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There are four waves of innovation sweeping through the automotive industry that will disrupt vehicles more in the next 10 years than they've changed in the last 100.

Each week, we explore connected cars, electrification, changing ownership models, and autonomous self-driving vehicles, as we seek to understand and prepare you for the future of transportation.

Apr 17, 2019

EP007 - Executive Editor at Bobit Business Media, Chris Brown

http://www.vehicle2.getspiffy.com

Episode 7 is an interview with Chris Brown, Executive Editor at Bobit Business Media; recorded on Friday, April 5th, 2019. Chris and Scot discuss a variety of topics, including:

  • Chris’ journey to being the editor of three publications and producer of two tradeshows.
  • The impact of car and ridesharing on the car rental industry.
  • Weighing the changing ownership models for an idea of potential winners with consumers.
  • How electric and autonomous vehicles will affect car rentals and auctions alike.
  • What the future holds for the existing dealership and OEM framework.
  • The road for convenient in-app connectivity to simplify the car rental process.

Be sure to follow Chris on Twitter and LinkedIn!

If you enjoyed this episode, please write us a review on iTunes!

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.

 

Transcript:

 

Scot:

[00:51] Welcome to the Vehicle 2.0 Podcast! This is episode seven and it's being recorded Friday, April 5th, 2019. Welcome back, Vehicle 2.0 listeners! As I've been personally learning all I can about the changing ownership models for cars and how the real car industry works, I found the content from auto rental news to be really important and awesome. My favorite items are the blog posts from the executive editor, Chris Brown, who we're excited to have on the show. Auto rental news is owned by Bobit Bbusiness Media and they have over 20 publications and trade shows that cover fleets, rentals, dealers, and oddly enough salons. Chris Brown is executive editor of business fleet, auto rental news and fleet forward and he also produces the international car rental show and the fleet forward conference. Chris, welcome to the show.

Chris:

[01:46] Thanks for having me Scott.

Scot:

[01:48] With all those responsibilities that you must be extremely busy, so we really appreciate you taking time to talk to us about your view of the future of your vehicles.

Chris:

[01:59] Sure. Well, my position kind of affords me having my fingers in a whole bunch of different pies and where transportation is going and yeah, we're just a little busy over here.

Scot:

[02:11] I have to ask what's the intersection? Was Salons, I was super curious about that.

Chris:

[02:15] You know, it, it's basically was a diversification strategy. In typical B2B media company fashion, not our eggs are in the transportation basket. And two of our biggest magazines in the company are a modern salon and nails magazine.

Scot:

[02:35] Cool. You get to, you get to learn all about, if you get burned out on cars, you can go learn about a whole other topic.

Chris:

[02:41] There's plenty of nail polish around for us to take advantage of.

Scot:

[02:47] Cool. I definitely want to jump into, you've, you got a lot of really good views on where we're going in the car industry, but before we jump into that, would love to give listeners a little bit of background on how you got to where you are?

Chris:

[02:59] Sure. Well I joined Bobit over 15 years ago, jumped in as the editor of Business Fleet magazine, which is goes out to small commercial fleets. soon after that, I took control editorially of auto rental news and, between the intersection of auto world news and business fleet can kind of triangulate what's going on and different parts of the transportation space. And along with the auto world news comes, you know, managing the international car rental show, which is convening and a week and a half. So that's been a huge part of what I do. And then, as well, we're really getting into how fleets are looking at new mobility solutions and, we have the fleet forward conference in that regard. That's happening in November in San Jose and we will be launching a brand, a website fleetforward.com in May.

Scot:

[04:08] Oh Wow. I look forward to seeing what you, what you guys put on there. Yeah. So, so to give listeners an idea of kind of the, the scope of, of your reach there, how many readers, and if there's anything you don't feel comfortable sharing, obviously that's, that's fine. But, you know, how many readers do you guys have on the publications and how many folks come to the conferences?

Chris:

[04:29] Well, you know, the, the best way to look at Bobit that is that we're the largest fleet publisher and authority and have been for over 50 years. Perhaps in the world actually. We reached over 250,000 commercial and government fleets and small business fleets and work trucks and heavy duty trucks. Heavy duty trucking being, our, our largest publication. And the whole universe, ends up to be 18 million vehicles. And, you know, in typical B2B fashion, we do that through news industry trends, market intelligence, you know, events, great articles and you know, the car rental show is you only show specific to the the auto rental industry in its entirety. And we'll get over 800 people this year, in April, April 14th through 16th in Vegas. And we draw folks from all over the world. Fleet forward is really just kind of a baby right now. We'll get 200 plus in its second year, come, come November in San Jose. And that's really a for the forward looking fleets that is commercial and government fleets that are looking at, you know, new mobility solutions to implement their fleets.

