Nov 13, 2019
EP021 - CEO and Founder of Your Location Lubrication (YLL), Zach Zeller
Episode 21 is an interview with Zach Zeller, CEO and Founder of Your Location Lubrication (YLL); recorded on Thursday, November 7th, 2019. Scot and Zach discuss a variety of topics, including...
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The four pillars of Vehicle 2.0 are electrification, connectivity, autonomy, and changing ownership models. In the Vehicle 2.0 Podcast, we will look at the future of the auto industry through guest expert interviews, deep dives into specific topics, news coverage, and hot takes with instant analysis on what the latest breaking news means for today and in time to come.
This episode was produced and sound engineered by Jackson Balling, and hosted by Scot Wingo.
Scot: Welcome to the vehicle 2.0 Podcast. This is episode 21 and it's being recorded November 7th, 2019 welcome back to vehicle 2.0 listeners. We took a little bit of a fall break there on the podcast and are excited to be back with you here today. It's 50 we recently announced that we are merging with your location lubrication, also known as YLL. So we took this opportunity to have the CEO and founder Zack Zeller on the podcast. Zach has been working in the industry for over 10 years, so we're really excited to get his insights about the automotive industry and his experience. Welcome on the show, Zach.
Zach: Thanks Scot.
Scot: And I think this is your first podcast ever.
Zach: So it is.
Scot: So we're excited to land the big first interview here on vehicle 2.0 let's start off by you and I have had the opportunity to spend a lot of time together and I've got to hear your story, but listeners haven't. So tell us how you got into the automotive space.
Zach: Yeah, so, you know, I got into automotive, the mobile onsite oil change space by having a bad experience at a, at a brick and mortar business. So, you know, had to go get the oil changed, you know, trying to upsell and, and do all these services that I didn't think were necessary. You know, it was cold, snowy, and so, you know, after my experience, bad experience yeah, I needed to, the thought there had to be a better way to do oil changes, right. There had to be somebody that could come to my house and provide this service, you know, while I'm at, at that, at home or at work. And so I started looking around and this was about 10 years ago and couldn't find, couldn't find that service. So, you know, with some research and idea, I thought, you know, I'm, I'm going to go out there and do this myself.
Zach: So jumped on Craigslist, went out and bought an old 2000, two 40 Econoline van and it put some oil in it and filters and started going door to door and knocking on people's doors to, you know, offer this service. Quickly realized that doing it one at a time, I wasn't making any money. Right? It's pretty quick. So, you know, I determine that, you know, for, for, for a while L that you know, our opportunity was in, in the fleet business and where could I go to find large fleets? And that led me to Orlando, one of the largest rental car company locations in the U S so moved down to Orlando and start knocking on the door of the rental car companies. And that was kind of my first end. So, you know, start off by doing four, five, six, 10 oil changes a day. And you know, I could start seeing the opportunities there and seeing that there was at the airports, right. Large fleets, large concentration of cars. And that's kinda how I got started. So, you know, by, by doing the one and two a day to five to 10 a day to, you know, now we're doing, you know, several hundred a day at the, at large airport locations.
Scot: Yeah. Awesome. and then one of the things that's pretty interesting is, so first of all, congratulations. Most businesses don't make it like five years. You've made it 10 years. I'm very successful. That's awesome. One of the things that we got excited about is you guys can handle, you know, something like four to six oil changes somewhat simultaneously. Talk a little bit about, so you've developed some proprietary technology, we don't want to go too far into that, but you know, how did, how did you realize you needed to be able to do that? You know, that many oil changes simultaneously did to really capture the high volumes.
Zach: Yeah. So, you know, it started you know, I w the day I got a phone call that there was about 200 oil changes at, at the airport location there in Orlando. And I went out there by myself. It was just me and one van. And, and you know, I had thought I had developed a system that to work, to be able to handle that. And what I realized was about after 10 cars that the system I had developed couldn't handle high volume. You know, I mean it was good for the five, 10 cars and, and it just wasn't working right. So it was really that I, I realized that, you know, to service 200 cars to do it efficiently, to do it. So the rental car companies could put those cars back on rent that we need to develop a system that could be high volume, right. That that could do four, six, 10 cars an hour. You know, so those cars can get back on the road. And so that's where we, we started trying all these different systems. We went to different manufacturers and trying different ideas and you know, over the last 10 years, we think that we finally found the right system that allows us to, to do what we consider high volume oil changes.
