NADA Special: Facilitating an On-Demand Delivery

Greg Hi, I'm Greg Uland with Reynolds and Reynolds and this is Connected. Right now I get to talk with Anthony Monteiro, the president of automotive retail at DRAIVER. We've been working with DRAIVER quite a bit over the last year or two and I'm excited to talk with Anthony to catch up on everything that's going on. So thanks for taking time, Anthony.

Anthony You're welcome. Thanks for having me. Excited to be here and have a little conversation.

Greg Absolutely. So, DRAIVER. If you don't mind, give a high level overview, what the company is, what they do. It's a pretty prominent company in the automotive space, but just level set.

Anthony So we found the major need for vehicle logistics: picking up, dropping off vehicles, home delivery service, valet products, and also lots a lot moves moving vehicles in between your own dealership is very inefficient in our industry. There's the Toyota manager that's moving a car to Ford and a Ford guy that's moving into Toyota. And they never talk to each other and they create a big, massive amount of inefficiencies. So we've solved that problem, we think, for the industry.

Greg Good. So there's a bunch of different pieces to that puzzle. So I'm curious from your perspective, you've been doing this for a while. So thinking about deliveries when you're selling a car, I would say it's not prominent still, but we're starting to see a trend moving in that direction. So I'm curious from your perspective, what you're seeing and what dealers are doing and how they're handling it.

Anthony Yeah, so there's a brand name out there, Carvana, that kind of made that home delivery vehicle in the driveway a common name and a common thing that customers have accepted. Auto retailers were slower getting into the game only because it's very fragmented. If you look at a Carvana model, they're very centralized and it's real easy from a hub and spoke perspective to build your infrastructure around that. Most auto retailers haven't. They've lived on, I come to the dealership, I meet a salesperson, and we make a deal. So as transition happens in the industry, a lot of the consolidators are now saying, well, do we need a Carvana? Why can't we be that Carvana? But they still don't have the logistics nor the infrastructure. So that's where we can come in and help them. We can create marketplaces of drivers so they don't have to go out and hire a bunch of drivers to do this. And it's an on-demand. So give us a couple hours or a day, and we'll facilitate that for them.

Greg Yeah. So that's definitely one hurdle, right? Is having that infrastructure and having those logistics down. What are some other hurdles preventing dealers from doing remote delivery? So you think about a customer, obviously they're going to start online, they're going to do their research online. Some will go through all the way to maybe submitting a credit app. You can do some payments. You'll have some that'll go all the way and want to sign contracts, but they might come and test drive the vehicle. But then either they're not ready to sign paperwork, they want to review it, sign it at home. Maybe they've got a co-buyer, they've got a whatever. There's a lot of variables in that. But to get the car to the consumer then, if they wanted to have it delivered to their house, if it was easy, we'd see a lot more of it, I think. So what are some of the other hurdles that are out there?

Anthony Well, you have this challenge of quality, right? So when you're doing a delivery of a new vehicle, you've got CSI, you've got all these other components that come into play. And when you start subletting, let's call it a home delivery, you might lose some of that personal connection or branding that happens while they're at the dealership. You have trained salespeople that can walk around and set the radio and adjust the seats. When you start getting into this remote product, it's a little bit different. You might lose some of the quality. What we've done at DRAIVER is because we're a skill based platform, we can give somebody a classification of white glove delivery, just like we deliver a lot of trucks that require a CDL license and that's a checkbox, right? Do you have a CDL? Are you a white glove driver? When that order comes in, we know those specific drivers that meet the criteria, but still we see dealers that are very progressive. What will happen is our driver will drop it off, maybe do some paperwork, do some basic stuff, but then the salesperson gets on FaceTime, meets with the customer, and they walk around the car and say, hey, this is how you set your radio station. This is where you may press this button or that button. And that personalization is still there, but they're doing it the same way that we do Zoom meetings all the time, right? It's still kind of face-to-face, but it's digital.

Greg So how do you balance that then? As a dealer, where you do want some control over that delivery? So you have the face to face interaction. That's the good example, FaceTime. But making sure that you can control that last interaction because obviously, you sold the car, right? The deal's done, you're delivering the car. The delivery experience is going to probably be the last one that consumer has with you until hopefully their first service appointment. So how do you ensure that last connection point, that delivery is a really positive memory for that consumer so that they do come back to you?