Scot:

[05:47] Very cool. So definitely encourage listeners to check those out. I know a full disclosure, we're going to be exhibiting at the show next week, so we're excited to be first time at that.

Chris:

[05:58] Yeah, well we're attendance is looking great. There's a ton of energy. I'm really glad that we've kind of both a really a great show for for 2019.

Scot:

[06:08] Awesome. So thanks for the background. I think that really helps set the stage for the main discussion. and a here on the podcast we look at a framework that we call vehicle 2.0 where we look at kind of these four ways of innovation that are kind of sloshing through the industry, connectivity, new ownership models, electrification and automation. and you've written a lot of really great content lately around the changing ownership models and I know that's near and dear to your heart. we'd love to start there. so when we look at the rental car industry, when I talked to folks I spend a lot of time talking to venture capitalists and stuff. I think they have this intuition that rental cars would be down like 10, 20, 30%, but they're actually up. why do you think that is? People assume it's down because they think Uber and Lyft are taking pretty serious share from the rental car companies. but apparently, you know, is that happening and why are the rental car sales up?

Chris:

[07:05] Well, I think we have to look at the market and say that Uber and Lyft have definitely taken a bite out of the rental car market, but, it's mostly in certain certain areas that we'll talk about. And, and also, it certain rental lengths, the shorter rental lengths, like the one day rentals is more where it's affected. and those are the least profitable, rentals as you can imagine, just because you have to turn over a car for a one day rental like you do for a five day rental and all the attendant costs there. You know, urban markets have certainly been affected, as well. That being said, I mean we did see, a strong demand that led to a record year for car rental, last year in the USeclipsing 30 billion in total revenues. And that was done on a overall fleet size.

Chris:

[08:10] That is, means that there was more revenue per unit, which is a really good sign for rental to, you know, I mean the, the, the more traditional rentals of, you know, multiple people have family, you know, needing, needing access to, you know, places that are more than 40 miles away, and, and of triplink's that are greater than a day is still very real and still very growing. It's growing with a good economy. So, I think that's really what's keeping the rental industry afloat in terms of the demand side. Now let me add one more thing. certainly, where, you know, if you can't beat them, join them. there is an insatiable need for Uber and Lyft drivers to have reliable transportation and rental has been playing a part there in, in renting cars to Uber and Lyft drivers. and that's, it's a growing segment as well.

Scot:

[09:17] Interesting. Do you know, do you happen to know, so 30 billion is pretty impressive. Do you know the year over year growth rate of that is kind of like GDP and that three to 4% range or is it kind of different?

Chris:

[09:28] So the growth rate, I know that the growth rate is accelerated, believe it or not, over the growth rate from 2017 to 16 and 2017 to 2018 so that's healthy. In other words, I had sort of intuitively a expected a growth rate to, to shrink there and you know, I do know it at what, what percentage? I don't know off the top of my head, but I do know that that was a slight acceleration over previous years. Recently.

Scot:

[10:02] Yeah. Accelerating growth and improved, unit profits is kind of the, that's the sweet spot. So that's good for the industry. Yeah, it certainly is. Cool. So, appreciate your perspective on that. And if we kind of go to the 30,000 foot view around ownership, do you have a point of view where you think ownership around vehicles is going to go in the next five to 10 years?

Chris:

[10:23] Well, really it's, it's really a tale of environments, I think. I mean, you look at major cities compared to suburban, rural ex urban environments. And you know, it's no secret that the changes are coming in in cities a lot quicker. you know, every major us city is having these conversations right now around smart transportation planning. And I think this is really kind of accelerating the change in cities in 10 years from now, in suburban environments. and certainly rural environments. I don't see really much change in terms of ownership. Yeah. We could talk perhaps a growth of a subscription model that, that may change in those areas, but I don't see people giving up their cars. although I do see, I was actually surprised that some reports that have said that car ownership and cities in particular, haven't changed as much as we thought in terms of asset light households, certain in certain cities it has in others like Los Angeles, it really hasn't, not yet.

