When we were conceptualizing startup idea in India (2008), we were exploring automotive aftermarket to find out if there is a any Indian market for a digital platform of car service centers. We were reading a lot about the Global trends. The OEM Dealer Service Center was busy queuing booking of their “warranty” customers. Many car owners had to wait for a week or 15 days to get their car servicing done. (even some tier-2 cities the situation is still the same in India). We were roaming around dealers for taking appointment from General Manager to talk about our platform, everybody said, it will not work. Within one year, we were able to find out huge potential of this new category when one multi-brand garage signed up for registering on our platform and we had a product to sell.
We did not have solid revenue model except the listing of all car workshops, so we were finding any product which we could sell while doing offline campaigns, BTL activities. A local “RSA company” approached to us with offerings of Subscription for Roadside Assistance (RSA). We started selling RSA Subscriptions as a product just to bear our offline campaign expenses. At every canopy campaign, we had RSA subscription along with some dry-cleaning products. This was the first time, we knew about this product called “Emergency Road Side Assistance” in 2009.
Roadside Assistance And Car Servicing as A Product
We were making digital platform, so, RSA was the first service-as-product we could sell online and were excited about selling something online in 2010. The “RSA company” took responsibility to serve our customers for RSA and rest “car servicing” was fulfilled by registered car workshop. Later in 2012, we started selling “car servicing” as subscriptions along with RSA. My venture was the first to create this innovative way to sell online “Car Servicing” as a package.
As we progressed with selling packages, we were facing the common issues like customer was not served with Road Side Assistance Service by the RSA company and we were losing customers even the car workshops were delivering with great car servicing. RSA was a service that was acting as hook for selling car servicing as a package. More and more packages were sold, we had more complaints with RSA delivery. At one point of time, we stopped selling RSA and focused on selling Car Servicing Packages without including RSA. What was a relief!
In 2015, AXA Assistance (Now acquired by RoadZen) approached us as they were starting new RSA service in India and agreed upon giving us white labeled product by the name “MeriCAR 24×7”. With my past experiences, I could not find reliable company with great RSA delivery, so, I wanted white-labeled product so that I can change the service provider if not found delivering as expected. We had a great experience as we had placed IVR where all RSA calls landed at their BPO without our intervention and we just receive the delivery reports.
Here is a story of No “Thank You”. No “Business”
Before even having own white-labeled, we were receiving all Roadside Emergency Help calls to our customer care helpdesk. We always think that Roadside Assistance is a great value to customer who is in trouble on the road and they can be our customers for other services too, but that is not the case.
As an assessment, I remember when myself started taking calls at night and a lady called us and I got a call at around 12am diverted through IVR Helpdesk. Here is a part of our discussion :
“How can I help you, Mam!” She was uncomfortable and said “I am not able to start my car. Can You please help me?” “Yes, Mam!, Please don’t panic. I will surely help you. Just give me your location, I will send mechanic at your location”
I asked her to keep waiting till I arrange nearest technician available. I had a list of technician who used to do RSA. I had given detail of the customer and asked them to reach there. The technician reached there with van and it took around 30 mins to arrange and technician was searching for the vehicle and I called the customer and she was not picking up the phone and then called up again and said
“Hi, Mam! My technician is around you and searching for your vehicle”
She said “Sir, I managed myself, few people nearby pushed my car from the back and car was at low-battery issue and my car got started and now reaching to my home, Thanks”. She cut my call. I told my technician to go back and said customer moved away, I will pay your expenses!
So, tell me, where is the business?
In another case, my team spent lots of time helping a family to come-out-of-situation at night and my customer care department called the customer in the morning
“Sir! How was the experience of our service at night”. He said “I am in a meeting! Don’t call me again”
So, now tell me, where is “Thank You!”
We always thought if my team help people to bring out customers from their trouble on the road, we can get loyal customers and serve them more, but customer only loyal when he is in the trouble. As he gets the service, it is assumed, you are just another private company selling your product.
With increase of these kind of cases, I remember, the first RSA company stopped serving customers who had not bought subscription. That also does not look good when there are many customers panic on the road and there is social service and some good company must help them.
Current Scenario In India
Today, customers have many options when they are stuck on the road like calling to OEM toll-free, car insurance toll-free and local private RSA company which you can search using Google anytime.
The sad part of your efforts to call everybody at the time of need is that – all service providers have same set-of-delivery-mechanics who tied-up with all those companies. It means, even you are calling to all companies,they have limited resources and there are more chances your request may reach to same mechanic/team who is registered with all those companies because nobody have own mechanic network but they are aggregating. You can say that every company has figured out selling RSA as a service but delivery-side is still weak in India.
The Most Common Reasons for Breakdown
As per Global surveys, 62.69% complaints are that engine is not starting. The figure could be same or around in India. Battery problems are common all over the world during weather changes or negligence of customer using more electric power when car engine is switched off. 19.40% complaints are with tyres and wheel issues. Rest problems are with mechanical. (Source : Autonational Car Breakdown Report )
The Players and B2B Business
In India, as per an estimate there could be over 1 lac car breakdown daily (estimated by number of puncture shops survived with minimum orders and RSA calls in major cities) and there are many players could not help everybody. Currently, Allianz Global Roadside Assistance working in 950+ cities and TVS Auto Assist operating in 2000+ cities are the main RSA Players in India.