Anthony So you want to make sure, one, that vehicle, if you're going to promise a delivery, that it shows up at the time that you say it's going to be there, just like when you order your pizza today. When it starts to get late, you're like, where's my pizza? It's the same thing with a car. So provide that transparency of pick up and drop off, when they're going to be there, who the driver is. But then also that dealership still needs to reach back out to that customer, ask them how their experience went and engage with that customer of that experience and walk them through any questions they might have. So it still goes back to that dealer doing what they always do. It's just using technology to do it a little bit different than us standing here face-to-face.

Greg So one of the other things, thinking in a similar vein, whenever you start implementing new processes and you start implementing new technology, it seems like the intent is always for it to be more efficient, right? But almost inevitably it ends up being less efficient because you're trying to learn it, you're trying to figure it out, you're trying to change things. How do you ensure that you can be efficient when delivering vehicles? Because you think about it, you got a salesperson and if they're sitting around waiting for a half hour or an hour because they're waiting on a call from the customer, it just depends on when the car gets there, when it gets off the truck. How do you ensure efficiency so that you don't just have a bunch of people sitting around talking to thumbs waiting on delivery?

Anthony Well, like any logistics, you have a time that something's due in a time that somebody needs to complete a task. All of that is visible through the platform. The salesperson can see that driver heading to the customer's house and the customer can see the driver coming to them. So they all have this synchronization of the timing of that event. And another thing, it's really important because sometimes there's no vehicle to get backwards. So we use Uber to meet that driver once they are done, their process to come all the way back. So timing is really critical. And when you think about vehicle logistics, it really has to be planned and everybody needs to understand what the plan is so that they can execute it efficiently, just like in service. If I didn't have electronic repair order dispatching, we'd be back to, hey, who do I give the air conditioning job to? And that technician might not even know it's coming.

Greg Yeah, that's a good transition. Because the other thing I wanted to talk to you about was pick up and drop off in service. So it's a completely different animal. We're talking about vehicle deliveries and then shift gears to the convenience there is so high for a consumer to drive to the dealership, to drop the car off, to either get a shuttle, get an Uber, get a whatever, to get to work. To have somebody trail them, to get to work. They've got to time it out. They show up late to work. They had to drop their kids off. There's just so many logistical things that go into dropping a car for an oil change. So how can you make it easier? And what do you see maybe dealers doing that are successful with pick up and drop offs so it's efficient for them and things like that?

Anthony Yeah, for years and years, high-end dealerships, high line cars, they've offered that service mostly to their most loyal customers. They have a process so it's not foreign or new to them when you get to your domestics and volume products, well they don't offer that. So by using a platform like DRAIVER, integrated into a Reynolds platform, I see all my service appointments and I'm able to select the ones that I want to offer a service valet pick up and drop off. And I can manage it. I can do all of them or I can do a percentage of them. How much bandwidth do I think my business can handle? And then there's also the opportunity to charge the customer as consumers. Today, we're conditioned a little bit now to pay for a service for somebody to bring something to your house. So like you said, I look at my watch and I go, geez, it's going to take me an hour to get there, an hour to get back. I'm going to have to wait for $100. They're going to come and pick it up and drop it off and you click that button and you make it convenient. Now, there's still the coordination at the dealership level that has to be trained and implemented because what you don't want to have happen is these drivers show up and someone saying what are you here for? And then that kind of breaks down the whole process.

Greg Yeah, I was talking to somebody earlier today actually. He was telling me at their dealership about 7:30 in the morning, there's a slew of Uber drivers that sit in the McDonald's parking lot and wait for the calls to come in so they get to swing by and pick everybody up at the store. So they become like a hub almost for Uber in the morning. And their little town.

Anthony Yeah, it happens the same with our DRAIVER drivers. They know that fill in the blank dealership is going to have eight or nine or ten pick up and drop offs today. So what they'll do is they'll just because it's like Uber, it's geolocation and they know the closest driver that can fit that skill set. So they'll just park out in front of the dealership or in a dealership lot. And those orders come in, they accept it. And there you go, you're off and running. Then they start picking up and dropping off vehicles all day for them, and they kind of become an extension of the dealership. It's not just normally a random driver. It's a driver that's been working for them over a period of time now. And sometimes it's even their own former porters that they've moved on to the driver platform. So now that they don't have to incur the overhead of payroll taxes and benefits.

Greg So tell me a little bit and just paint the picture of what that interaction looks like. So if I'm a consumer as an example, and I walk into the store and I dropped my car off. Let's go this path first. So I drop my car off for service. You do the write-up and and they say, do you need a ride to work? I say, yup, absolutely. From there, what does that interaction look like? Is there an introduction? Does the car have a magnet on it with the dealership's logo? How do they know what's going on? 