Scot:

[11:44] Interesting. So if we, if we peel the onion on that, there's all these different flavors of, of some of these new ownership models. There's you kind of mentioned subscription, there's obviously rental. there's the car shares where you have like Zipcar and then, we had a guest on the show that talked about an ungated car share where, you know, you can kind of pick it up and drop it off wherever we've got the Lyft Uber ride sharing. We've got kind of the Airbnb model, like person to person like Toro and get around. Do you think there's kind of a winner in there or do you think it's going to be, you know, a mix of those kind of based on what people want to do and, and the length of rental for example?

Chris:

[12:23] Well, I think we are moving into a mode or a way of thinking where use the acid that's best suited for that type of exactly what you want to do with it. And, I mean, I can see benefits and issues with each one of those models. I mean, we can really look at what's going on in each one. And, I mean, I, I, I, I don't think that we've seen the, end of penetration for ride sharing. I think that is still going to grow. I think that P2P car sharing is on a definite growth curve. I think in terms of, the, the Zipcar model of car sharing it, I would probably say that we're not seeing quite as much of an acceleration and those in the car sharing community would really point to, you know, an ungated, model as being, better for, or easier to access to vehicles and you know, car subscription has issues as well. And one of the main issues is, is coming up with a price point that that works for everyone. And also, how soon you can flip the cars, you know, if you want to get in a car rental, we can certainly get into that too. But I really see there's a lot of growth still happening in ride share, in peer to peer.

Scot:

[13:59] Yeah. And the rental car companies are, are pretty active in all these spaces. Maybe. I'm, I think I have a pretty good handle on it because I've been reading a lot of your content, but maybe for listeners, highlight what hertz and Avis have done kind of around the areas of, you know, or what we know them for their traditional rental car, but they're all very active in some of these other models.

Chris:

[14:21] Well, certainly Avis. but Zipcar, gosh, must be nine years ago at this point. And that's really where the sort of, we'll call it traditional car share has a hold. you know, Hertz, the funny thing about car sharing and the rental traditional rental companies, the large rental companies, they're sort of pulled back. I mean, enterprise car share still exists on college campuses. A in Zipcar is, it's growing incrementally and Avis is growing in incrementally. Works, has pulled back essentially from car share divisions. Let's say if you want to talk Europe, a Europe cars, doing some, some cool things with mobility. and six test, some mobility programs to, you know, one other thing to mention with car sharing and that is should it or real growth potential for car sharing is gated. I mean, I, well let me back up there. a real growth potential for car sharing is in specific programs that would be offered, say as an amenity in, various properties, you know, on various corporate campuses or in, in, residential buildings. that is, that is a growth area, but car rental per se is, you know, zipcars where it's at, in terms of the majors in the u s

Scot:

[15:58] Cool. And then, I think some of the programs, some of the big guys, they, they have relationships with like the Ubers and Lyfts, right? Where they're, they're providing cars into the ride sharing market. that works.

Chris:

[16:11] Hertz in particular is playing a really big part in this market right now. I mean, their growth in that market is, has been substantial year of year. I think they've got 40,000 cars that they're putting into, into the ride share market. And, I know it's driven a 300 million to their, and this is public figures, 300 million to their bottom line revenue and they expect to grow it even further. And you know, we started with trying to understand what the model is to rent to Uber and Lyft drivers. Like what is that, what is a model that is profitable? And I think the market has come to the conclusion that it's not a new car, to rent to these guys. It, it's, I say it's not for the faint of heart because it's high mileage. you know, a lot of scrapes and dings on these cars, but you know, where it really works, at least where it really works for her is you get out of a Toyota Camry at 40,000 miles in the rental fleet and that's flipped to the Uber drivers for 30,000 miles. And then they, they take those cars out at 70,000 miles, hurts does, and they can run them through auctions or even run them through their, their used car lots. And that's a very attractive price point for used car buyer. So they've had success with that and they're kind of leading the charge there.

Scot:

[17:47] Cool. Is it like formal partnership with Uber or they just kind of advertised Uber drivers on their own?

Chris:

[17:54] I believe it's a formal, I mean they do have, you know, I, I, I, I don't know the answer to that question definitively to be honest with you. I want to say, and you know, probably in the editing we can figure this out, but I want to say that they do have an, at least an informal agreement, but they do, I know they definitely rent to both Uber and Lyft drivers.

