This is a blog post by Tracy Fred, vice president and general manager,  Xtime.  

With the SAAR dropping below 17 million in February for the second month in a row and tightening new and existing competition top of mind, the stakes are higher than ever for each dealer-customer interaction. Now accounting for 49 percent of dealership profits according to NADA research, fixed operations done right is vital to protecting a dealership’s bottom line and cultivating customer loyalty and retention.

According to the 2018 Cox Automotive Service Industry Study, 74 percent of customers who visited a dealership in the last 12 months for service are likely to return to purchase their next vehicle. However, a major challenge has surfaced. While customers are willing to drive 11 miles or more to purchase a car, most aren’t willing to drive that same distance to service their vehicle and list “not a convenient location” as a top reason for bypassing the dealership of purchase for service.

How can dealerships overcome this 11-mile barrier? It turns out the answer may be lying in plain site as an app on your smartphone.

Previous fears of ride-sharing services eating into dealership new car sales has turned into new opportunity for many dealers, especially in the service department. More dealers are starting to flip the script and incorporate ride-sharing into their fixed operations to save on costs and deliver a more flexible and convenient customer experience in an effort to improve one of the most profitable parts of their business.

Bringing new mobility solutions to fixed operations is critical to closing the distance gap between the consumer and dealer service department. Adapting these new solutions will be particularly important to win over the fastest growing generation of car buyers today — Millennials. In fact, the 2018 Cox Automotive Evolution of Mobility Study found that more than half of Millennials are using ride-hailing services.

Today, consumers have a plethora of ride-sharing resources, such as Lyft, a ride-sharing app that is offered in more than 300 U.S. cities and enables fare-splitting, carpool services and fair pricing during busy hours. Dealers need to lean into these cultural shifts and evolving preferences to maintain relevancy with consumers and deliver the ease and efficiency they’ve become accustomed to.

Incorporating ride-sharing services into the service department will help reduce customer wait times by enabling flexible, on-demand transportation to and from the dealership. Better yet, some integrations enable dealerships to let customers select ride-sharing as a transportation option during the service scheduling process. Not only can these integrations save dealerships money, as they no longer need to pay for a full-time shuttle service and affiliated costs, but they also increase customer satisfaction by creating a more accommodating and seamless experience.

Embracing technology and tapping into the next generation of car-buyers will enable dealers to sustain profits for years to come. As service continues to be a crucial revenue stream, dealerships need to close the distance gap to ensure they continue to be the preferred provider for vehicle maintenance and repair. By leveraging ride-sharing options, dealerships can stay ahead of the curve in the rapidly changing mobility landscape.