“The best way to predict your future is to create it” – Abraham Lincoln
Honest Abe knew a lot about life, but he didn’t know anything about cars. They wouldn’t be invented until 30 years after he had a rough night in Ford’s Theater. Luckily for you, there is a little company bringing some “honest” into an industry that has spent far too long in the shadows.
How are we going to do this might you ask? One word: crowdsourcing — one of the most ubiquitous terms in the recent business lexicon.
What is crowdsourcing?
Crowdsourcing Week defines it is as: “the practice of engaging a ‘crowd’ or group for a common goal — often innovation, problem solving, or efficiency. It is powered by new technologies, social media and web 2.0.”
In the past several years, we have seen how the practice of crowdsourcing has been able to raise huge sums of money, transform entire industries and diversify supply chains. At its heart, crowdsourcing is upending the complicated processes previously completed by only a handful of people selected to represent huge bases of customers. It’s taking what used to be done in smoke filled rooms and giving ideas and concepts room to breathe.
We’re taking a look at the automotive industry, one of the pillars of the modern industrial economy, and explore how all attempts to affect it through “New Economy” efforts have failed — until now.
Let take a quick look at the mechanics of the auto industry…
Literally deemed too big to fail — and rightfully so — the United States manufactured $69.9 billion dollars worth of vehicles and parts in 2015. So where does this money go?
When you buy a car, you are buying it from a dealer, who bought it from a manufacturer. The manufacturer takes that money and buys the raw materials to make more cars, pays people to put them together, and does a huge amount of R and D to make cars better than their competition. This is the status quo for the industry; the wheel of progress turns and newer, safer, more efficient, and sustainable products are introduced to the marketplace. Overall, they meet the needs of the buyers better than the makes and models of last year.
Dealerships, however, are a different story. When you buy a car from a dealer, they get the money, and pay a dealers association, the ownership, and their staff. How dealerships make money from you is a long and complicated process, but the major fact is: they really don’t make that much money from new car sales (stay tuned for a blog post on this in the future). The real areas where dealerships make money ares in the financing of new and used cars, undervaluing trade ins, then turning them around for a reasonable profit. In addition, they usually markup the cost of parts and labor, while underpaying the people doing the repairs (more on this later as well).
So basically, the automotive industry is a multi-billion dollar industry that has completely defined generations and made the American Economy the benchmark of the world for decades. You really don’t want to go toe to toe with these guys. The start up costs are huge, the price of labor is ridiculous, the research and development costs billions and is done mostly in house, and the competition is intense…but the payoffs are massive. Not a very good situation for the “new economy”, which emphasises personal service, growth, and utilizing what you have to make money.
Crowdsourcing & The New Economy
So, what exactly is “the new economy”, and what does it have to do with crowdsourcing? To be totally fair, this term actually isn’t that new. It entered popular lexicon in 1983, via a Time magazine cover article, “The New Economy”, describing the transition from heavy industry — the manufacturing of industrial goods — to a new, technology-based economy.
The New Economy is significantly more segmented than the “old” economy. Think of it like in the days of yesteryear, where there were only a few genres of music, such as Rock and Roll, Pop and Jazz. Much like in music, the economy creates consumer shifts, and emerging technologies bring about the rise of different subsets of each element. For example, in the past, when you said “I like Rock and Roll” you were referring to bands like the Animals and the Rolling Stones. Now, if you say Rock and Roll, you may be referring to many different segments, including:
- Soft Rock
- Hard Rock
- Prog Rock
- Alt Rock
- Heavy Metal
- Speed Metal
- Hair Metal
…and what seems like a million other subsets.
Likewise, The New Economy refers to a number of business types such as:
- Online retailers such as Amazon, Ebay, Chegg, or RockAuto
- Crowdfunding websites such as Go Fund Me, Kickstarter or Indiegogo
- Mass customization & design-your-own web sites for sneakers, clothing, business cards, and a multitude of other things.
