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TH E MAGA Z I NE OF TH E AU TOMOTI V E OI L CH A NG E A SSOCI ATION
IN THIS ISSUE:
One of a Kind – for Now
Amenities, Services, Products Lead To Success, Growth At Lucas Oil Center
MARKETING:
Targeted Marketing
REGULATIONS: INSURANCE:
Enjoy Your Power
‘Estatus Planaphobia’? On the Clock or Off the Clock?
HUMAN RESOURCES:
+ Pertinent Content from AOCA
EMV CERTIFIED WIRELESS PAYMENT SOLUTION
MOBILE CASHIER LubeSoft® Mobile Cashier EMV Certified Payment Processing
© 2017 INTEGRATED SERVICES, INC. THE INGENICO LOGO IS A TRADEMARK OF INGENICO AND NOLN IS NOT AFFILIATED, SPONSORED, AUTHORIZED OR OTHERWISE ASSOCIATED BY/WITH INGENICO. THE MERCHANT PARTNERS LOGO IS A TRADEMARK OF MERCHANT PARTNERS. APPLE IS A REGISTERED TRADEMARK OF APPLE INC. ANDROID IS A REGISTERED TRADEMARK OF GOOGLE INC. SAMSUNG IS A REGISTERED TRADEMARK OF SAMSUNG INC.
MESSAGE FROM THE PRESIDENT
BEHIND THE SCENES, SAVING YOU MONEY
© I S TO C K P H OTO . C O M / O K E A
Support for AOCA pays dividends for members, especially in Government Affairs Greetings once again from the beautiful city of Magnolia, Ark. There are two things you'll never hear anyone say. One is "Hand me that piano" (George Carlin). The other is "I went through Magnolia on my way to ...” I’m not suggesting Magnolia is out of the way, but there are a few places you can't get to from here. I was talking to Bryan White, the executive director of AOCA, about ideas to for a topic. He offered several really good ideas, but of course I decided not to use any of them. However, one topic got me to thinking about something completely unrelated to that topic, so I decided to write about that instead. Every year about this time, I start preparing my budget for next year. I print out the past two years’ detailed expenses and compare the two years line by line. I look for where I can cut $500 to $1,000 a month, then $100 to $500, so forth and so on. In most cases, I can't find $1,000 a month to cut, but I can find a lot of $10 a month to cut. It's a fun exercise, and it keeps me focused on the little things. This year was a little different. I saw some big savings versus last year. One big one was what I saved in credit card processing by signing up through the Saving4Members program offered to AOCA members. That savings alone was more than $5,000. That got me thinking: How much do I save by being a member of AOCA? As it turns out, not only do I have direct savings from benefits such as the credit card processing program, but because I learned about the problems with the KIA and Hyundai engines, I didn't have to pay for an engine that seized shortly after we did an oil change. That one item alone saved me $9,000 this year. Another example is the Monday HR Minutes from Affinity HR Group. I am not an HR guy, but the information contained in these short weekly emails has prevented me from making costly mistakes. But the biggest savings – or should I say the biggest benefit for keeping huge additional costs from ever hitting our business – is the work done behind the scenes by our Government Affairs people. Although it has a sexy name, Government Affairs is the most complicated, convoluted, confusing thing I've ever been involved with (kind of like marriage). These people (politicians and government agencies) must stay up late at night to come up with some of the dumbest business killing ideas they can think of. Joanna Johnson and the GA Committee work tirelessly and endlessly (because it never ends) to keep our world of business normal. And the sad thing is most people in this industry don't even have a clue about what almost just happened. Folks, it's scary, and without the membership and the dollars to fight these battles, we will lose the war.
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I just heard that the state of California is trying to ban the practice of tree hugging. It appears it's harmful to the environment and leads to global warming and acne for teenagers. Until next time,
David Haney AOCA PRESIDENT
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OIL & LUBE EXPRESS
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DHANEY3283 @ GMAIL .COM LUBE+ F A L L
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COLUMNISTS
David Haney
FALL 2016
THE MAGAZINE OF THE AUTOMOTIVE OIL CHANGE ASSOCIATION
C O N T E N T S
President, Oil & Lube Express dhaney3283@gmail.com
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Joanna Johnson President, Johnson Policy Associates, Inc. jlj4policy@gmail.com
Lauri Steeland Director of Sales & Marketing, PISTN lsteeland@pistn.com
Charlotte Jensen
6
3
FROM THE PRESIDENT AOCA's president, David Haney, invites readers to discover the
benefits of membership in AOCA.
Vice President, Affinity HR Group charlotte@affinityhrgroup.com
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ONE OF A KIND – FOR NOW Amenities, services, products lead to success, growth at
Lucas Oil Center.
Jack West
14
MARKETING Targeted Marketing: Google offers best opportunity to reach customers who need your services.
16
REGULATIONS Enjoy Your Power. Operators should use energy to help industry thrive.
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AOCA Beyond Quick Lube. Operators expand into new services to boost revenue.
National Account Executive Federated Insurance jewest@fedins.com
Bryan White Executive Director, AOCA bwhite@aoca.org
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INSURANCE 'Estatus planaphobia’? If you’re among sufferers, a visit with the right
attorney could be cure.
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HUMAN RESOURCES On the Clock or Off the Clock? There are many ways employees can put in time that is compensable.
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AOCA Board of directors, staff listing and contacts, AOCA mission statement.
Scott W. Angus
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Bedford Falls Communications scottangus47@gmail.com
FROM THE EXECUTIVE DIRECTOR Bryan White discusses how to avoid being ‘Ubered’. Advances in technology will require our industry to innovate, adapt.
P U B L I S H I N G S TA F F PUBLISHER
John Aufderhaar Bedford Falls Communications john@bedfordfallsmedia.com EDITORIAL DIRECTOR
AD SALES
Ryan Wagner Bedford Falls Communications rwagner@bedfordfallsmedia.com
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GRAPHIC DESIGN
Karen Leno KML Design, Inc. kmldesign@mchsi.com
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ON THE COVER
TH E MAGA Z I NE OF TH E AU TOMOTI V E OI L CH A NG E A SSOCI ATION
This operator profile features Bill and Brenda Floyd's Lucas Oil Center in Evansville, Ind.
IN THIS ISSUE:
One of a Kind – for Now
Amenities, Services, Products Lead To Success, Growth At Lucas Oil Center
MARKETING:
Targeted Marketing
REGULATIONS: INSURANCE:
Enjoy Your Power
‘Estatus Planaphobia’? On the Clock or Off the Clock?
HUMAN RESOURCES:
+ Pertinent Content from AOCA
LUBE+ is published on behalf of AOCA, the Automotive Oil Change Association, headquartered at 330 N. Wabash Ave., Suite 2000, Chicago, IL 60611. Toll-free: 800.230.0702 or 312.321.5132, Fax: 312.673.6832, email: info@aoca.org. © 2016 Bedford Falls Communications, Inc. 302 N. 3rd St., Watertown, WI 53094 PH: 920.261.1947
© I S TO C K P H OTO . C O M / A H M E T TOZ A R
In Tune and at your Service
✦ Know and understand the industry we serve. ✦ Know what our customers sell and how they bring their products to market. ✦ Know and understand the role of distribution. ✦ Know and understand the importance of educating everyone in the channel.