Scot:

[18:19] Got It. Very cool. So it, one argument, you know, with Lyft going public, this is top of mind because their valuation is so high. It's kind of interesting. You could almost like, you know, invest in some of the rental car companies and as kind of a secondary, you know, if you'd believe in car riding as a cheaper way to almost invest in the trends, oddly enough, I don't, I don't think people connect those two things. But it's interesting to think about that.

Chris:

[18:39] Well, the whole idea of providing wheels to Uber and Lyft drivers has become one of the biggest industry trends and challenges. And Uber certainly saw this challenge with their leasing division that they essentially failed miserably at and lost a lot of money, it per car, an astounding amount per vehicle before they shuttered the their program and sold that off, which really speaks to the core competency of fleet managers of, of basically how to manage an asset. And I think the world is kind of waking up to, how fleet can do that and, and also how it can leverage this advantage and the, the, these environments moving forward on their way to autonomy.

Scot:

[19:31] Very cool. one thing that's near and dear to our heart at spiffy that when everyone gets excited about all these new ownership models, but what they forget about is more, more drivers, more riders, more miles means more services. and I know you've written a fair amount about this kind of fleet management as a service, which is, , you know, Kudos on a cool name there. were, where do you think that's going? It seems like the rental car companies have, they're kind of coming into it. it seems like the dealers may want to come into it and it feels like there's this collision course with a lot of different players, you know, so for example, Cox has an initiative to do this. so who's going to own this fleet management aspect of things?

Chris:

[20:16] Yeah. And you know, I'll, I'll go ahead and just take credit for f Mohs right now. I mean, I know, , you know, we had all had Sarah from Avis budget, at our fleet forward conference talking about fleet management as a service. But, but you, you know, it's, it's a budding, discipline, whatever you want to call it, but it is under the heading of, as assets get utilized more than 5% percent. They're going to have to be serviced in ways that are mobile and, you know, around the clock. And that's why, you know, we've seen spiffy and some really cool new outfits coming in that, you know, also perhaps lead us down this path to autonomy. when, you know, autonomous vehicles are going to have to be serviced at some point at night. Car rental really does see a future here as a service provider.

Chris:

[21:22] And you know, let's make sure, you know, this is separate from being the, the, the, the provider of the service of the vehicle to the end user, but more of the back end servicing of the vehicle. they, they will have competition from the fleet management companies, which are really kind of unknown or the consumers. But fleet management companies know how to, they know depreciation, they know how to manage vehicles, for commercial fleets equally as well as car rental companies. So I see, potential, you know, a potential, a little war here happening about who's going to win there. And then of course, like you said, I mean, you know, Cox Automotive owns Manheim, the largest auction in the US and, and if there's another area of disruption, it's going to be a auctions and, Cox certainly knows how to service vehicles and they're looking to leverage that position and in their fleet management of vehicles as well.

Scot:

[22:33] Cool. so let's pull on that thread a little bit. Why you think so auctions will be disrupted because you think they go online or you think just less cars we're going to turn over in this, this new world or why, why will they get disruptive?

Chris:

[22:46] Yeah, so, you know, the car rental companies right now are making no bones about the fact that they want to sell those vehicles upstream, directs whether it's direct to the consumer directed dealers and, they're enjoying better margins by doing that, and are willing to put together the effort, in terms of the infrastructure. So that's, that's happening now. The auction market is really needing the, the, the, the movement that time to sale is critical. You know, because a car depreciates, you can look at it at a daily depreciation of a car and it takes time to move a car to auction, run it through the auction at a certain day, get it to the end user and be done with it and get paid. auctions know this and they've certainly, they have their hand in, in online auctions, virtual auctions too.

Chris:

[23:51] So, but there are also diversifying. Now if we look at a world that is autonomous world, well that world looks a lot different and it looks a lot different for everyone, obviously including auctions. we expect much fewer vehicles, you know, potential, hopefully more, more, less vehicles on the road than there are today. And, and hopefully there, there'll be shared, but those vehicles, they're not going to get in accidents. I mean, that's the idea. And their, their length of service, they're going to be electric vehicles. Generally. Their length of service is going to be three times as long and with, with cars not turning over as much, that's just a lot less cars through auction lanes. Interesting.

