Using Lyft Instead of a Loaner Fleet
Just over a year ago, Scott Huggett met several fellow Phoenix-area service managers for dinner. Huggett eventually provided the night’s biggest tip.
“One guy at the table said, ‘Alright, Scotty, I’ve been getting applications from your shuttle drivers; what did you do?,’” recalls Huggett, the service director at Bell Road Toyota.
So, Huggett shared some valuable information with his peers at fellow Toyota dealerships: he had gotten rid of his facility’s 16-vehicle loaner fleet and started using Lyft to shuttle customers around. And, the service director had saved over $6,000 in the first month of using that ride-hailing company.
Less than a year later, three of Huggett’s colleagues had started using Lyft or Uber to cater to their customers.
“It’s the most fantastic thing, and it’s so easy to do,” Huggett says of partnering with a ride-hailing company. “Any time you’re trying to build net profit for your store, you have to look for unique, creative ways to build that, and this is one.”
Of course, there has been a time or two in which customers have objected to using Lyft. But Huggett stuck with his new strategy for shuttling customers, confident that it would continue to lighten his department’s financial load.
The Fleet’s Failures
Simple math explains why Bell Road Toyota began using Lyft in lieu of a loaner fleet. Huggett had crunched the numbers, and the bottom line suggested the need to subtract its loaner fleet. So, Huggett, a veteran of 30 years in the industry, discontinued his facility’s old Toyota Rent a Car Program (TRAC), started using Enterprise when necessary, and turned to Lyft frequently in April 2017.
At the same time, the facility got rid of its old shuttle vans.
“I started doing the math on it,” Huggett says, “and I was spending about $10,500–$11,000 when you include the vans, the gas, the phones, the insurance on the phones, the personnel expenses, along with all of that.
“And I started to figure out, ‘OK, if I do this many rides per day, times 26 days in a month, guess what? I’m going to save.’ By using Lyft, it costs me what, $10?
“And, my first month I saved like, $6,200.”
Another factor that made Lyft add up for Bell Road Toyota: While the dealership had a reputation for solid customer service, Huggett knew that its old shuttle driver setup had less-than-ideal elements.
“We were delivering customers all over, and people had to wait,” he says. “And, from a customer satisfaction standpoint, the fourth or fifth person in the van was kind of bummed out, because they had to wait to be dropped off.”
The Pluses of Partnership
A while back, Huggett grew weary of exorbitant expenses, like fuel, for shuttle vans. Lyft seemed like a logical solution.
“How do you get rid of those expenses? Well, you give them to somebody else,”he says. “By using Lyft, they’re using their phones, their cars, their gas, all that.”
Partnering with the ride-sharing company was surprisingly easy. First, a Lyft dealership representative was assigned to help Bell Road Toyota (at the time, Uber didn’t have such corporate assistance readily available, Huggett says).
Then, in short order, Huggett developed a process for calling upon the ride-sharing company’s services: Basically, each of the dealership’s advisors go online, log in to Lyft’s setup, and pull up a customer's information. Customers are promptly sent a message to their cell phone notifying that Bell Road Toyota has scheduled them a Lyft ride. A follow-up text message then explains that a Lyft driver is en route to pick up the customer, and the driver typically arrives in less than 10 minutes.
The dealership foots the bill for each Lyft ride, and the ride-hailing company bills the facility each month.
“When the Lyft driver responds and says, ‘We’ll be there in 4–7 minutes or whatever, they’re blown away,” Huggett notes of customers.
Huggett acknowledges that using a ride-hailing service might be difficult for dealerships in rural areas where companies like Lyft and Uber aren’t prevalent. Likewise, he admits that not all customers are tech-savvy enough to feel comfortable utilizing a ride-hailing company. And, he also recalls a few rare occasions where Lyft drivers cancelled, or the company’s site was down.
Still, he says Lyft’s positives far outweigh its negatives. For example, he says the Lyft drivers have reciprocated by taking their vehicles to his dealership for service, meaning he’s received additional service work from the partnership.
Another positive of partnering with a ride-hailing company: In Huggett’s experience, customers tend to agree to more repair work that’s suggested following inspections if they know they can quickly get to home or work to wait out the repair process.
The Bottom Line
Over a year into his experience with Lyft, Huggett couldn’t be happier.
“If you’re looking at $450 per month on a loaner car that you charge,” he notes, “that’s $7,200 per month of rental vehicles that I no longer have to expense. … Lyft was a great alternative.”
Since dropping its loaner fleet program, Bell Road Toyota’s sterling CSI score has improved a few points, rising to 93.01.
Every once in a while, another industry colleague will seek Huggett’s advice about utilizing ride-hailing services at dealerships. And he has no qualms about offering tips, such as requesting that your facility’s IT employees ensure that your building’s Internet doesn’t block ride-hailing companies’ websites.
Huggett would like to expand his partnership with Lyft, if possible.
“You know what I asked them recently?” he says. “If they would pick up parts. I think they’re contemplating it; they’re looking for avenues to make money, and that would be easy.”