Anthony That's the process at the dealership. So they have to decide how they want to communicate to the customer. I'm going to offer you a ride back to your home or work. Or better yet, when your car done, I'm just going to bring it to you. So once it's complete, drop it off. I'm going to drop it back off in your driveway. It should be done somewhere around four or 5:00 this afternoon. If not, we're going to communicate with you throughout the process. And in that case, it just becomes with the integration that we just did, it's a simple click of a button to say, hey, I need to bring this car back to the customer and the service advisor and the dealership, at that point, they're hands are off. The driver comes, picks up that car and does all that work, and then comes back in and hands the keys back if it's a pickup back to the service advisor.

Anthony It's at the appointment, or the service repair order is closed, then in order to bring the car back to the consumer or at the appointment level, they can select the service valet and we'll just go and pick that car up and or send an Uber to send them back home once the car has dropped off. So there's a bunch of different combinations that you can do, which is cool, makes it really flexible for the dealer and super convenient for that consumer.

Greg Yeah, that's great. So what has the momentum been for DRAIVER? Because I hear definitely in different markets too, it's a little different. But kind of the up and down flow of everybody's going remote and it's all online too. Well yeah kind of. And all the way to yep, not really at all. There's just not an appetite. So what you've seen in the last 12 months or more or less, whatever makes sense for you. And I'm sure again, it probably varies by market.

Anthony It does vary by market and also varies not only by market but by brand and dealership group. So it's like anything from the top down, if you want to implement a process, it's the top down that says, hey, this is the process that I want my customer to experience in whatever it is, a new DMS, a new advanced service product. It doesn't matter. You still need to have the top down say, hey, this is what we're going to do at our dealership because this is the experience I want to give our customer. And then once they commit to that, then the rest of the team starts to get trained well in and they live by it. I come from the old days in CRM and back in those days, to get somebody to go logging up was a huge task because they wanted to write it down on a piece of paper and keep it in their pocket and to train that paradigm shift is what we're doing now. And this reminds me what we're doing back in those days of bringing in CRM, now we're bringing in vehicle logistics that just nobody thinks about. It's just one of those things that you should think about because how do you know how much it's costing you today if you're not managing it, tracking it, or trying to be efficient to be able to even compare? Am I saving or losing money or offering a good service to my customer and my own employees? I wouldn't undo work on them to have to text Bob and Billy and Joe or Mary to find a driver. I use this analogy. Remember the days when you used to try to get a cab? You'd stand on the corner and you'd wave and you didn't know if there was a passenger in the car and every time you're like, oh, man. And it might take you 10 minutes to get a ride. And now you just pull your phone out and go, I need to go there. And you stand around and talk to your buddy. And a car pulls up and goes, Anthony, you get in it. So you don't have to find and pay money. And this is the other thing that's cool. When you order that ride, you know exactly how much it's going to cost you for that. I remember getting in a cab you didn't even know. When you order Uber, you know it's going to cost you $18, $2. Before you got in a cab, and it would just be like you just watched the thing tick. Now we know exactly. And we can measure those things and we can really control our costs because it's a cost factor no matter what and how you look at it.

Greg Yeah, you're right. Are there any scenarios where remote deliveries and things like that just aren't a good fit where you haven't seen it work?

Anthony Yeah. So there's markets where customers have just basically said, I would prefer to come down and test drive that car and go through that process face-to-face, and they just haven't adopted it. But it's a generational thing, right? So if you look at millennials or even Gen Z people. If you interview any of them and you said go to dealership, negotiate, spend a lot of time, have your car appraised versus be a Tesla model, go online, pick your car. It shows up in your driveway, they pick up your trade and take it back and you sign everything online. They're always going to pick B. Maybe my generation is going to say, no, I want to go down there and I want to negotiate and I want to be part of that experience. But that's changing. And over time, we're going to see a stronger shift to the B model. Yeah.

Greg That's fair. That's good. Good deal. All right. Anthony, it's been great to catch up. We hadn't talked in a while.

Anthony Same.

Greg But what haven't we touched on that we should or anything else you want to talk about at all that we need to touch on before we hop off?

Anthony Well, the exciting news between us, Reynolds and Reynolds and DRAIVER and then Uber, our third-partner in this, is that we have an integration now that it makes it really easy for our mutual clients to look up a customer, see that repair order and the appointment log and click. Literally, it's a click. And we're in the software development business and he says, oh, it's only one click. It really is to say, hey, order a ride or pick up their car. And it makes it so easy. And we're really excited about that integration because we know it's going to be a homerun for our mutual clients.

Greg 100%. All right, well, thanks again for joining us. Always a pleasure. And hopefully it won't be so long next time.

Anthony Thanks.