Scot:

[24:43] Cool. so that's been good to get your view on ownership. Let's, let's kind of move into the connectivity side of things. I always come at it from a consumer perspective where there's all this cool stuff. I'm I'm a Tesla driver, so you know, being connected gives me real time maps and traffic and streaming and a lot of things in the cabin for the consumer. but you've done a lot of really interesting, riding around how rental cars are going to leverage the rental car companies are going to leverage connectivity. What are you seeing there?

Chris:

[25:13] Yeah, sure. And that's a huge area of driving efficiencies for a rental car. Companies and commercial fleets have been enjoying the benefits of telematics. that, penetration is, has come sooner for commercial fleets and it has for rental. One of the issues for rental has been, you know, the rental vehicle is turned over a lot quicker. And at this point we are still most, of what this play is right now is telematics and it's an aftermarket install. Oh, of course. That's changing. we're, we're moving into a OEM partnerships with telematics companies at the factories that make this a lot easier and hopefully, and in three years, maybe it'll be standardized, where all we're doing is, is pulling data off cars and we won't need to install black boxes anywhere in the car and we can pull this data off of, vehicles no matter what the manufacturer.

Chris:

[26:23] Now, in terms of the, the benefits of connectivity, at least for a rental companies, simple fleet management, fleet movement, understanding that your a rental vehicle has been impounded for some reason you can't get of the renter if you can get notification at that vehicle is found in an impound yard by locating it, using gps tracking. If you save a day on that, I mean that, that's times how many days of rental vehicles you find an important yards. That's a very tangible example, but just fleet movements in general, you can inform heat maps in terms of, so where am I, where are these rental renters going in aggregate? You know, it turns out that most of them are, are, are going to the shore. in October, we'll, gosh, what's that all about? You know, and these, these answers may not be quite apparent as well.

Chris:

[27:26] There's a festival there, but these, these micro movements and even even looking at, the ability of a rental company to know that the renter who's supposed to have the vehicle backed by five is nowhere near the rental office. So that vehicle won't be available to next renter. They can make arrangements right away at either put that the next renter and another vehicle or make sure another rental office can transfer a vehicle. So those are just some of the efficiencies, but you know, telemetry in the car is going to be big. you know, right now I'm measuring fuel is a thorn in the side of rental companies, but now being able to measure fuel precisely would allow, the rental company to, you know, charge a renter for the exact amount of fuel that's that they don't have in the tank from when they started the rental and, and possibly have an upcharge on it.

Chris:

[28:27] as a convenience. I mean, that's going to be a big one. And then we also have to look at, you know, geo located push notifications around, marketing opportunities. I mean, there's, certainly, you know, off mentioned one where you're driving by a Starbucks and then Starbucks coupon punches up, you know, on your head unit. So those are just some of the things where, connectivity is really going to play a major role on coronal. And this is not even a talking about say V2X like vehicle to infrastructure technology and, and that gets into some that's coming as well. And that gets into some really cool, you know, futuristic stuff where Avis has a pilot program with Kansas City where they're sharing data with, with the city. and the, the city itself is using that data to, you know, plan, you know, events better, to understand movements in and out of different areas of the city. and of course there's a safety aspect to all this too, whether it's telematics, simply understanding that an accident has occurred right away. And is the, is the renters safe to a vehicle to infrastructure play that little bit later out where, you know, vehicles talk to each other and can tell where were an accident this happened and alert other vehicles, that type of thing.

Scot:

[30:03] Cool. You said V2X, is that kind of the slang that you use for vehicle to infrastructure?

Chris:

[30:09] That's good. It certainly, yeah, it is. That is exactly it. You could say V2I or I've heard V2X.

Scot:

[30:17] Okay, cool. I also, whenever I read your stuff, I learned a whole new set of acronyms, so it's always helpful, right? Yeah. Though when you go from industry to industry, you have to learn all the different lingo.

Chris:

[30:29] Oh yeah. Tell me about it. Yeah.

Scot:

[30:31] Yeah. Speaking in acronyms, electric vehicles or EVs, they're starting to make a dent in certain segments of new car sales. Like the model three has kind of taken over it's category a. And then if we look at China and some of the Nordic countries, it's starting to be pretty material percentage of those sales. but yet, you know, when I go run a car, I don't see any electric vehicles there. Do you think we're gonna see EVs kind of available at Reynolds at some point and then, you know, we'll, there it seems like there'd be a huge amount of infrastructure they're going to have to have around charging. And you know, what happens to me if I get beyond my range, all that kind of stuff.