These are Bedford Falls Communications’ operating principles. We employ them in the development of each custom publication we produce on behalf of the clients we are privileged to serve. When we do our job properly, everyone is aligned to drive home the message you want delivered. Interested in a custom publication? Call us today. John Aufderhaar /
Bedford Falls Communications produces high quality association, trade and custom publications for corporate clients. If you are interested in a custom publication, please call us today.
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OPER ATOR PROFILE Lucas Oil Center OWNERS: LOCATION:
Bill and Brenda Floyd
2650 N Green River Road, Evansville, Ind. YEARS IN BUSINESS:
5
NUMBER OF LOCATIONS: 1; second under construction. NUMBER OF BAYS:
3
SECRETS TO SUCCESS:
Passionate employees with smiling faces • great customer service comfortable lobby • coffee bar • • excellent products • quality car wash
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ONE OF A KIND -
AMENITIES, SERVICES, PRODUCTS LEAD TO SUCCESS, GROWTH AT LUCAS OIL CENTER
FOR NOW
B Y S C O T T W. A N G U S
he Lucas Oil Center in Evansville, Ind., isn’t a cookiecutter quick lube. For one thing, it’s the only Lucas Oil Center in the world – at least for now. More than that, it looks and feels different. Owner Bill Floyd attributes much of the success at his combination quick lube and car wash to that look and feel. “The first thing you notice about the facility is the design and the look and size of the building,” Floyd said. The building has a tall, rounded bank of glass up front that encases its oversized lobby, making it look more like a car dealership or a bank. Inside, a 24-foot ceiling adds airiness to an interior bathed in natural light. “The building really breathes,” Floyd said. Small touches such as fresh mums in fall complement the welcoming atmosphere. The lobby itself is 2,000 square feet, which is about four times bigger than the reception and waiting space at the average quick lube. It features free Wi-Fi, a children’s play area, flat-screen TVs and a full-service coffee bar, which is tended and offers everything from coffee, lattes and cappuccinos to smoothies.
“What we’ve created is a blend of a state-of-the-art car wash, with a Starbucks-style coffee bar, and a fast lube, and it’s all branded Lucas Oil,” Floyd said. Those special touches and an emphasis on customer service have made the difference for this three-bay shop, which has been open for five years. Floyd has broken ground on another facility six miles away, and he has plans for more in Evansville and elsewhere in Indiana. It’s no surprise that Floyd and his wife, Brenda, ended up in this business. Floyd grew up in “a car family” in southern California and spent his early years with his hands in lawnmowers, go-karts, minibikes and motorcycles. He raced midget and sprint cars but eventually realized racing product sales would be a more rewarding career. He began selling, marketing and distributing racing and high-performance products, and that led to a job as vice president of a race car and high-performance-company that brought him to Indiana in 2000. Brenda, meanwhile, owned her own auto detailing business. The Floyds happened to be in Indianapolis when it was announced that Lucas Oil Products had bought the naming rights to the new Colts stadium. They were familiar with the company’s CONTINUED ON PAGE 8 ➤
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WHAT WE’VE CREATED IS A BLEND OF A STATE-OF-THE-ART CAR WASH, WITH A STARBUCKS-STYLE COFFEE BAR, AND A FAST LUBE, AND IT’S ALL BRANDED LUCAS OIL. BILL FLOYD
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AUTOMOTIVE OIL CHANGE ASSOCIATION
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products and ownership through their racing and work, but they knew that not everyone was and thought there was an opportunity. “Lucas Oil’s success was problem-solving additives. The stadium was being branded as Lucas Oil, and they weren’t really known as an oil company to Main Street America,” he said. So he and Brenda came up with a plan to build that familiarity. The Lucas Oil Center would be a car wash with fast lube and other amenities, and they pitched the concept to the company’s owners, Forrest and Charlotte Lucas. “A lot was timing, but based on our vision, we believed that our model would be so impactful and that what we had to offer the customer would be so impressive, we thought they would go for it,” Floyd said, adding that the tie-in to Colts football was another benefit for both sides. Lucas Oil liked the idea and believed and trusted in the Floyds, and the parties signed a license agreement in 2008. The recession and resulting banking contraction made it hard for the Floyds to move ahead, and it wasn’t until 2010 that they finally got the financing and the green light. The Lucas Oil Center opened in Evansville in May 2011. Lucas Oil Center offers a full range of preventive maintenance or “full-service oil changes,” as Floyd refers to the shop’s work. Besides oil and filters, that typically includes tire rotation, light bulb and wiper blade service, and battery testing and replacement as part of the LUBE+ F A L L
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21-point inspection. Tire rotations, Floyd said, offer the perfect opportunity – if warranted – to inform a customer that the brake pads are worn and the vehicle will need brake service soon. Lucas Oil Center however, takes a soft-sell approach, and Floyd thinks that customers appreciate a shop that doesn’t use scare tactics to push services. “We probably can’t do the service immediately because we have cars lined up, but we tell them if they want to schedule that brake job, we can do that for you,” Floyd said. “It’s just the fact that we give the customer options. We don’t use a scare tactic leading you to believe that you have to spend all of this money right now because the OEM service level says that is what to do. “That’s not the way to do business,” he said. The shop carries a full complement of Lucas Oil, products and additives, which Floyd believes are the best on the market. The variety of oils and filters is bigger than can be found in most parts stores, he noted. “There is not a car from 2016 on down to about the mid-‘90s that the air filter and oil filter isn’t in stock on our shelves, including the proper Lucas Oil, as well.” Two of Lucas Oil’s three bays are devoted to oil changes and related maintenance work, and the third oil-change bay has a twopost lift for extended service. Lucas Oil Center’s daily car count is in the 70s and has held CONTINUED ON PAGE 10 ➤
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steady, limited mostly by capacity, while the average ticket is now in the mid-60-dollar range. An oil change and full inspection with Lucas Premium is $36.99 for up to five quarts; higher-mileage oil is $46.99, and pure synthetic is $62.99, with special packages for trucks and diesel vehicles. The lobby and its amenities go a long way toward making customers comfortable and ensuring return visits, but Lucas Oil doesn’t stop there. Floyd talks of “the friendly faces” that people encounter when they arrive and throughout their visits, and he noted that the technician who works on a customer’s vehicle talks directly with the vehicle’s owner. Customers also can watch “live pit action” as their vehicles are serviced thanks to cameras top and bottom in every bay and six flatscreen TVs in the lobby that are labeled by bay number. One of Lucas Oil Center’s biggest challenges is that it’s almost at capacity in terms of oil changes, Floyd said, so the car wash offers the most growth potential until the new facility opens. The existing shop’s three service bays are full and backed up most of the time. The shop’s goal is to get cars in and out as soon as possible, but technicians can only work so fast while following the company’s procedures. “The difficult thing about a busy shop is you stop and you have four cars ahead of you, it’s going to be 15 or 20 minutes for each car. It just takes that long to do the proper oil change and do the things that we do,” Floyd said. While Lucas Oil Center engenders loyalty, up to 18 percent of its business is from new customers daily. In an ironic way, Floyd said, extended intervals between oil changes have helped his shop because “more new customers will get to come in and experience this.”