Scot: Yeah, yeah. If you're doing 200 oil changes and it takes 30 minutes per, that's a hundred hours separate.
Zach: Right? Yeah. Just doesn't work. Yeah.
Scot: So there, you know, that's weeks and weeks of time, which, which doesn't work. Cool. So what locations are you guys in? So you started in Orlando and have expanded quite a bit. What are some of the locations where you're in now?
Zach: Yeah, so we start in Orlando and then you know, through, through word of mouth. You know, we expanded into Tampa. We went down to Miami, Fort Lauderdale, West Palm beach. So we kinda cornered the Florida markets, Fort Myers, and we worked our way up to Atlanta and then kind of out to out the West coast. So then we, San Francisco, Los Angeles, Seattle, Denver. So kind of the, the major, what we consider major airport locations is kind of what our target market's been.
Scot: Hmm. Okay. And then talk a little bit about, so you spend a lot of time with rental, large rental car fleets. How do they think about the life cycle? Like how often are they buying vehicles selling them and, and how, what does that life cycle like for those kinds of really large fleet owners?
Zach: So, you know, I think what we've learned in the businesses, you know, the rental car companies are in the business of buying and selling cars, right? And making money off those you know, they're, they're keeping them in fleet and renting them out to really for the depreciation. So they're an asset to the rental car companies, right? And so providing the service and maintaining the vehicles is in the best interest of them. Right? They want to maintain that value of that vehicle so they can turn around and sell for the most money. So what we found is, you know, they're going out there and they're, they're buying cars there, pain to maintain them. Right? And that's part of the, you know, it's part of the service we offered the preventive maintenance service, right? They want them to, first of all, they want him to be safe on the roads.
Zach: So, you know, they care about the tires, they care about making sure the cars are rentable and ready to go. And then, you know, again, trying to get the most value out of them at the end of their life cycle. And you know, they're only keeping them for six months a year, right? They're putting 30,000 miles on these cars. You know, and they've got a lot smarter people than me that can figure out, you know, the life cycle of these vehicles and, you know, when's the right time to send them to auction and when to sell them and, you know, so we're there to support them and to help maintain those vehicles to the highest standards.
Scot: Right. And then you started in preventative maintenance. And then if they go out and buy a bunch, you know, I think today you're actually dealing with a situation where they went out and bought a bunch and you have to help them on that and they and then when they get rid of them, do you guys do anything there?
Zach: So currently, no. Yeah, you know, we help them, you know, there's, there's times that they have an increase of business and they need to go out and buy cars quickly so they'll go out to the auction. Right. And the goal is to get those cars on the road as quickly as possible. So, you know, doing a safety inspection, and getting the oil changed and helping them there. But as far as, we haven't been able to get in that market of the D fleeting of the vehicles a lot of opportunity there.
Scot: Awesome. anything else kind of on the YLL history or, you know, so you've, you guys maybe give us, give us an idea of the scale of the company today.
Zach: Yeah. So, you know, 10 years ago, start off with, with one person, one van. And you know, now whileL he's just,just over a hundred employees, we've got just about 70 vehicles on the road. You know, and more in 12 cities.
Scot: So it depends on how you count cities. Yeah. Yeah. We get that a lot. Awesome. Well, we're really excited to, well, let's talk about you know, so you, so you approached us a while ago and talked about how do we combine forces with what was your thinking there?
Zach: Yeah. You know, I started to see spiffy and learn, learn a lot about what spiffy was trying to do. You know, what I saw is, you know, we've, we've got, you know, while Al had this niche, right, the high volume oil change at airport locations soft, spiffy, had a lot of other interesting, you know, you guys rolled out your fleet management of services, which is really what caught my eye of, you know, you guys saw the need of fleets from the beginning of the inflating through the whole cycle to the D fleeting. And that's really where I thought that there could be, you can see the benefit to the rental car companies, the one stop shop, right? And so instead of sort of, you know, spiffy and while L kinda going at it against each other and being the competition, let's, let's join forces and let's, let's be the, to be the leader in the industry for the entire life cycle, those vehicles for the fleets.