Chris:

[31:06] Yeah, you're absolutely right. The infrastructure issue is the major issue for a car rental when it comes to electric vehicles. where you're seeing the penetration right now is in car sharing schemes. You know, General Motors, a division Maven, has, various schemes that this is a prominent place for, General Motors to, you know, offer a Chevy bolt to potentially new buyers through their maven car sharing scheme. And, you know, we see this certainly offered in, in cities. It's where Maven as is found mostly in cities, would have a greater infrastructure. you know, in along with car sharing, you know, we've got a company here in La called envoy, in envoy is, offering cars as amenities in their electric vehicles. in, in, you know, real estate, situations, whether they're corporate campuses are buildings and they're all electric vehicles and they come back to, you know, they're good to go out for, you know, half a day and then come back to a parking lot where they can charge. I would see, really when the infrastructural rollout is more prevalent in terms of public charging, because obviously Evie renters, you know, right, right now Evie buyers charge mostly at home, but renters wouldn't necessarily have the rental that the infrastructure at their house. so they'd need it essentially solely to either charge it there at the rental place, which they don't want to be at. They're going to be doing some or, or out in the field. so that's probably the major issue for penetration of EVs in traditional rental right now.

Scot:

[33:14] Do you think the range has to increase? So like, you know, the volts, the leafs and those kinds of guys have about a hundred mile range, which is probably way too small for rentals. But the Teslas are getting up kind of around 300, which is about, you know, I would guess that's well within the daily range that rental car companies have.

Chris:

[33:32] Yeah. So the, the bolt, the bolt actually, has over 200 mile range, which is actually pretty good. And, and the leaf, the next generation leaf as well. And I think, it, the coming soon, you know, we do have an onslaught of Evie models and I think the benchmark really at this point is 200 mile range there. There's one other factor which is often overlooked when it comes to, whether it's in commercial fleets or in rental fleets. And that is the x factor when it comes to depreciation and how much that vehicle is going to be worth when you take it out of the fleet. And we're just starting to wrap our heads around some numbers that allow for, what those vehicles are going to be valued and sold that. And the secondary market. And these are, the, the main total cost of ownership is the main issue.

Chris:

[34:32] so we can't discount that at that point. so if a rental company, if ava spies 500 Chevy bolts, they're going to have them in their fleet for, traditionally, like less than 18 months, what can those Chevy bolts be sold for in the aftermarket? Right now? That's enough of a question mark that would, they wouldn't, would they avoid a flooding up in addition to the infrastructure issue? Of course, as in chicken and egg fashion, we build more infrastructure. we get more people buying them and more wholesale values. so more comfort with a total cost of ownership.

Scot:

[35:16] Cool. Yeah. I know like a Prius is, for example, the most of these things, the lithium ion batteries have a defined life, right? And then it has to be replaced and that probably throws the whole, the valuation of the depreciation and to, chaos versus an internal combustion engine.

Chris:

[35:33] Well, you know, and here's the, here's the funny thing about that. And, so there was a company called test loop out here in California, which, you know, great concept that they shuttered. but it was essentially a shuttle service between various points. La in San Diego, in La and in Palm Springs, La and Vegas. And you would essentially rent a seat in a shuttle and it would pick you up at a certain point and it would take you at a certain point. So famously they had a Tesla model last the Hawk or whatever that I actually wrote in and that was high mileage in four years. They put on over 400,000 miles and the battery life held up pretty well. So I think we're getting to a point where we're seeing that these batteries and let's not discount the issue with batteries and the environmental issues of what we do with those batteries after the vehicle is gone. But the batteries hold up a lot better than expected. And you know, battery degradation is being solved, thankfully. So I, I think, I don't think we're looking at like, oh, this electric vehicles is just going to fail on us in, in three years and we're going to have to spend $15,000 on a new battery. I think there's a lot more that, this is probably still an issue, but I think the comfort level is a lot better on that point today than it was.

Scot:

[37:10] Cool. and then, the last kind of leg of the stool we haven't talked about is autonomous vehicles. And you touched on it a little bit. what, what's your prediction on, on AVs is this, a lot of people are pretty aggressive with kind of 10 years away if, you know, I kind of get the feeling you think it's a little bit further out.