AUTOMOTIVE OIL CHANGE ASSOCIATION
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BILL FLOYD BELIEVES IN AOCA AND ITS MISSION Bill Floyd is a believer in industry associations and trade shows. He marketed and sold auto racing and high performance products before opening Lucas Oil Center, and he’s seen the benefits of being involved and interacting with other owners in both industries. He was an active participant in the SEMA (Specialty Equipment Market Association) and PRI (Performance Racing Industry) shows for more than 25 years and understood the value of trade shows. He served on the SEMA council for eight years and was chairman of the Motorsports Parts Manufacturers Council. When he and his wife, Brenda, moved into the quick lube business, they needed information and advice on things such as products, tools and equipment, financing and how to get up to date on new car technology. They naturally turned to AOCA and iFLEX. Floyd attended his first iFLEX show in 2008 and hasn’t missed one since. “For me, as an outsider to the industry and its members, I was full of questions and took every opportunity to network with companies and individuals. There is no better place to do this than the format of a trade show with sponsor-hosted events and seminars with likeminded business owners and employees,” Floyd said. As an AOCA member, Lucas Oil Center has taken advantage of discounts, management classes and the online technician academy. Floyd is now a member of the AOCA board and an advocate for the organization, its mission and its services. “Through racing, we always worked to stay ahead of our competitors, never sitting back waiting to get beat, not being complacent,” he said. “I believe our greatest challenge is staying current and keeping up with new car technology and continuing to cultivate passionate young people as technicians and managers.” n
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Official Digital Marketing Partner of AOCA
K ETI N
The Oil Industries Leading Online Marketing Agency Just Don’t Take Our Word For It ... Since we went live with PISTN web system, our car count during the second quarter of 2016 has resulted in record car counts every month. —Louis Church, Kwik Kar Ridgmar PISTN captured the essence of who we are and tied all my social media to my website. They delivered on time and exceeded my expectations. —Bobby McCue, American Lube Express
For more information call, email or visit us today: 1-800-742-4511 • info@pistn.com • www.pistn.com 12
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Lucas Oil Center has 22 employees who are mostly trained in house. Managers are AOCA certified, and the company has created standard operating procedures that are a “constant work in progress,” Floyd said, noting that every position has a job description and workers are tested to be sure they are up to date on job skills. Floyd believes strongly in the importance of location. He built in an area that already had a big box store, and he’s since seen growth that includes another big box, a 200,000-square-foot grocery store, a gas station, a pet center and several fast food restaurants. “It’s all about the traffic, and we’re seeing more and more,” he said. While Lucas Oil Center maintains its own website and uses social media such as Facebook to reach out, Floyd believes a digital message center out front is his best marketing tool. Some 35,000 vehicles pass every day, and the appropriate message – changed with the click of a mouse at his desk inside – can prompt people to stop. “With the flick of a button, I can say ‘No waiting,’ and cars show up,” Floyd said. “We promote tire rotation, and all of sudden guys in the shop will say, ‘Do you have the tire rotation banner up?’ because they can tell. It’s the same thing with wiper blades. The message center was an expensive investment, but it was a one-time investment.” Because of the company’s success, the Floyds are expanding. They broke ground this fall on their second Evansville shop, which won’t have quite the same amenities but will include four bays instead of three. He has plans for four to six shops total in the Evansville tri-state area, and he wants to eventually spread into Indianapolis and beyond. From the beginning, the support of Lucas Oil corporate and especially owners Forrest and Charlotte Lucas and their son Morgan has been critical. “They are passionate about what they do. We’re passionate about what we do. We’re a family-run business like they are. They appreciated the dreams and hard work that we put into it because that’s how they built their business,” Floyd said. While the quick lube business overall faces the challenge of how to respond to longer oil-change intervals, Floyd believes he and Brenda have found a winning formula. “We’re not the cheapest, but we’re a place that people like to go,” he said. “In my previous life, I believed in the brands that we were selling. They were on the higher end of the scale, but that’s because we were offering a better-quality product. “I feel the same here. We believe the oil products that we’re pouring in the car are the best in the industry. The environment that they get to sit in, it doesn’t come for free.” L+
AOCA BY THE
NUMBERS 3,500
WHO IS THE AUTOMOTIVE OIL CHANGE ASSOCIATION?
Quick lubes represented across all 50 states, Canada and Mexico
AOCA is the only non-profit trade organization representing the convenient automotive service industry. AOCA is dedicated to: • Enhancing the competency of fast lube owners • Educating the public about the benefits of preventive automotive maintenance • Maintaining a favorable business environment for the industry
500+ Operators 100+ Vendors
600+ 60+
Members
Products in the AOCA Store
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300 3
Management Certification Courses
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Fast Lube Owners and Operators at the International Fast Lube Expo
Monthly Government Affairs Updates
Discount Programs Through Strategic Partnerships
8
On-demand Lessons in the AOCA Online Technician Academy
Join now at www.aoca.org
M A R K E T I NG |
FROM THE LUBE+ EXPERTS
TARGETED MARKETING:
GOOGLE OFFERS BEST OPPORTUNITY TO REACH CUSTOMERS WHO NEED YOUR SERVICES BY LAURI STEELAND PISTN: MARKETING ACCELERATED
W
ith so many options for online advertising these days, it’s hard for owners of quicklube businesses to know where to put their money.
AUTOMOTIVE OIL CHANGE ASSOCIATION
The online marketing world is confusing and can be intimidating, particularly for small business owners who already have enough to do running their shops, managing staff and just generally keeping the lights on.
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But online advertising is a must. More than 90 percent of consumers are online today, and if they’re not actively shopping, they’re looking for a place to go. The two easiest, most effective ways to advertise online are through social media sites such as Facebook and through the use of a payper-click service such as Google AdWords. Google AdWords is, simply, advertising with Google. Google is by far the biggest online market. Consider this: Every day, about 2.9 billion searches are reported on Google. That’s a lot of people looking for a lot of different things. True, it’s a global phenomenon, but chances are someone is looking for somewhere that provides your level of service in your community right now. LUBE+ F A L L
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FROM THE LUBE+ EXPERTS
| M A R K E T I NG
Online advertising is a must. More than 90 percent of consumers are online today, and if they’re not actively shopping, they’re looking for a place to go.