Scot: Awesome. Well, we're real excited here at spiffy to join forces with Weill L a we feel like this is going to be, you know, put jet fuel behind the fleet management as a service division. And my favorite part is we can kind of go through the numbers combined. We'll be in over 20 locations. Our goal is to get to 50, so we're almost at that halfway Mark now. So that's good. Well together we'll have over 200 vans out there with all the equipment to do the variety of services we offer. And then the high volume capabilities you have. And then, you know, driving and servicing the vehicles. We'll have together over 300 technicians that are trained. They're W2 technicians versus kind of random 10, 99 kinds of folks. So we, we share a vision in that. We, we, you know, to make the consumer or the B2B consumer customer happy, you really have to have a trained technician there.
Scot: It can't be just kind of a random consult contractor. And then I think together we're servicing about 1500 vehicles a day. So that's a little scary as a software guy to get my head around. But that's a, that's kind of a, a good size of the scale over 40,000 services a month. And for all the people that are excited about oil I did some math and I think we're we're changing over 50,000 gallons of oil every month is combined company. So if there's anyone in the oil industry on the podcast would love to work with you. Cool. So you know, the topic of the podcast is vehicle 2.0 where we talk about the cars are going to change more in the next 10 years than they have in the last 110 years since the introduction of the model T. And we use the, the vehicle 2.0 framework where we talk about the four big waves that are changing vehicles connected car changing ownership, Evie and AB. So, so you guys are really you're kind of, I would say in that ownership side. So you've, you've been deepened the rental car model for a very long time. So we can spend the bulk of our time there. And if you wanna talk about anything else, that's fine too. But do you see any interesting trends with the future of car ownership?
Zach: Yeah. You know, I mean if we're looking at car ownership and, you know, for the rental car companies, you know, we're seeing a lot more shared services. So, you know, riddled car companies are, are working with, you know, the big ride share services, you know, they're trying to try to get them to use their rental cars, provide, you know, new cars that are, you know, safer and, you know, provide a better experience for the riders. You know, we're also seeing a lot more the car shared, I guess when I say car shared services, but you know, commutes, the
Scot: Kind of pulling and yeah, those are all the areas one out there. Yeah.
Zach: Yeah. And we're seeing a lot more of that to where, you know, especially on the West coast, that's becoming a big part of the fleet business. You know, the Facebooks and Goggles and all that are trying to provide ways for their employees to get to work instead of bringing individual cars. Let's, let's start doing this car pooling and they're going to turn into the rental car companies task for the help. Yeah. So we've started to see that quite a bit.
Scot: Yeah. I was I was listening to one of the conference calls with the Hertz CEO. And they got a question from one analyst, which was essentially you, you would think the Uber's and lifts of the world would start eating into the rental car companies. I know I consciously, a lot of business trips all, all kind of just use ride sharing instead of renting a car if I'm only going to one or two locations. And they, it was interesting, they, they actually said they have lost kind of like 5%, but it's like they're real short kind of, you know, kind of half a day kind of rentals but actually lose money on those. So it's actually been okay to lose that because then what have been able to do to your point earlier about keeping the cars they're keeping the cars longer and they're using that, they're adding a little tail period of three or four months there where they're now running them into the rideshare networks and that's, that's actually increasing their profitability because they get rid of the less profitable stuff and now they're keeping the cars longer and they're, they're getting a little bit of a longer life cycle out of the vehicles.
Scot: So it's pretty interesting how it's to predict the unintended consequences of how some of these things will, will, will be impacted out there. I know a question I get a lot when we talk about you know, that we're doing preventative maintenance including oil changes is, and you know, I drive an electric car, so I get this question a lot is, you know, why, you know, why would you guys be investing in this oil change thing when electric cars are clearly going to be here tomorrow? What do you think about that?