- Social media platforms such as Facebook, Instagram, Twitter, Linkedin, Tumblr or Pinterest
- Real-time ridesharing companies like Lyft, Uber, or peer-to-peer renting of property like Airbnb
- Online media companies, like Netflix or Amazon Prime
- Online dating services
- Online advertising from free classifieds like craigslist.org to paid-placement like Google AdWords
Supply in the New Economy can be as liquid as cash in a bank account, to something as immense and complicated as an Amazon fulfillment center. However, it has expanded to cover any other solid asset that people might need, from homes to cars to bikes and gardens.
How does this relate to crowdsourcing?
Crowdsourcing and its many factions are a direct result of the New Economy. This concept has contributed to the rise of microbusinesses — i.e. if you own a car that fits certain specs, you can be a taxi driver (Uber & Lyft); if your house fits certain parameters, you can be a hotel magnate (AirBnb). These companies allow individual owner/operators to run a business with little to no experience, and to achieve success because they are utilizing the right technology to market their assets.
Crowdsourcing Services vs. Crowdsourcing Assets
Okay so, what if you don’t want random people staying in your house or riding in your car? What if you have a valuable skill? This is where you put the crowdsourcing economy to work for you, and become your own boss, or drastically expand your business and existing client base.
Efforts to do this have been met with mixed results. Companies such as Angie’s List have had some success, however the subscription nature limited their overall reach socioeconomically. Recently, this company has gone to a per-diem basis for consumers, which has helped expand their footprint. Typically, crowdsourcing is most valuable to people on the lower ends of the socioeconomic spectrum, and the original model for Angie’s List didn’t really work for that. Not a lot of lower income folks are looking for plumbers to remodel their bathroom. Another disadvantage to this system is you could find a service provider that you like, but they could be booked several months in advance. So that effectively eliminates a necessary element for success: Speed.
Other companies such as Thumbtack offer a wider ranges of services, and have it on a supply-side mechanism. Individual service providers look at the postings and choose to contact the individuals whose jobs they want to do. This is a much more comprehensive way of doing it, and it falls to the individual who is receiving the service to choose who they want to fulfill it based on availability, skill, and price.
Crowdsourcing and the Future of Auto Repair
Now back to the matter at hand. How do you introduce the idea of crowdsourcing to an expensive, monolithic, big-name industry that spends more money on lobbying, advertising, and R&D than many countries GDP’s?
Well, crowdsourcing the production of a car is a really, really bad idea. The people who make and design cars are experts, with decades of experience in the fields of engineering, manufacturing, advertising, electronics, and the list goes on and on. We’re not saying that it wouldn’t be possible, but it would be very expensive. Also, it takes a car model a long time to go from design, to production, to manufacturing, to being sold. Even then, when a company designs and builds a car, sometimes they can’t sell the car.
So, if the production of a car shouldn’t be crowdsourced, the next logical step is to make it easier and cheaper to get your vehicles repaired. Gone are the days of auto repairs being a simple task anyone can do in their driveway on a Saturday afternoon. In most cases, repairing a car is a highly technical process, and can only be performed by an experienced technician. More often than not, these technicians are working through a dealership, where the prices for labor are fixed to maintain an even keel for all parties that pay into a dealers association. In addition, there is often a markup on parts, which is passed onto the customer.
The number of people that can provide these services is dropping, as people are choosing 4 year institutions and white collar work over blue collar trades. The amount of cars on the road is staying the same, and in many instances it is increasing with economic growth, but the amount of people who can fix them is dropping, and their pay is not being subject to the same laws of supply and demand that the market creates.
Not Crowdsourcing, but Tech Sourcing
Surfwrench is a growing company that recruits individual technicians and independent shops to bid on fixing the car problems of individuals across the United States. Currently operating in the Northeast, Surfwrench is working to provide the benefits of crowdsourcing in an effort to make car repair easier, faster, and less expensive.
