Shifting Gears: Aftersales and the gig economy
Exploring the world of automotive aftercare has given us a glimpse into the changing ways in which consumers use their cars, and the impacts this will have on the aftermarket industry.
A decade ago the typical consumer vehicle had limited, predictable duties: the commute to work Monday to Friday, the school run, a trip to the shops on the weekend… Nowadays, with the advent of gig economy platforms like Uber and Amazon Flex, a consumer car can be expected to be on the road for at least 60 hours a week; delivering groups of students to a nightclub one night, delivering a new blender to your neighbour the next. What’s more, sharing economy platforms such as Drivy and Turo allow car owners to generate income from their idle vehicles by offering them for short term hire.
Clearly, the way we use our cars is changing.
What implications will this have for how we maintain and look after them? How will this affect the landscape of the industry?
As we turn our reliable runabouts into ad hoc taxis, we demand more and more of their consumable parts - tyres and brake pads to name a couple. This wear and tear also requires more frequent maintenance, some of which can be performed by enthusiastic owners themselves. But for more involved maintenance and breakdown repair, only a professional garage will do. This has opened up an opportunity for companies to offer maintenance packages specifically for ridesharing vehicles. These deals take into account the high vehicle usage associated with ridesharing, and assure drivers that a surprise fault won’t drive them out of business.
The issue of car maintenance, as well as a desire for more flexibility, is encouraging a growing number of gig workers to move away from owning the vehicle they use for work. Incumbent car rental companies and start-ups such as Drover are racing to offer vehicles to gig workers on short-term, flexible leases. This opens up the world of gig working to those without a car, or who simply don’t want to use their personal car for work. This is especially relevant to younger generations who increasingly don’t own cars, opting instead for an asset-light, on-demand lifestyle.
Our focus groups revealed another novel use of personal cars when a participant told us about Drivy, an app-based car-sharing platform. Drivy allows consumers to lend their cars to other users of the platform at daily rates that undercut traditional car rental companies - so far, so Airbnb. However, Drivy goes one step further by providing an in-car device which allows an owner’s vehicle to be unlocked through the app, making self-service rental possible. The convenience of this feature, which eliminates the necessity of a face-to-face key hand over, had convinced our entrepreneurial participant that he could turn a profit by purchasing and renting multiple vehicles via the platform. It was too early to say whether his venture was paying off, but it was nonetheless a fascinating anecdote for the changing roles of consumer vehicles. More generally Drivy provides another example of the increasing utilisation of cars. No longer are our cars consigned to sit idly on our streets and driveways for days or weeks on end – they can be out there earning a tidy sum!
Looking more broadly at the gig economy, work platforms such as Uber are highly exposed to the ramifications of regulation determining the status of gig workers. Currently deemed to be self-employed, gig workers are not entitled to the same employment rights as workers under full employment. This means that under current legislation Uber and others bear no overt responsibility in ensuring the vehicles their drivers use are roadworthy, within MOT and fully insured.
However, debate rages as to the appropriateness of considering gig workers to be self-employed. Some argue that platform working is sufficiently different from traditional self-employment that the employment status of gig economy workers should reflect this by providing key employment rights. If regulation changes in this way, the likes of Uber and Amazon Flex may suddenly be responsible for maintaining their gig workers’ vehicles. This is because current law states that when an employee uses their own car for business travel, their employer has duty of care responsibilities for the vehicle. In effect, Uber, with its 50,000 drivers, would become one of the UK’s largest commercial fleet maintenance consumers overnight! For now, however, it remains to be seen how or if regulation surrounding the gig economy will change – watch this space!
Reflecting on these shifts in the aftermarket has given us an insight into new problems consumers in the market are likely to face, and helped us cultivate our ideas and solutions for how to solve them.