1. People use keywords or search terms to look for specific products and services, such as oil change services or auto repair shops. 2. You select keywords or search terms that match the service you’re offering or the product you’re selling. 3. If those search terms match what people search for, then your ad appears above organic Google search engine results. 4. People who click on your ad are directed to your website or encouraged to call your business. 5. You pay for each click, up to the budget you’ve allocated.
Google AdWords has plenty of advantages. It’s measurable. You’ll know the number of clicks, impressions, the click-through rate, number of conversions and more. It’s cost effective. You only pay when someone clicks on your ad, which is an important distinction and much more effective than paying for something that someone will ignore or scroll by. Another cost benefit is that you can determine exactly what you want to spend. You can spend as little as $5 a day or thousands of dollars—if you so desire. A skilled firm can help manage your Google AdWords and help you maximize your click rates and improve your results. It’s immediate. People are heading to the Internet to look for the service you offer. Google AdWords is very relevant in that way – it’s like the good old days of putting an ad in the phone book. Google AdWords ads send higher quality leads and visitors to your
business website. It’s relevant to your location. Google AdWords provides you an unprecedented ability to target your advertisement. There are several ways to target your ads: 1. LOCATION. You can target specific geographic areas or specific zip codes for each ad campaign. The more defined your targeted search is, the better your opportunity to create the kind of specific keyword ad campaign that’ll drive customers to your door. 2. MOBILE. That’s right, you can target mobile phone users. With an increasing number of consumers looking for goods and services through their phones, this is a huge advantage.
Lauri Steeland is director of sales and marketing at PISTN: Marketing Accelerated. To learn more about how you can create an effective website that will help grow your business, contact Lauri at Lsteeland@pistn.com, 800-742-4511 Ext. 103 or visit www.pistn.com.
3. TIME. Are there specific hours during the day you think consumers will be looking for you? If someone is looking for an oil change, for example, are they more likely to be searching first thing on a Saturday morning or at 10:15 a.m. on a Tuesday? With Google AdWords, you can select the time you think will be most relevant to potential customers.
Google AdWords is a powerful tool to help your business beat the search engine optimization game. When managed effectively, your ads only show to pre-qualified, potential customers. Facebook is also a valuable online advertising tool, but it’s important to know that Facebook doesn’t offer the same refined targeting options as Google AdWords. Therefore, consider using Facebook as a branding tool, not a call-to-action tool.
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Google AdWords gives you the first crack at them. Here’s how it works:
Not sure which online advertising option is right for your marketing goals? Contact your website provider as the people there should be able to provide you importance advice on which online advertising strategy is right for you or they can help connect you with a firm that can. L+ LUBE+ F A L L
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R E G U L AT ION S |
FROM THE LUBE+ EXPERTS
ENJOY YOUR POWER. OPERATORS
SHOULD USE ENERGY TO HELP INDUSTRY THRIVE ©IST
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TO PHO
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BY JOANNA L . JOHNSON
AUTOMOTIVE OIL CHANGE ASSOCIATION
JOHNSON POLICY ASSOCIATES
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Joanna L. Johnson has represented AOCA since 1991. She is the president of Johnson Policy Associates, a consulting firm that specializes in win-win strategies for environmental, transportation, competition, consumer protection and safety issues. She has developed many regulatory solutions for fast lubes, including the CERCLA Service Station Dealer Exemption Application Process and the Fast Lube Self-Certified Oil Spill Prevention Plan. She can be reached at 515.991.4971 or jlj4policy@gmail.com
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hat is personal power? Is it about controlling as many people as possible? Does it require immediate satisfaction results, like smashing a malfunctioning computer? Does it mean getting exactly what you want the moment you want it? Most readers will recognize those concepts from “The Cranky Toddler’s Guide to Happiness,” but plenty of intelligent, rational adults unconsciously default to them when faced with certain stressful challenges, especially the ones that require loads of cooperation, patience and educating opposing forces, such as government affairs. The human nervous system is wired to put survival first. When triggered, it overrides higher cognitive functions and knocks us temporarily back into toddler mode where we automatically fight, flee, freeze or fawn, depending on our individual abilities and the way we were raised. The surprising twist here is that humans can react to perceived threats regarding business, finances and even simple ego interests as if their literal, immediate, physical survival were at stake.
That’s why the most common responses to an unfavorable regulatory or legislative proposal are fight (Incredible Hulk), freeze (ostrich with head in the sand) and flee (Road Runner). The Hulk defaults to trying to control everyone and gain some immediate satisfaction via raging, which rarely, if ever, works. The ostrich immediately recognizes he can’t control everyone or rage without serious consequences, so it unconsciously shuts down and denies it’s happening. The Road Runner flies out the door to focus on preferable things. Regulation, legislation, liability? Who cares? There’s no time to bother with stuff like that. Besides, if the Road Runner keeps moving, nothing bad will ever catch up to him. All of these responses are part of the same human malfunction – getting distracted by survival responses instead of staying grounded where the real power lies. In the context of the fast lube industry, real power is found in each operator’s daily opportunity to:
★ Create and reinforce customer and
employee relationships that are successful and satisfying for everyone involved.
★ Experience the fulfillment of earning a
good living by providing an important service that the motoring public needs for both safe vehicle operation and to maximize the long-term value of their automotive investment.
★ Strengthen the reputation and
operating capacity of the fast lube industry as a nationwide network of responsible, professional business owners with unparalleled expertise in the fast, convenient, cost-effective delivery of preventive automotive maintenance services and, by doing so, defend against unfair competition and unreasonable regulation.
If you’re wondering how that last one works, it’s actually pretty simple. Refuse to let your mind get clouded or drained by survivaltrigger negative thinking regarding industry issues and televised political theater. Instead, use your precious energy to make your industry thrive.
HERE’S HOW:
Support the national organization that represents your best interests to the world: AOCA. The more members AOCA has, the more work it can do on your behalf, leaving you more time to calmly focus on the business of running your business. Are your suppliers supporting AOCA, too? If not, ask them to join. As their customer, you’re in a uniquely powerful position to make that request. Take reasonable efforts to contribute key data. From nearly 30 years of experience with Magnuson Moss Warranty Act enforcement, AOCA knows the most powerful way to motivate legislators, regulators and consumers is customer-survey data showing how automobile dealerships, OEMs and their advertisements scare consumers into believing they can’t use aftermarket parts and services. Ask your customers to participate in AOCA’s online customer survey at www.surveymonkey.com/r/MVL7B9H. It’s fast, easy and critical to ensure both your industry’s reputation and ability to obtain adequate enforcement of the law.
Take minimal steps to stand up for yourself and your industry. There is currently a disconnect between aftermarket transmission fluid product manufacturers and state weights and measures regulators regarding product claims and labeling. Although AOCA supports the aftermarket manufacturing community and knows of no actual damages caused by their products, innocent installers are being dragged into expensive investigations. Unless or until the regulatory framework is officially clarified, you have some more customer power available to exercise. If you are purchasing non-OEM-approved transmission fluid products, require your supplier to guarantee in writing that (1) their products meet all state and federal regulatory requirements and (2) the supplier will defend and indemnify you from any action brought against you claiming that their products do not meet any state or federal standard.