Unlike other crowdsourcing apps, the individuals providing services through Surfwrench are not just random people who can hold a wrench and tighten a lug nut. Technicians working with our company have years of training, thousands of hours of hands-on experience, and tens of thousands of dollars worth of brand specific tools, insurance, and infrastructure. When you use Surfwrench, you’re not working with just another member of the crowd. They are a specialist. Better yet, with Surfwrench, you’re not assigned a tech to work on your car. You make the choice of which tech you want to work on your car based on their education, experience, cost of the job, estimated repair time, and prior customer feedback.
For this reason, we like to say we provide “Tech Sourcing” services. We connect customers with the techs who have the skills and desire to fix their car. More often than not, they are working in the dealer that you would have gone to anyway. These are individuals that you can trust to do the job right, because if they mess it up, they don’t have the dealership to hide behind. When a Surfwrench Technician messes up your car — they fix it. If they don’t, our system provides you with the opportunity to anonymously leave a review for your technician. This not only helps keeps techs honest, it allows you to help future customers find the best technicians to fix their vehicles. With Surfwrench, the market decides who is and isn’t going to work on cars based on the feedback from our previous customers.
Tech Sourcing: Saving You on Labor & Parts
Why do Surfwrench Technicians want to get jobs through us? When you have an incredibly specific set of skills, you can work in a specific segment of the market. In some cases, technicians are trapped by what the dealership is going to pay them. Often times they have to move across the country for higher pay rates, as local ones are tied down by these dealers associations. With Surfwrench, they can give themselves a massive raise. The beauty of this is that they can give themselves raises of up to 500%, while reducing the price of labor and saving you money on the repair.
In addition, working with one of our independent shops or technicians can help you save on the price of parts. With Surfwrench, you can find a technician, have them diagnose your problem, tell you the parts you need, and you can go out and get them. Or your technician can get them for you. Either way, this saves you even more money. Price markups at dealerships and chain shops can be up to 1200%. We know, we have seen it.
Surfwrench was created by a former dealership technician. Moreover, the majority of technicians that work on Surfwrench are or were dealership technicians, with factory training. This means that they learned how to fix them from the guys that built them. So you’re getting the same expert service, but at a fraction of the price. This allows you to spend money in other places.
Honest, Transparent Savings
We know that car repair is expensive, so we don’t take a percentage of the repair bill for access to our technicians. We charge everyone involved a flat rate for the information that is going to get their car fixed and save them money. In reality, we make the money for our company in the advertising for complementary goods — parts, towing, used cars, new cars, ride sharing, insurance — all of which are an important part of the repair process. , which i as previously stated, is a huge amount of money. We charge a flat rate because we know that charging a percentage of the labor would be “meet the new boss, same as the old boss” for our technicians. That is the inherent advantage of crowdsourcing- our technicians want to work on your cars, because neither of you are getting ripped off like you would be by going through the normal mediums. Also, because our system is so reliant on feedback from customers, we refund half of the flat rate for using our method when you provide feedback on the other party.
At the heart of crowdsourcing is the inherent idea that people are trustworthy: That this Uber Driver isn’t going to drive me off a cliff, that this AirBnb operator isn’t H.H. Holmes. We understand that traditionally, the automotive industry is perceived as a smoke filled room full of people who want to rip you off: but your blame is in the wrong place.
It’s not the people building the cars, and it’s not the people fixing the cars. It’s the people who are getting in the way of that being a streamlined process. Sometimes it can be service writers who are prescribing unnecessary work. Sometimes it is management who is setting up quotas for this unnecessary work. Everyone else in this process makes money either from their industry, or their service. Instead, the problem is the people who are fixing the price of labor. Surfwrench is one element of the solution, and as it grows more and more people are going to take advantage on the mechanism of crowdsourcing to get their cars fixed: and in so doing, fix one of the major problems in the current economy.