Considering consumer behaviour issues of making introduction with customers and helping them when they need RSA, the top players work with OEM and sell their RSA policies to them. Just like every OEM has own toll-free to help their customers on the road and use these players and OEM pay direct to them on the behalf of customer.
Having alliances with OEM is B2B business and they get good amount of business. For OEM, selling RSA subscription at the time of selling new car is more easier than convincing them later. Even top players also understand the consumer behaviour towards subscription and RSA services. Most auto insurance companies offer roadside assistance as a policy add-on. That’s where it all started to reach customers.
The Global Market
As per Global Survey, there are rise of Road Side Assistance services as people are keeping their car for longer period. According to AA Ireland reports, there is 5.3% Increase in car breakdowns reported in 2017.
The maximum breakdowns are happened with cars aged 11 years to 15 years and second major breakdown with cars aged 6 years to 10 years. Globally, pre-owned (used) cars are increasing on the road and so, the breakdowns.
According to another report, Vehicle Breakdowns Hit Record High in U.S. Despite New Car Tech, AAA rescued a record-breaking 32 million drivers with more battery, flat tire, and key problems than ever before, according to a study.
“A new study by the American Automobile Association found that technology—including maintenance reminders and other safety alerts—hasn’t reduced the number of drivers stranded on the roadside. Breakdowns are actually happening more than ever.”
In other countries, RSA as a service is sold as “Cover Policy” . Some also sell Personal Cover for Roadside Assistance which states that the policy for Driver, not for vehicle. It means, the driver can avail the service of RSA company even he/she is driving any other vehicle.
80 : 20 Possibilities – A Business
In early days, I remember one guy who agreed to buy subscriptions for 3 cars said “how is your service?” I explained him “Sir! We have partners with RSA companies and local mechanics all over. We do the best to serve you across different locations”. “ Actually, I don’t need your service, I have my driver who does great job whenever there is an issue on the road” I was surprised and said “how come you buy every year RSA subscriptions”
“Gentleman, it is just because my wife asked me to buy for all three cars and just to keep, in case for emergency, which we never had as yet”
Every business which starts selling RSA Subscriptions as a Insurance Cover, they try to earn out of 80% customers who do not avail the service annually but buy it like “life-cover” types. Insurance industry is booming, but Roadside Assistance is not been standardized yet and not included even if it has same nature of doing business just because even insurance companies have to rely on un-trusted network of aggregation.
In my opinion, RSA companies are selling “risk-covered” insurance policies but without any monetary claims but the service. As I explained earlier, it is not easy to keep satisfied customers even they are served well . Anything like your mechanic reached at location little late for few minutes in the traffic road, can trigger escalation without understanding that mechanics also don’t reach you by flying.
Majority don’t want to pay for subscriptions from private companies until it is recommended through Dealers during buying a car or clubbed with your car insurance policy. Pay-Per-Use will be becoming popular but that is still not a big business yet.
Money is just around the “trouble”, solve it and get paid, otherwise when customer is relaxed and out-of-the-trouble, will not care about you.
With quick-payment wallet like PayTM, the company can ask customer to pay quickly before mechanic reach there. We recently tried, only 10% customers agreed to pay through PayTM. A small hope to make RSA as a good business without losing confused customer who can call everybody. Once he pays, he waits for the same mechanic.
Challenges and The Future
RSA is an asset based business locally in every city. For towing, customer prefers zero-degree flat bed trucks in case major breakdown, those numbers are less than “non-start” battery-issues. The top players are working on aggregation model where they tied –up with local workshops and mechanics. Maintaining high-customer satisfaction using aggregation network of local mechanic with almost no-control, is not easy. OEM always have strict policies to pay for their customers with guaranteed full satisfaction after their audit may eat-up the margin from RSA companies when OEM usually pay vendors after two months. Some RSA companies are still making money just because of support of dealers, otherwise, sustaining business for RSA company is not easy in India.
In metros, cosmopolitan cities where people have a great value for TIME, they pay higher amount for RSA than in other cities just to come out of trouble situation quickly. For other cities, where people can wait for hours for their friends to come at their rescue and rarely pay good amount for mechanic visit. Almost, all car insurance companies are giving roadside assistance along with their policy cover, but RSA is a separate product.
Worldwide, Roadside Assistance is recognized as a great service but it is still not matured in India yet, just because of unorganized aftermarket and lack of skilled labour. In other countries, a large trusted-brand chain of workshops makes the difference, that control quality at every level from serving the customer at road to serving at workshop with standard processes. In India, Consumer is not well informed about the policy and private companies want to sell RSA as a product without caring about consumer’s interest sometime. There is no standard set by any authority. The Government and General Insurance Companies must take part in formalizing Road-Side Assistance Policy as standard Insurance Policies to serve customers better. Implementation of innovative Technologies to track car mechanics services, that will help building trust with the customer on the road for their safety. Considering challenges and current changes in behavior of consumer, can you make RSA a business or social service? You decide 😉
Disclaimer : This article is written by Mr. Rakesh Sidana, Founder and CEO of MeriCAR.com. The content is Author’s own opinion based on experience, resemblance example of situations or write-up are coincidental, figures may vary according to report, this is purely written for educational purpose, pictures and trademarks are intact and provided with sources.