An estimated 2 million ride-hailing drivers are in business across the major service providers — Uber and Lyft — and beyond in the U.S. As that number grows, full- and part-time drivers are emerging as an interesting market for the automotive ecosystem.
It is a segment with a unique buying profile, given that dedicated ride-hailing drivers rightly consider their vehicles critical tools of their trade. This view contrasts with that of conventional consumers, who mainly see their vehicles as personal means of transportation.
Ride-hailing drivers can put substantially more miles on their vehicles, and they tend to take a professional interest in ensuring that the vehicles are in proper working order. After all, their cars are their shops; they need to look good and work well.
This distinction has a dramatic effect on all aspects of the vehicle ownership experience. Conventional consumers engage transactionally with automakers, dealerships, lenders, insurance companies, mechanics, car wash services — even gas stations. Ride-hailing drivers must develop ongoing professional relationships with the extended community that plays a positive role in their business.
For dealerships, the high-touch needs of ride-hailing drivers represent a significant opportunity to offset the slow but steady decline in the number of households projected to buy vehicles in the months and years to come.
To get into new vehicles, many of these drivers have taken advantage of a variety of lease and special rental programs developed by — or for — the major ride-hailing service providers. Many of these new-vehicle programs have been bundled with service agreements that are far more comprehensive than those associated with conventional lease arrangements.
The bigger opportunity, however, appears to be in used vehicles. It looks like drivers may be tailor-made for dealerships that offer certified pre-owned programs.
Given the requirements of the ride-hailing providers, vehicles in service need to be relatively new and in good operating condition.
CPO programs may be exactly what a significant portion of the market needs to get into the business in a cost-effective manner, while having access to the service and support that will be needed as drivers rack up the miles.
In any event, dealerships are in a position to establish the kind of consultative relationships with ride-hailing drivers that are often offered to conventional consumers.
If the relationship works — for either the new lease or CPO deals — the opportunity to harvest the benefits of customer loyalty from ride-hailing drivers can be truly impressive.
At J.D. Power, we believe dealerships can begin now to position themselves for success with the ride-hailing driving community by:
- Developing a ride-hailing retail strategy. A plan should be put in place for handling the detailed and sophisticated questions that professional ride-hailing drivers are likely to bring to the table. It would make sense to have some sales staff members trained to engage effectively when this segment of the market contacts the dealership.
- Offering special services. Dealerships and manufacturers should consider creating programs and pricing structures for ride-hailing professionals — that are different from those offered to conventional consumers — across the spectrum of sales, service and repair operations.
- Staying flexible. This is an area of the marketplace that is unfolding rapidly. As plans are developed, agility will be critical because the comprehensive long-term needs of ride-hailing drivers are not fully understood. Indeed, there may be a range of requirements between casual drivers and those who are working full time. Investments need to be made carefully.
That said, ride-hailing drivers can be a lucrative and dynamic market in sales and service for dealerships. Retailers who establish and develop professional relationships with this segment stand to be best positioned to get the most from ride-hailing drivers in their communities.