You have far more power than you realize, and there’s never been a better time to use it. Enjoy! L+
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Samples are availalble. Call 1-800-528-0334. www.oileater.com LUBE+ F A L L
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Diagnosing Your Quick Lube Shop FOR THE FUTURE
There has never been a better time to be in the automotive service industry. Although we are in the beginning phase of a revolution in the industry, the outlook for service and repair shops is optimistic. Now is the time to take a hard look at how you operate, market and manage your business to seek out new avenues for future growth. Now is not the time to be an absent owner, you need to be active in your business to ensure you thrive and survive.
Thriving in a Changing Industry
AUTOMOTIVE OIL CHANGE ASSOCIATION
1. Actively Pursue Commercial Accounts Only 9% of fast lube annual sales came from fleets in 2013. Most small and midsized fleets outsource their maintenance and repair work; particularly fleets with less than 50 vehicles. Looking ahead in 2017, if you don’t already have a plan of action in place to go after the fleet business – start developing one ASAP! Pursuing commercial accounts requires specialized marketing expertise and is quite different than consumer marketing. Having a multi-channel marketing strategy is crucial. You need to utilize both online and offline advertising tactics to gain the attention of the decisionmakers. Direct mail is one offline channel proven to get respectable response rates. It allows you to target specific commercial accounts precisely by: u industry
type
2. Go Above & Beyond on Customer Conveniences The automotive oil change business is mostly convenience-driven. Are you equipped to provide additional services like total fluid replacements, tire rotations, wheel alignments, and full detail services? If not, you’re missing a huge opportunity for upselling. Getting those routine maintenance services all at once creates a one-stop shop – ultimately saving customers’ time and money. More importantly, creating a pleasant customer experience is critical in building customer loyalty and making your shop memorable. You can differentiate your quick lube shop by implementing or personalizing any of the following: u comfortable u mobile
u longer
u business
u store
u annual
location
sales
u number
of employees, etc.
You can cater your enterprise to commercial customers with fleets of vehicles, such as taxi services, delivery companies, or utility providers. This approach is easier if you have the expertise and manpower to service commercial vehicles or can operate a mobile service.
service
u payment
u fleet-size
customer waiting areas
options
shop hours
front & curb appeal
u warranties u meet u car
& greet protocol
wash & detail services
u accepting
customers without appointments
u free
Wi-Fi
u gourmet u HD
coffee & bottled water
television
Identify ways to differentiate your shop based on service and the customer experience itself. Keeping in mind that convenience is oil change customers'
priority, conduct a survey of your local market and devise a market strategy to offer an even more convenient oil change experience. 3. Advertise & Market Your Business Consistently Marketing and advertising are considered discretionary by many small business owners. You should never think of it in that manner! Startup oil change businesses face intense pressure from entrenched chain competitors and auto dealerships. Regardless of how big or small your full market potential is, you must invest the money and expertise in keeping your brand top of mind. Don’t overlook consistency because it is the net results over time that will push you beyond the impact of a single advertising campaign. Instead of giving up on advertising when you get mixed results, keep trying different things to find something that works. Because doing nothing is sure to fail. As mentioned above, advertising consistently, using both online and offline marketing channels, will produce optimal response rates. Hands down, the best offline marketing tactic, is direct mail advertising. It has proven to generate the highest customer acquisition rates above other mail marketing mediums such as shared mail, Valpak, money mailers, etc. These types of mail advertisements force you to compete on price alone. The odds of coming out on top in a price war with specialty franchise chains are remote.
1 Source: National Oil and Lube News – Independent Fast Lube Operators Survey
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102017 Ten Reasons You Can't Miss iFLEX
O
nce again, AOCA will be co-locating our
annual iFLEX convention and tradeshow
with the International Carwash Association's (ICA)
annual The Car Wash Show. ICA is a nonprofit group representing the
retail and supply segments of the professional car wash industry in North
America and around the globe. Last year alone, the show attracted nearly 7,000 car wash, quick lube and related business professionals.
Held April 4-6, 2017, at the Las Vegas Convention Center, iFLEX 2017 is an event you won't want to miss! Check out the top ten reasons to attend:
1. The size and scale of the event. Last year's event hosted 400 exhibitors and 8,000 industry professionals.
2. Powerful networking opportunities. Network with operators and vendors from around the globe.
3. Be inspired. iFLEX 2017 will open your eyes to the latest trends in the industry. Return home feeling inspired with new business ideas!
4. Growing attendance. The 2016 show had a 15 percent increase in attendance from 2015.
5. A wide variety of education sessions. iFLEX 2017 will feature a number of
industry educational events that are guaranteed to provide practical advice and reallife solutions for business growth and success.
6. Trade Show. Connect with hundreds of exhibitors and industry professionals on the 7.
trade show floor.
The largest show floor in the industry. The 2016 event had 137,000 net square feet of product and service displays.
8. Discover new products and innovations. You'll gain valuable insights that you can take with you to grow your business.
9. Learn from industry experts. Hear directly from vendors within the industry on solutions that will help you with a current business challenge.
10. Take advantage of what Las Vegas has to offer. A place like no other, Las
Vegas is known for its famous attractions, first-class entertainment, great music and fine dining. Explore the city and take advantage of all it has to offer!
Registration for iFLEX 2017 is now open. Visit www.aoca.org to register.
AT THE CAR WASH SHOW 2017™
BEYOND QUICK LUBE
OPE R AT OR S E X PA N D I N T O N E W S E RV ICE S T O BOOST R E V E N U E
A
BY AOCA
s with many industries, the oil and lube business isn’t what it used to be. Advancements in technology have allowed for increased fuel efficiency, long-lasting parts and improved mechanics. Vehicles are out on the road longer than ever, with less automotive maintenance needed over longer distances and time. But these improvements don’t mean fast lube services have fallen to the wayside. Far from it. The U.S. automotive oil change and lubrication industry includes nearly 5,000 companies with combined annual revenue of an estimated $5 billion, according to First Research’s Automotive Oil Change Lubrication Services Industry report. The question is: How do automotive oil change businesses tap into a larger market to respond to the challenges created by longer intervals between oil changes? The answer: By expanding into new services to capture additional revenue. In a recent survey of Automotive Oil Change Association (AOCA) members, respondents shared the types of services available at their businesses. Aside from oil change services, these businesses offer: Car wash Tire repair/replacement Light automotive repairs Full-service automotive repairs Vehicle emissions Window and glass repair/replacement Gasoline/service station Convenience store
Car wash services are offered by 41 percent of those surveyed, making it the second-largest service category behind oil changes. People may be taking longer between oil changes, but many still enjoy clean, shiny cars. Offering additional services beyond traditional oil changes is a strategic way to attract consumers and boost revenue. It’s not only an expansion of your business but also a growth of brand awareness, customer reach and promotion of services. Before deciding whether or not to add extra services, examine key factors:
• • • •
Answered: 51 Skipped: 1
Is your shop equipped to handle a new service? Will this service add convenience? Does your shop have the means to perform a new service well? Will you increase your profit with this service?
