a dealer to begin engaging gig-economy drivers:

  • Leverage all customer communications, including the dealer website. Dealers should let the market know that they offer special service programs for drivers (coupons, after-hours service, pick up & delivery, etc.).
  • Use the words this growing market recognizes. New and used vehicle marketing should specifically mention serving the rideshare and Transportation as a Service (TaaS) industry.
  • Partner with turn-key marketplace platforms like HyreCar to rent aged or excess inventory to rideshare and delivery drivers. HyreCar’s platform provides vehicle management, administration, vetted drivers, insurance, and rental payment collection for dealers. And it’s all done digitally. Almost all a dealer needs to do is hand over the keys to the customer.

And what is the long-term benefit for dealers? 

More than 30% of drivers who rent from a dealer will later buy a vehicle from that dealer. It’s a great way to start a relationship with a new type of customer. Another interesting benefit for dealers actively marketing to rideshare drivers is that these drivers become loyal repeat customers. Time is money, especially in the gig-economy, and these drivers need fast turn-around, consistency, and fair prices. Additionally, my experience has shown that when gig-drivers rent or buy a car, the drivers tend to be very flexible. Color, trim, and options are not the primary concern. Vehicle condition, four doors, and availability are key. It’s like owning a restaurant where the patron says, “I like everything!”

Today, rental car companies and third-party repair shops are aggressively seeking these gig-driver opportunities. I believe dealers can serve these customers best. If dealers want to make the holidays and 2020 merrier, I recommend creating a strategy to engage with these incremental opportunities. I strongly believe the future is very bright for dealers that do.

Happy New Year!

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