Zach: Yeah. You know, it's funny cause you drive an electric car. And I owned one for a while too. And you know, I got the same question of you on an oil change company and you're driving an electric car. And you know, what we realized is, is, you know, [inaudible] our main objective is to make sure the cars on the road that are safe, right? And so electric car or you know, a gas powered car, you know, they still need preventative maintenance if that's, you know, tire rotations, brake checks, you know, down to windshield washer fluid, right? They still have fluids in them. The key fobs still needs batteries. You know, there's a lot more than just changing oil. And so, you know, I think that electric cars, there's still the opportunity there and you know, we're getting asked to, to provide preventative maintenance services.
Zach: You know, as the car industries are starting, you know, rental car companies are starting to purchase electric cars, right? I mean, we're, and we've seen it now for the last couple of years and you know, still providing those services. You know, we've, we've gotten calls of, you know, electric cars on the side of the road that are dead. Right. And can you guys go provide, you know, can you guys take a generator out there and try to figure out how to, you know, get these cars back on the road or, you know, maybe they're stuck in the bottom of a parking garage deck and they can't get a tow truck in there to get them out because they're dead. You know, so I, I think that they're, even though they don't have oil right there, still need preventative maintenance and I think the possibility for services is still there.
Scot: Yeah, absolutely. It's funny, we work with some auction clients and one of the auctions had a bunch of Teslas come through and they didn't realize that, you know, they lose a little bit of charge everyday. So they let them sit there for 30 days and then they got bricked and you know, they, they, they didn't have any charging infrastructure. So we got that same kind of a call, you know, do you guys have any capability to come charge 20 Tesla's tomorrow in five hours kind of a thing. We didn't at the point, but it's something we're, we're always thinking about how can we, Oh well, you know, when that happens, how can we be ready for it and provide those types of services as well. How about connected car? We do a fair amount of that here at 50 because of the consumer. Maybe you guys ever kind of run into connecting car.
Zach: Yeah. You know, I think it's something that we're starting to see. Yeah, I think that for the, the rental car companies, you know, having the ability to, you know, connect to the cars remotely, right? To track mileage, to track service history, things like, you know, you always a car check engine lights, right? Can the car give all that data, push that data, the rental car companies instead of, you know, physically having to go out there and pull that information from the car. I think it's going to be a game changer.
Scot: Yeah. It seems like they'd have enough pull though Em's that they would be able to ask for those kind of capabilities in a, in a fleet management kind of way.
Zach: Yeah. I think it's, I think it's common for, I mean, I think that's kind of the next, the next round.
Scot: Cool. And then the last one, and this one's kind of out there, is autonomy. Any, any thoughts around autonomous vehicles?
Zach: Yeah, I mean, I think it's coming, right? I mean, we're starting to see a lot more of it, a lot more testing, you know, with, with, I had a Tesla and, and you know, it was supposed to be, you know, I mean, getting towards the autonomy. Right. I mean, it always amazed me. And you, I think that as, as, as we get closer and closer to fully autonomous cars, you know, we we see LIDAR, right? And all the camera systems. And, you know, I, I think it's going to actually provide more of an opportunity for us to provide the, the proven preventative maintenance, right. Preventative maintenance to me is more than just an oil change, right. It's, it can be LIDAR, you know, calibration. It could be, you know, camera calibrations, you know, whatever that's gonna be, you know, I think that there's going to be the opportunity there.
Scot: Yeah. And the, you know, these autonomous cars are racking up because they don't have a human in there that gets tired. They're racking up a lot of miles. You one of the examples of autonomy it used to be that, you know, it's coming tomorrow and now that they've scaled it back, one of the things that they're doing in Europe that I think will happen here is certain interstates having kind of autonomous truck lanes where, you know, there's, there's a human that kind of gets you to that point and then that's Honami takes over with a human backup. And then so, so it gives like truck drivers more hours. They can drive essentially by, by having the autonomy there. And you guys do some commercial stuff as well, so I could see that being interesting there where you would, you would want a mobile capability instead of, you don't want the autonomous thing to have to kick in and, and you know, drive someone 10 miles out of their way to get a preventative maintenance. Yeah, absolutely. Yeah. Okay. Cool. Well, Zach, thanks for coming on the podcast. We're excited to be your first venue. Hopefully this is the start of a very long podcasting career. And we're real excited to combine both spiffy and while L and look forward to working with you and your new role as our senior vice president of fleet business development.
Zach: Yeah, thanks for having me. Appreciate it.