And remember to talk to your customers to gauge their interest. If new services aren’t desired, there’s little point in squandering resources on them. Be honest with yourself in the best interest of your quick lube shop’s future and potential for growth.
If you decide it is the right time to diversify your services, you need to determine the best way to execute your plans. If you do too much too quickly, you risk burning out, spreading your resources too thin and creating a financial flop. Take into consideration these logistics:
• Location. In your area, is there a void to be filled with additional
automotive services? Or maybe there’s opportunity beyond your local community. Expanding your current footprint or opening an additional location can boost your clientele.
• Demographics. Are you reaching the widest, largest group of consumers possible? Consider the profile of your typical customer and determine how you can expand beyond that.
• Ecommerce. Maybe your facility offers a small collection of
products to customers onsite. Is it time to sell your products online? An online store is an easy way to expand your reach to consumers.
• Partnerships. Oil changes are what your business does (and
does well), but maybe you don’t know enough about a particular type of service to begin offering it yourself. Find another business to form a partnership. A joint venture with complementary or related businesses allows you to expand your reach without investing a lot of money in new infrastructure and overhead. Don’t forget: To get any new endeavor off the ground, it will take investment – in time, expenses and training. Once you develop your strategic growth plan, follow through and commit to the new vision for your quick lube shop. L+ LUBE+ F A L L
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W W W. AOCA .ORG
• • • • • • • •
Please select all services and/or business operations you and your company are involved with.
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I N S U R A NC E |
FROM THE LUBE+ EXPERTS
‘ESTATUS PLANAPHOBIA’? IF YOU’RE AMONG SUFFERERS, A VISIT WITH THE RIGHT ATTORNEY COULD BE CURE BY JACK WEST
AUTOMOTIVE OIL CHANGE ASSOCIATION
FEDERATED INSURANCE
22
Jack West is a National Account Executive for Federated Insurance. Located in Owatonna, Minnesota, with representatives in 47 states, Federated is AOCA’s exclusively recommended insurance provider for association members. Federated provides customized coverages and proven risk management techniques to more than 3,000 quick lube and auto service centers nationwide. Jack can be reached by phone at 800-533-0472 or by email at jewest@fedins.com. For more information on Federated, visit its website at www.federatedinsurance.com.
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Never heard of “estatus planaphobia”? That’s not surprising given that it’s a made-up, humorous attempt to describe a real thing – the fear of estate planning. Among business owners, it is well-known that estate and business succession planning are important for the well-being of their families and businesses, and owners of quick lubes are no exception. Yet, the often-cited statistics paint a different, disturbing picture: Only 30 percent of family businesses make it to the second generation, and even fewer make it to the third. Why do so many business owners fail to do the planning they know they need? They fear it’s too hard, too expensive or too time consuming – a.k.a. “estatus planaphobia.” If you’re suffering from “EP,” a few tips may help remove some of the anxiety and frustration from your planning process. ■ Work with an attorney who specializes in estate and business planning. Just as there are specialists in many professions, there are attorneys who concentrate their practices on estate and business succession planning. Look for someone with years of experience working with small business owners.
■ Be prepared. If the attorney provides a premeeting questionnaire, fill it out. You don’t have to have all the answers, but the exercise of pulling together the responses will not only get you into the right mindset for planning, it will also save time and allow you to hit the ground running at that first meeting.
■ Consider an attorney who offers a no-cost initial consultation. This allows you to use that first meeting to gauge whether this person is someone with whom you feel comfortable working and obtain a quote up front for the fees involved for developing your plan.
■ Compile a personal financial statement listing all of your assets and liabilities, along with their estimated values. For example, you should include real estate holdings, bank and investment accounts, retirement plans such as 401(k)s or IRAs, unusual personal property such collections or artwork, life insurance policies, your business interests, etc. This will give your attorney a general idea of the complexity of the planning you may need.
FROM THE LUBE+ EXPERTS
■ If you have any existing planning documents, provide copies to the attorney. A review of your current will, trust or buy-sell agreement may show that it’s valid and still meets your needs. However, your attorney may find that changes in the tax laws or your family situation may indicate that modifications are necessary.
Marc Loden, an estate planning attorney in Madison, Wis., offers this advice: “An attorney’s specific advice and recommendations cannot be given until the client’s current information has been reviewed. Putting in the effort upfront to organize and deliver this information pays significant dividends in being able to get specific recommendations and fee quotes.”
■ Think about your ultimate goals. You should know what you want to happen, but you don’t necessarily need to know how to get there. Maybe your goal is for a child to take over ownership of your business. Selling the company to him/ her during your lifetime, transferring it as a series of lifetime gifts, or designating it as an inheritance after your death may all be options for you to consider. Whatever your objectives, your attorney needs a firm understanding before offering suggestions.
Don’t put off starting to plan or reviewing your existing plan because you’re afraid of the work and complexities that may be involved. With a little advance preparation, the process should be much simpler and easier than you had expected, and you will cure yourself of “estatus planaphobia.” L+
|
I N S U R A NC E
Think about your ultimate goals. You should know what you want to happen, but you don’t necessarily need to know how to get there.
W W W. AOCA .ORG
■ Share any special or unusual family dynamics with your attorney. For example, a special needs child might warrant specialized provisions to ensure his/her welfare after you’re gone. Similarly, a child with substance abuse, gambling or other problems that could affect his/her future financial well-being may signal the need for provisions to protect that child from him-/herself.
© I S TO C K P H OTO . C O M / P I N K Y P I L L S
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H U M A N R E S OU RC E S |
FROM THE LUBE+ EXPERTS
ON THE CLOCK OR OFF THE CLOCK? MANY WAYS EMPLOYEES CAN PUT IN TIME THAT IS COMPENSABLE BY CHARLOTTE JENSEN VICE PRESIDENT, HR COMPLIANCE, AFFINITY HR GROUP
W
24
General Any time in which an employee is “suffered or permitted” to work is compensable. This includes work not requested as well as work the employer knew or should have known the employee performed. Common trouble spots include working
through lunch, coming in early to avoid traffic, “volunteering” time, taking work home and responding to emails after hours. All of these hours have to be logged and earnings paid to the employee. Breaks and Meal Periods Except for minors, federal law does not require employers to provide breaks (although some states DO have break requirements). However, the law does determine when any breaks must be paid. Short breaks, generally under about 20 minutes, have to be paid, as such short periods of time are more for the employer’s benefit and do not really provide employees time to engage in personal pursuits. Accordingly, employers may require employees to stay onsite during paid breaks. Bona fide meal periods of at least 30 minutes can be unpaid, but only if employees are completely CONTINUED ON PAGE 26 ➤
© I S TO C K P H OTO . C O M / D M I T R I I D U Z H A N I N
AUTOMOTIVE OIL CHANGE ASSOCIATION
Charlotte Jensen is a contributor for Affinity HR Group, LLC, AOCA’s affiliated human resources partner. Affinity HR Group specializes in providing human resources assistance to associations such as AOCA and their member companies. To learn more, visit www.affinityHRgroup.com.”
hile most quick lube operators understand their minimum wage and overtime obligations for non-exempt employees, not everyone is familiar with the complexities of determining what time is considered compensable. This is an important distinction. Obviously, time in the shop during the work day is working time, but there are a number of other ways employees may spend their time that are considered “hours worked” by the Department of Labor and therefore must be paid time.