Chris:

[37:29] Well, you know, people ask me where, when are we to see autonomous vehicles? In my answer is like, well, where really it's going to be where cause we're going to see penetration in different areas a lot sooner than we'll see. Just sort of general consumer penetration. And, we are starting to see a closed campus, trials. and, that's pretty obvious. You know, like the shuttles, local motors has has a shuttle and closed campus seems like it is certainly a natural deliveries without a passengers in them. They're still like a lot less of a liability issue. And I think you'll see a autonomous delivery shuttles for goods and services being rolled out quicker. and then in Geo fenced areas and cities, a very defined area in Manhattan that allows for autonomous vehicles and we can kind of keep an eye on them, they're a lot easier, and kind of manage them, you know, those that.

Chris:

[38:41] So, so the third leg would be that sort of Geo fence thing. And I could see that coming to pass within five years and then a pretty long tail before the world is autonomous. and we see, you know, just mass adoption of autonomous vehicles say to just to get to work. Now, one other thing we can look at perhaps is dedicated lanes on freeways where we see big trucks that would run a autonomous, where they, what would have been a driver and is now like a load manager in an autonomous truck, running cross country that goes into driver mode when they get off an exit essentially. But that long stretch could even be maybe even be a dedicated lane. I mean, I can see that going to pass within seven or eight years, but you know, full autonomy, it's going to be need based and and, and, and certainly, you know, the, I think that the regulatory environment, that I know is really not formed yet. So outside of these geo fenced areas, I think that that's one barrier. And so 2030 is sort of a boogie man. I mean, I, I, we really don't know. It seems like a signpost, you know, but I think it's anyone's gas.

Scot:

[40:21] Yeah. Let, let's say it's 20 something. 20 X. Oh yeah. And, and we have, you know, a fair number of these autonomous vehicles around. Who Do you think is owning them and news taking care of them?

Chris:

[40:35] Yeah, that's a really good question. Who has the right to win? There are, I mean, obviously the Uber wants to have that right to win. I can tell you that some interesting data and looking at, and, disengagements in California testing of autonomous vehicles is really interesting. First data points that are coming out about who's further along at the very least, who's further along with the technology. and, it's, so disengagements are essentially like in the testing in California, this has to be reported to the Department of motor vehicles, which, which, how many times does the driver have to grab the steering wheel is called a disengagement. And Google's Waymo, and GMS, Cruz, General Motors, autonomous unit crews are way ahead of any other company. Tesla's not even on the map because test is not really doing autonomous vehicle testing.

Chris:

[41:49] I mean they're testing, you know, through there, through consumer use there they're testing sort of level two autonomy and going on a level three autonomy. But I found that really interesting that the amount of miles traveled and the amount of disengagement, the percentages are a Waymo and Cruz are absolutely the best and they have half of all the autonomous miles travel. This is just in California. I mean, but we do have some serious testing here now. So who wins in terms of being the provider? it's going to be partnerships. I mean, I think that the, jury is still out of rental is going to be, if you're going to open up your app and it's going to say Avis and then you're going to get a VUS is going to be the provider, but GM you know, a cruise vehicle is going to show up at your door.

Chris:

[42:47] is it going to be Uber? you know, I think we, we have to consider Uber as a player, but then like, so, you know, Waymo how is Waymo going to rollout there? Their system, you know, how are they going to roll out the retail experience, retail consumer experience? we don't know. Are they going to seek partners? It's still up in the air now. I think General Motors, we have to consider that General Motors is going to be there. they're the producer of the vehicle and they have their maven unit is, essentially their test ground for these types of things only with internal combustion engine. So they're going to be a player for it as well. I mean, I think Ford's behind Waymo in terms of autonomous testing, but they are certainly actively looking at how ecosystems are forming or on autonomous vehicles.

Scot:

[43:50] Yeah. And, I come from the ecommerce world and you know, when I, when it kind of look at the landscape, the, in the ecommerce world, the companies that were the least nimble, we're the ones that kinda couldn't really get it out of what we call the innovator's dilemma. And it sometimes feels like the kind of the dealer framework we have today is so antiquated and, you know, Tesla's showing how quickly they can disrupt it. do you think those guys kind of have a place in the future or do you think though eoms kind of have to start going around them or, or are they essentially the service bureau? How does that shake out?

