Scott Painter Returns...

[BradyFerron]

Scott is back with a new entity, called Fair. He has raised $16 Million and is looking to create a fractional ownership model for the auto industry - Mobility as a Service. Dealers need to keep an eye on this...

http://www.businessinsider.com.au/tesla-exec-auto-website-entrepreneur-teaming-up-2016-11

 

[Jeff Kershner]

I was reading about this over on Cliff Banks website. He (Scott Painter) knows how to "paint" a pretty impressive picture of himself.

Consumers already make purchaing or leasing so difficult. The term LEASE still carries a stimgma even though it makes the most sense for most. I don't see how adding more layers and/or options to the purchase will evolve the industry.

 

[Steve Stauning]

I don't see how adding more layers and/or options to the purchase will evolve the industry.

Agreed. I also believe that investors should be wary. If his model is as described, it's a short-term bridge between how people "own cars" today to how they will "use transportation" in the future. (And, it won't be easy if the whole industry is fighting against him...)

 

[Cullen C]

Not totally sure his "investors" are anyone other than Scott himself at this point but I do agree that this is a model to pay attention to.

Two quicks points in response to previous posts.

1) This model may not be as confusing as a typical lease or purchase is when you consider the growing subscription based economy we are a part of. If constructed and communicated properly it could be exactly what customers have been conditioned for over the last 3-5 years:
http://finance.yahoo.com/news/subscription-economy-growing-nine-times-080000705.html

2) The industry(at least at the manufacturer level) is actually in strong support of such a model, virtually ever OEM has a version of a fractional ownership model in play currently. Here are a few:
http://www.autoblog.com/2016/10/27/audi-joins-the-car-sharing-party-with-shared-fleet/

http://www.theverge.com/2016/11/15/13626134/bmw-reachnow-carsharing-launch-brooklyn

https://consumerist.com/2016/11/01/toyota-testing-keyless-car-sharing-program-with-getaround/

Not to mention the Maven partnership with Lyft that was actually extended to include Uber drivers.

Obviously there is a long way to go but technology is changing behaviors more quickly than I think you are choosing to acknowledge.

 

[BradyFerron]

Mobility as a Service is already here and will continue to permeate the space. The question is, how do dealers put these deals together? We've heard it before, but Scott says that this model will be beneficial to dealers - time will tell as the team builds out the solution. Candidly, I think he runs into a similar issue of picking "winners and losers" ala early days of TrueCar. Details are sketchy on how Fair intends to work with dealers - so let's wait and see.

Not sure I think this represents "another layer" rather than a whole new way of thinking of vehicle access. There are a ton of Fin Tech companies that are trying to innovate in the lending space. (Lending Tree, AutoPay, and the traditional players)

The question that the retail network needs to ask is - how can this help my business?

Brady

 

[Cullen C]

I think if this model successfully represents a new way to access vehicles it does evolve into an entirely new segment.

There are currently over 175,000 drivers for Uber alone and the new driver pool roughly doubles every 6 months. When you consider Lyft and the other numerous new entrants into the ride sharing market there is already an underserved built in customer base. Dealers are already closing deals with a small portion of this segment but it hasn't been addressed at scale yet.

Not sure what the plans are at Fair but my belief is that a subscription based fractional ownership model can work for dealers. It's a solution that cuts across disparate demographics.