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224 OCATIONS E 64 L ASED SINC H 4 C 1 R 0 U 2 P Y R A U N JA S E B U L K C I
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FROM THE LUBE+ EXPERTS
➤ CONTINUED FROM PAGE 24
relieved of their duties during that unpaid time and perform no work. To ensure they don’t inadvertently perform work-related tasks, many employers require employees to leave their workstation during unpaid breaks. It is important to note that for these breaks to be unpaid, they must be 30 or more continuous minutes; they cannot be converted into, say, two 15-minute breaks at different times of the workday.
Meetings, Trainings, Etc.
Travel Time
R Attendance is truly voluntary, which
While there are many scenarios for local travel, most of which is paid, this article addresses travel that takes an employee away from their home city. Whether this time is paid, and to what extent, depends on whether the out-of-town travel is all in one day or requires an overnight stay.
AUTOMOTIVE OIL CHANGE ASSOCIATION
Travel away from the employee’s home city when the employee returns home the same evening is paid because it is not ordinary home-to-work travel – in other words, the hours the employee spends getting to and from the destination need to be logged as work hours. However, employers may deduct normal commuting time from the amount – that is, the time it normally takes the employee to travel from home to their regular place of work and back home again.
26
Overnight travel is a bit trickier. The time an employee spends as a passenger traveling to/from the away city is paid to the extent it crosses the employee’s normal work hours, regardless of the day of the week. So, if the employee normally works 8 a.m. to 5 p.m., travel to/from the away city that occurs between 8 a.m. and 5 p.m. must be paid, even if it’s not a day of the week the employee normally works. Travel outside of that timeframe generally does not have to be paid, unless the employee performs any workrelated functions during the time. Note that if the employee is required by the employer to drive to the away city (versus being a passenger on any mode of transportation), any time spent driving is considered work time, no matter when it occurs.
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Of course, employees must be paid for any meetings or training sessions that they are required to attend. However, there are circumstances for which their attendance at these types of functions can be unpaid, provided all four of the following criteria are met:
R Attendance is outside of normal working hours.
is not the case if an employee feels coerced or that not attending will have a negative impact.
R The content of the function and the
time spent is not directly related to the employee’s current job.
R The employee performs no other work during the time.
common situations must be paid, including on-call time, waiting time and sleep time. What employers need to remember in these situations is that any time employees spend while connected to or under the control of their employer, even though they may not be actively producing, is likely to be compensable. Further, while many of these circumstances may not “feel” like actual working time, because the time is considered hours worked, then it does count toward overtime. Employers can minimize their exposure to overtime by restructuring work weeks in which these extra functions occur to ensure the employee’s total time for the week, including these activities, does not exceed 40 hours. A final word: Failure to pay non-exempt employees for these times can result in up to three years of back wages and taxes, fines, penalties, liquidated damages and criminal prosecution. L+
Q A
While the above scenarios are the most common that employers face, the Department of Labor also has parameters for when less
Q: We hire a large number of hourly workers. Recently, about 50 percent of our candidates for hire are failing our drug tests. Should we be reconsidering testing them if it’s weeding out too many?
A: It is always a good thing to know what drugs are on your screening panel. Some medically approved medications will trigger your drug test, and allowing medically prescribed use could be considered a reasonable accommodation under the Americans with Disabilities Act. Therefore, it is important to assess each situation. Also, obtaining documentation from the prescribing physician is important and, especially for businesses in states with legalized medical or recreational marijuana, having a clear policy about working under the influence and about medically necessary drug use is important. That said, it is clear that the nation’s current opioid addiction levels are putting pressure on business leaders as they try to maintain adequate staffing levels. Our best recommendation is that, barring medically necessary drug use, maintaining a zero-tolerance drug-free workplace is critical to keeping your employees safe and your business productive and profitable.
330 N. WABASH AVENUE, SUITE 2000 | CHICAGO, IL 60611 TOLL FREE: 800.230.0702 | TEL: 312.321.5132 | FAX: 312.673.6832 EMAIL: info@aoca.org | WEBSITE: www.aoca.org
AOCA BOARD OF DIRECTORS PRESIDENT
David Haney Oil & Lube Express dhaney3283@gmail.com VICE PRESIDENT
Dave Jensen Pennzoil 10 Minute Oil Change Centre Penn10w@rogers.com TREASURER
Bob Falter Multi Mgmt Inc. D.B.A. Jiffy Lube multimgtrjf@aol.com
AOCA STA FF CON TACTS MEMBERSHIP & OPERATIONS
EXHIBIT & SPONSORSHIP SALES
Bryan White
Robb Shrader
EXECUTIVE DIRECTOR
SPONSORSHIP SALES
312.673.4959 bwhite@aoca.org
312.673.5581 rshrader@aoca.org
Megan Schwartz
GOVERNMENT AFFAIRS POLICY ADVISOR
MEMBERSHIP COORDINATOR
Joanna L. Johnson, PRESIDENT
312.673.5979 mschwartz@aoca.org
JOHNSON POLICY ASSOCIATES, INC.