Chris:

[44:21] Well, there's one thing, powerful thing that we can't really discount when it comes to the world of dealerships. And that is that there, you know, the dealer lobby is a very powerful force in Washington and the OEMs are not ready to say anything except give hugs and kisses to their franchise dealers. and it's been a good relationship and you're right that, a more efficient model ultimately wins out. But the dealerships can change in ways that I think will for sure see more consolidation after 2009 and the, the recession, you know, we've seen a consolidation of dealers to sort of mega dealerships that will continue, but the alerts are sitting on some very valuable real estate within cities. And we are seeing right now that they're becoming hubs in interesting ways, in their, becoming hubs for a ride ride sharing where, it's a place for them to pick up a car for a ride hailing drivers to come and pick up a car for Uber and Lyft and, even a potential sale at this point.

Chris:

[45:49] I know the few dealerships are actually creating hubs for ride share drivers to come and get a car and they're creating almost like, you know, in the showroom carving out a part of a showroom that's the specific to ride hailing. So that's and you know, as as as a hub for servicing, you know, a lot of these, it perhaps even for autonomous vehicles, as a hub for servicing. I think dealers you don't want to play in that. In that world the servicing will be a lot different. Obviously it will be less about repairs and you know, the, the brain gets scrambled trying to think of, you know exactly what that entails. But I think that their dealerships are hubs for market intelligence and vehicle intelligence right now. And the smart ones will be able to hold on to that advantage in the future.

Scot:

[46:52] Cool. Yeah. I think the only thing we can guarantee is there's going to be more changed than, than there ever has been coming up.

Chris:

[46:58] Yeah, absolutely. I mean it certainly car rental, is has faces similar challenges in terms of having to reinvent their, their business model, but I even read reinvented, but make it just make it more efficient to poise itself for the future.

Scot:

[47:15] Yeah. Any, we're running up against time and I want to be cognizant of, of your time. were any other thoughts of where we're going to be, around either rental car ownership or any of these topics in five to 10 years that you want to close on?

Chris:

[47:28] Well, I, that we are finally coming to a spot that we've been talking about for years with car rental and that is a, a, a much more efficient car rental process that is app based, that involves a direct access to a vehicle. the first shoot green shoots of that would be, you know, avoiding a car won't align at the airport. I mean that process as it stands today of getting off a plane, getting on a shuttle, going to a physical location, accessing a car, waiting in line for 20 minutes and then getting your car, it just doesn't work for today's transportation needs. So the first step there is to put the ability to lock and unlock the car, and in access to car essentially through an APP. And that, that is happening now. I think you'll see a completely connected car rental fleet of the major colonel companies, within three years.

Chris:

[48:29] It's sooner for most of the vehicles. The next step from that I think would be, and this is a harder step, frankly, that is to decentralize the fleet, but I think that that is going to happen with strong partnerships that need to be made. And we'll call it kind of like the, the Starbucks Starbucks suffocation of, of transportation modes where there's not one central hub. But you know, we find Starbucks in airports and in city centers and in hotels. so cars will be let's say strategically placed in that way and access through an APP. I think that will finally happen. And you know, like I said, I mean this is what's going to happen in the cities is going to happen a lot quicker than what's going to happen in the suburbs. I think 10 years from now will outside of city centers, I think people will still own their pickup trucks and, and they'll still be internal combustion engines for the most part.

Scot:

[49:34] Cool. One last question for listeners. I follow you closely on auto rental news.com and I recommend everyone subscribed to that. aside from that, are you a frequent Twitter, Instagram or snap chatter link dinner, where, where can people find you?

Chris:

[49:48] Let's put it on Twitter. You can find me @fleetchrisbrown and I am always priding myself. I need a tweet more so, but a fleet, Chris Brown is where you can find me on Twitter and linkedin. Just look up Chris Brown, Bobit business media. And I, I post most of my blogs there and certainly, go to fleetforwardconference.com, for info about our upcoming shell. And as you said, auto weren't all news. You can find us online autoworldnews.com and if you're into this small commercial fleet world businessfleet.com awesome. Pretty much covers it.

Scot:

[50:26] Cool. Well we really appreciate you taking time out of your busy schedule, running all these shows and putting out all these publications, and sometimes tweeting. So really appreciate you coming on the podcast.

Chris:

[50:38] Yeah, not a problem. Thanks a lot. Appreciate it. Scott.