Uber and The Luxury OEM: Strange Bedfellows

A luxury OEM and Uber recently teamed up to offer free rides in the backseat of a newly redesigned 2016 luxury vehicle. Granted the partnership was only for 8 hours in four cities (unless the partnership was a success and then presumably it will continue), but still, strange bedfellows indeed. Let’s take a look.

In one corner we have Uber (established 2009, $50 billion valuation) whose CEO, Travis Kalanick, has a stated corporate mission of ending car ownership and turning personal transportation into a utility. When Uber launched, its goal was to become “Everyone’s private driver.” Now it’s transportation as reliable as running water, everywhere for everyone.”

In the other corner we have a 100 year old luxury OEM with a similar valuation, manufacturer of some of the best engineered products in mankind’s history, and one of the most respected brands in the world.

We won’t get into whether Kalanick’s vision is feasible, or the economics of ride sharing vs. car ownership, or even the wisdom of the (short term) partnership. We understand the benefits to both companies. Uber gets to promote its brand alongside a luxury OEM implying that ride sharing is good even for the affluent market, not to mention capturing some of the OEMs well-heeled customers. We’re not entirely sure what the benefit is of asking loyal customers to download a ride sharing App. Ostensibly, the OEM believes there is value in getting its soon-to-be released luxury automobile into the hands of prospective customers to experience – not a test drive, since they are sitting in the back seat of the car – that new car smell and the back seat. And let’s be real, for the subject luxury vehicle it is one delicious scent and may indeed inspire sales. No, we want to explore the message the partnership sends to the market, especially franchise dealerships.

Underlying Uber’s tagline is Kalanick’s dream and stated corporate mission to “make car ownership a thing of the past”. He tweeted:

“Our intention is to make Uber so efficient, cars so highly utilized that for most people it is cheaper than owning a car.”

Here’s another Kalanick quote from an interview at the 2014 Code Conference in Southern California when talking about self-driving cars:

“The reason Uber could be expensive is because you’re not just paying for the car, you’re paying for the other dude in the car. . . .  So the magic there is you basically bring the cost below the cost of ownership for everybody, and then car ownership goes away.”

Stated bluntly, Uber is anti-automobile industry. Uber wants to turn transportation into a commodity, as free flowing, as ubiquitous and as bland as water. Kalanick could care two wits about the beauty of the automobile, the freedom it affords, the individuality it symbolizes. Car ownership is inconsequential in his future. You don’t need to own one of these machines, just hail it, push a button and it’s there. Get in, go, get out.

Even worse for the OEM than partnering with an anti-auto industry heavyweight is the message teaming with Kalanick sends about drivers of cars, whether they are Uber drivers or the cargo they transport. It’s not about the car, nor is it even about the “dudes” in the car. Uber cares about efficiency, economy and utility. Granted Kalanick’s quote about “dudes” is in the context of the driverless automobile but the point remains. Uber stands for nothing but faceless convenience.

The messaging it sends to luxury car owners, and to the people in their lives, couldn’t be more awkward. Luxury automobiles are all about individuality, distinction and emotion. The whole purpose of owning a luxury vehicle is to make you FEEL special. You don’t even have to drive the car, just get in it and you feel good (again, that new car smell).  You could be sitting in your kitchen, and the car could be parked in your driveway, and you still feel special. Of course high line OEMs want people to buy their cars, and teaming with Uber could perhaps advance that goal in the very short term. But luxury buyers  don’t purchase expensive cars just to get from point A to point B, they pay for luxury because it is manna for the soul.

Few and far between is the pairing of messages and symbolism this contradictory. But so what? Why does this matter and who should be concerned? Getting customers in the new model is the important thing… right?  They’ll experience the car, and they’ll want to buy one. Not so fast.

Other than the contradictory message it sends to the market, the partnership matters because the OEM bypasses their real partners, the franchise dealers. Instead of summoning a car through a faceless app to take a ride in the backseat, why not give the opportunity to show off the vehicle – AND EVERTHING THAT COMES STANDARD WITH THIS VEHICLE, SUCH AS COMPLIMENTARY SERVICE VALET – to a real salesperson or product specialist from a real franchise where the car will likely be purchased. Not only will the branding stay consistent, but the OEM would be delivering a much more appropriate, if not the quintessential message, to prospective customers: “We care about you — your safety, your time and happiness. We drive to you.”  Not some Uber Joe who really could care less about the experience as long as he gets his pay.

Now comes, admittedly, the self-serving portion of this blog post. (We believe that it’s ok, however, to be self-serving when you are right and it’s in the best interest of your customers.) Instead of Uber, the OEM should be using RedCap’s software to help the dealerships facilitate the experience. Our platform is built specifically for auto dealerships to give their customers out-of-store experiences with a fully-branded suite of technology and driver solutions. The customers  get a REAL test drive, not a sit-in-the-back and blow your nose ride. Instead, they get behind the wheel, and experience precision engineering and the fine luxury of the ultimate driving machine. Customers shouldn’t hail the car for a fleeting experience. They should have it delivered to their doorstep to experience the long term benefits of luxury CAR OWNERSHIP.

OEMs should give the opportunity to the hard working folks at the franchisees to provide the experience. Definitely not Uber which is trying to demolish the industry in the long run.

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