Gena Parsons MEMBERSHIP ASSOCIATE
312.673.5775 gparsons@aoca.org
P.O. Box 13302 Des Moines, IA 50310 515.277.4320 (OFFICE) 515.991.4971 (CELL) 515.277.4340 (FAX) jlj4policy@gmail.com
SECRETARY
Jim Grant
DIRECTOR
Bill Floyd Lucas Oil Center Bill@lucasoilcenter.com DIRECTOR
John Lindsay Power Lube Express Auto Care powerlube@cableone.net DIRECTOR
Greg Strawhun Lube Specialties, Valvoline Express Care gb1424@yahoo.com VENDOR DIRECTOR
Jeff Malicote Valvoline Express Care wjmalicote@windstream.net VENDOR DIRECTOR
Steve Barram Integrated Services, Inc. steve.barram@ints.com VENDOR DIRECTOR
Sean Malmstrom S&E Quick Lube Distributors Inc. sean@selubeproducts.com
OUR MISSION
AOCA is dedicated to providing its members with the business tools, resources and education to professionally and successfully deliver convenient automotive oil changes and other preventive maintenance services. HISTORY OF AOCA
The Automotive Oil Change Association (AOCA) is a non-profit trade organization representing the convenient automotive service industry. The association was founded in 1987 and is headquartered in Chicago, Illinois. AOCA is dedicated to enhancing the competency of fast lube owners, educating the public about the benefits of preventive automotive maintenance and maintaining a favorable business environment for the industry. AOCA members adhere to a Code of Ethics and a Standard of Service Excellence. Members provide “Professional Service at YOUR Convenience” to the motoring public, helping to extend the life and safety factors of their motor vehicles through quality maintenance. A C O M M I T M E N T T O E D U C AT I O N
Emphasizing education, the AOCA provides expert technical training for lube center employees. For business owners and managers, the organization provides programs to enhance management skills, automotive engineering and industry issues. The association also serves as a resource for consumers regarding the benefits of regular, preventive maintenance in protecting their automotive investment. As part of its commitment to education, AOCA has a scholarship program that provides tuition assistance to employees of member firms attending institutions of higher learning. AOCA: THE INDUSTRY LEADER
In addition, AOCA provides counsel on regulatory issues, represents the industry on Capitol Hill, and develops research data on the convenient auto service market. The association also makes available a wide variety of business products and services to help members improve business operations.
W W W. AOCA .ORG
FastLube jsgrant@fstlube.com
AOCA accounts for over 3,500 auto maintenance centers throughout the United States, Mexico, Canada and many other countries around the world. What made AOCA the industry leader? The answer is simple. We give our members access to tools, training and information to help them serve their customers efficiently and effectively.
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MESSAGE FROM THE EXECUTIVE DIRECTOR
HOW TO AVOID BEING ‘UBERED’ SELF-DRIVING VEHICLES ARE ONE EXAMPLE OF TECHNOLOGY THAT WILL REQUIRE OUR INDUSTRY TO INNOVATE, ADAPT
AUTOMOTIVE OIL CHANGE ASSOCIATION
“We as an industry need to decide if we are going to compete by fighting technology advances for customer value, or collaborate and innovate to develop value for our customers.”
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Throughout this issue of LUBE+, you will find articles, ads and content designed to help operators in our industry serve their customers and run their businesses more efficiently and effectively. You’ll also find information about how AOCA can save members money. This is the value proposition of AOCA membership, and these benefits are backed by the collective strength of over 3,500 auto maintenance centers nationally.
this relate to our industry? Since Uber’s launch, several other companies in various industries have replicated its business model, a trend that has come to be referred to as “Uberization.” We see Uberization with examples such as: Apple iTunes and the music industry, Zillow and real estate, Pandora and the radio industry, PayPal versus credit card terminals, Amazon against every single industry. The list goes on!
It is AOCA’s mission to provide tangible benefits to serve our members, and we have made great strides in the last few years toward delivering on that mission. But what does the future hold?
Will Uberization happen in our industry? To answer this question, we need to look at emerging technologies, consumer buying habits and demographic shifts. We also need to ask ourselves, “Do we want to compete by fighting technology advances for customer value, or do we want to be collaborators and innovators that spend money on developing value for our customers?”
I recently attended a conference. and the title of the keynote presentation was, “What Is Your Uber?” Most of you probably know that Uber is a ride-sharing app that allows a consumer with a smartphone to submit a trip request, which the software program then automatically sends to the Uber driver nearest to the consumer, alerting the driver to the location of the customer. It’s a great service that I personally use regularly. I live in Chicago, and it is now my preferred mode of transportation. But before Uber, I simply used taxis. Uber, and other ride sharing services like it, may only be a few years old, but they’re having a disastrous effect on the taxi industry. Earlier this year, Yellow Cab, the largest taxi company in San Francisco, filed for bankruptcy. A spokesperson from Yellow Cab was quoted saying: “Ride-hailing services like Uber and Lyft are among the sources of Yellow Cab’s financial woes. The startups are attacking on all fronts … They offer less- expensive and more convenient rides and also attract Yellow Cab’s drivers.” Uber and other services like it are singlehandedly changing the taxi industry forever. So how does
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As I sat through this conference and began to ponder these questions, the presenter clicked to the next PowerPoint slide, which was selfdriven cars. He noted that this is one imminent technology that will have a ripple effect on many industries. Think about liability attorneys, medical care, city governments, car insurance companies, driving schools, etc. The introduction of selfdriving cars will significantly affect all of these industries, just as Uber did the taxi industry. And the ripple that caused me the greatest level of concern was the effect that self-driven cars could have on automotive maintenance centers. Interestingly, the Uberization of our industry could be a direct result of Uber itself. In February 2015, Uber announced a collaboration with Carnegie Mellon to establish the Uber Advanced Technologies Center, a new facility in Pittsburgh meant to support research in the development of self-driving vehicles.
AOCA EXECUTIVE DIRECTOR
Uber announced the first customer trial of autonomous taxis, which took place in August 2016 in Pittsburgh. The company now has a fleet of Ford Fusion cars each equipped with 20 cameras, seven lasers and GPS and radar equipment. These enable the car to create a three-dimensional map utilizing landmarks and other contextual information to keep track of its position. Google is using similar technology and has been in the process of road testing cars as well.
BWHITE@AOCA .ORG
self-driving technology becomes a catalyst to new ways of thinking about automotive services and partnerships to create new technologies. The industry as we know it will most certainly change one day, but as long as we continually adapt to stay relevant, Uberization won’t hit us like it did the taxi industry.
So, where we will be in the next 5-10 years? I honestly don’t know, but we as an industry need to decide if we are going to compete by fighting technology advances for customer value, or collaborate and innovate to develop value for our customers. Thinking optimistically, a probable scenario is that
W W W. AOCA .ORG
I think the most shocking part of the presentation for me was the fact that selfdriving cars are already here. This technology has been talked about for a number of years, but the assumption was that we were 10-15 years out from actual implementation. Actually, it’s realistic to assume we are only 5-10 years out. Our industry could be significantly affected by this technology within the next five years! The statistic presented was that the ratio is 14 to 1. That means for every 14 cars on the road currently, that number will be replaced by 1 once this self-driving technology is fully integrated with ride sharing. In a world where our success is largely dependent upon car count, this stat is disturbing.
Despite the current testing taking place, self-driving cars have not yet “arrived,” and they have some big hurdles to overcome. From a legal standpoint, the technology is ahead of the law in many areas. Most state laws presume to have a human being operating a vehicle. There are also needed advances in mapping, sensors and software before implementation is successful. But the biggest hurdle comes down to ethics. A driver could be put into a situation where he or she needs to decide whether to swerve right or left— either injuring three people in a truck or potentially killing a person on a motorcycle. Those types of ethical dilemmas would require the software in a self-driving car to weigh all the different outcomes and come to a final solution on its own.
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FALL 2016
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