TO THE EDITOR:
There is no question that auto dealers are in the best position to serve the on-demand and shared-vehicle sectors, and do so profitably ("How ride-hailing could offset a decline in new-vehicle sales," Aug. 12). It is ironic that many industry pundits forecast the demise of the franchised and independent dealer system because of the new shared economy.
The fact is, dealers are the lowest cost producer to serve these transportation models. Dealers already have the infrastructure to serve this new world, with little to no additional capital investment. Furthermore, dealers can profit from the on-demand ecosystem with incremental finance, sales, parts, service and rental revenue. These new income streams will insulate dealers from the trending shifts in vehicle consumption and, frankly, reinforce the relevance of dealers.
As progressive dealers become aware of their competitive advantage, third-party companies trying to serve these sectors will need to be concerned. Manufacturers and other entities that have tried to circumvent the dealer network with pilots and special ventures are scaling back or shutting down those operations. Bottom line: The automakers and finance captives that take advantage of their dealers to serve these new sectors will win big. Very big.
BRIAN ALLAN, Senior vice president, HyreCar Inc., HyreCar connects vehicle owners and dealers to drivers who need to rent or buy a vehicle for ride-hailing ventures.