Automobile homeowners are largely prone to go to dealerships for service through the first three years of auto possession, J.D. Energy reported in its 2020 Buyer Service Index survey. The survey discovered that 88% of shoppers go to sellers for service in these preliminary years. The worldwide insights firm reported in 2018 that 64% of customers wait on the dealership for his or her automobile to be serviced.

In 2020, although, that modified. Automobile homeowners now not wished to take a seat in dealership ready rooms as COVID gripped the nation. That meant a boon for firms that transported automobiles from place to put, and a big alternative for Social Auto Transport Inc., a gig economic system platform devoted to serving to companies relocate autos.

On Wednesday, Social Auto Transport secured a $1.5 million seed funding spherical to assist proceed constructing out that platform. The seed funding was led by Overline, an Atlanta-based seed-stage enterprise capital agency that focuses on startups within the Southeast. Different traders embrace Automotive Ventures, Estes Categorical Traces and Kevin Nolan, founding father of Nolan Transportation Group and OTR Capital. 

“We’re thrilled to associate with the Social Auto group. We see large alternative to construct a nationwide community for transferring automobiles brief distances with extremely skilled, licensed and insured gig economic system drivers,” mentioned Michael Cohn, managing associate of Overline. “With shopper curiosity in concierge service choices rising dramatically on account of COVID, we see at-home pickup and supply shortly transferring from a aggressive benefit for early-adopter sellers to a aggressive must-have.”

Social Auto Transport co-founders Nick Mottas, left, and Rob Newton. (Photograph: Social Auto Transport)

Social Auto co-founder and CEO Nick Mottas noticed a chance for the gig economic system enterprise whereas working in IT collectively.

Noting that the trade was reliant on truckers to maneuver autos, Mottas teamed up with Rob Newton, Social Auto’s CTO, to type the corporate. Each Newton and Mottas labored collectively at Estes Categorical Traces, the place the 2 met practically 10 years in the past.

Social Auto Transport was born in 2018 in Richmond, Virginia, working with Beta buyer Carlotz. Mottas mentioned he and Newton realized quite a bit about securing drivers, paying drivers and perfecting the enterprise mannequin. In March 2019, the product providing was additional refined. Social Auto Transport expanded to Charlotte, North Carolina, in February 2020, simply earlier than COVID shut down the economic system.

The timing in the end proved fortuitous for the way forward for the corporate. Social Auto Transport was in a position to onboard between 15 and 20 automobile sellers to the platform as customers all of the sudden shied away from sitting in a seller’s ready room for hours.

Together with the seed funding announcement, Social Auto additionally introduced its enlargement to Philadelphia, and Mottas instructed FreightWaves that expansions to 5 extra cities in 2021 are probably, led by Atlanta in late February and sure the northern Virginia space in late March. From there, Social Auto is taking a look at cities within the Midwest and West for extra enlargement.

“We wish to have the ability to present that we’re a nationwide firm [for a Series A funding round] and that we aspire to open up markets all throughout the nation,” Mottas mentioned.

Much like Uber (NYSE: UBER) or Lyft (NASDAQ: LYFT), the Social Auto Transport app leverages the gig economic system employee to assist transfer automobiles the place wanted. The corporate works with sellers and automobile resellers, offering a quick and simple solution to relocate autos, or within the case of the seller, to deliver a automobile in for service.

Sellers can use the Social Auto Transport portal to safe concierge service for his or her prospects, permitting a Social Auto driver to select up a buyer’s automobile and convey it to the dealership for service. (Photograph: Social Auto Transport)

In contrast to conventional automobile relocation providers that require groups to relocate autos, the Social Auto Transport group leverages a relationship with Lyft that permits it to maneuver a automobile to a brand new location with solely a single driver.

“We’ve a partnership and integration with Lyft, so when our drivers arrive, they swipe again … to rearrange a Lyft trip again to the subsequent pickup location,” Mottas defined. “All of that’s automated so the driving force doesn’t need to do something apart from get into the automobile we’ve summoned for them.”

Social Auto covers the Lyft value.

The corporate has a aim of getting a driver to a location with one hour and half-hour, however Mottas mentioned in 90% of the instances, a driver arrives inside 45 minutes. Sellers prepare for the Social Auto service and prospects obtain a textual content message with all the required info — together with particulars of the pickup, the driving force’s title and monitoring info in order that they know when their automobile arrives on the dealership.

Your complete course of is then repeated to return the automobile to the placement of alternative for the shopper.

Social Auto drivers are additionally required to {photograph} the automobile each earlier than pickup and after drop-off to make sure it was returned in correct situation. These photographs are offered to the automobile’s proprietor.

A lot of Social Auto Transport’s drivers additionally drive for Uber or Lyft. Mottas mentioned Social Auto fills a complementary possibility for these drivers, who usually see enterprise gradual through the center of the day, precisely when Social Auto’s enterprise picks up.

Sellers can profit from utilizing the service by improved customer support and probably elevated income. The J.D. Energy survey discovered that solely 26% of shoppers within the “mass market” phase of auto homeowners will return to the seller if they’ve to attend for elements. If automobile homeowners should not ready at a dealership for these elements to reach, this expertise is improved. Dealerships might also determine extra service points that want consideration. Asking a buyer to attend an extra two hours is typically not an possibility, however prospects usually tend to approve extra repairs if they don’t seem to be ready, Mottas famous.

Insurance coverage was a giant difficulty that Mottas and Newton needed to take care of as properly. The corporate is insured by James River Insurance coverage, a Richmond-based insurance coverage supplier. Social Auto pays for its insurance coverage by the mile, permitting it to maintain its prices down and in addition to know precisely what the insurance coverage value will probably be for every automobile transfer, which helps with clear pricing.

“They had been those that pioneered gig economic system insurance coverage with Uber again within the day, they usually simply occur to be in my hometown,” Mottas mentioned. “They’ve been in a position to insure us within the methods we have to be insured for us and our prospects.”

Gig economic system drivers, he mentioned, additionally just like the Social Auto Transport mannequin as a result of they’re paid for transferring a automobile however incur any of the prices similar to gas, insurance coverage and automobile put on and tear usually related to a gig economic system driving job.

Sellers within the firm’s providers can be taught extra right here. People inquisitive about working as a driver for Social Auto can apply right here.

Click on for extra FreightWaves articles by Brian Straight.

You may additionally like:

The FreightWaves Prime 10: Bankruptcies, capability considerations, protests and Trevor Milton’s departure

Maximizing trailer utilization: Why is it so arduous?

Trying again on the Yr of the Truck Driver