Are Towing Apps Motor Clubs In Disguise?

Imagine you’re a neurosurgeon, and it’s the middle of the night.  You’ve just been awakened to perform emergency brain surgery on a patient who’s been involved in a horrific accident.  Upon arriving at the hospital, you encounter nurses and support staff busily preparing the patient and the operating area. You wash up and dig right in, only to learn that the problem is far worse than diagnosed.  Then, after a sorrowful explanation to the family, laying out their loved one’s chances of survival, you spend the next 23 hours relying on your vast experience and training to bring a swift solution to the problem—and save a life.

Now imagine the same scenario, but instead of being a neurosurgeon, you’re a 20-something Internet Technology (IT) guy with a big idea of solving a problem.  But rather than wasting years of your life in medical school and countless nights to sleep deprivation, interning at various hospitals—you’ve been pounding away at your keyboard, creating lines of code—with the goal being to come up with the next great Brain Surgery App. A miracle App intended to streamline the entire brain surgery process and decrease the costs.

On the surface, most would be inclined to applaud the IT guy’s efforts—because it looks like his heart is in the right place. But if you’re a neurosurgeon, you’ve got to ask—”How is this IT guy qualified to solve this problem?”

Now, the towing business ain’t brain surgery, but it does have its similarities.  Sleep deprivation, pressure to perform, industry-specific expertise, and a significant investment of time and resources.  And although there’s no Brain Surgery App, – yet the towing industry has seen its own wave of towing Apps hit the market.

From Honk, Towing Nation, and Curbside SOS to Urgent.ly, and hell, even All-State’s got an App. And all of these handy dandy Apps are designed to provide solutions to the problems that plague our industry.

And maybe a fresh pair of eyes is what’s needed to set our industry straight…It couldn’t hurt, I guess.

Take, for example, the fact that most towers are self-reliant and tend to do things the way they’ve always been done. Of course, the work is always completed, and the roads are always cleared, but what if, during the course of a difficult car accident recovery, someone presented a new way of solving a problem? What if this new solution enabled towers to clear the roads faster? What if it was safe and the towing company made the same amount of profit? Would that solution be welcomed by all?  Of course, it wouldn’t. Towers are a cantankerous bunch. But to summarily dismiss the value that new solutions (towing Apps) might provide to existing challenges would be a mistake.

You’ve got to admit, real or perceived; the towing business has its fair share of problems.  And if an App can help fix some of them, then it might be worth taking a look.

Are Towing Apps Motor Clubs In Disguise Or A Viable Solution?

Well, you’re in luck because we’ve done the work for you.  Our crack team of investigative journalists tackled this important issue and contacted a handful of the Towing App makers for more information, and here’s what we found.

So, we wanted to know what’s in it for the towers. Are towing apps the same as your traditional profit squeezing road clubs — but just all dressed up in adorable, harmless sheep’s clothing?  Or are Towing Apps truly here to help towers make more money?

When asked this question, Luke Kathol, Co-Founder and COO (that’s Chief Operating Officer to you and me) of Urgent.ly, said that with his app, “…Towers can make up to 2 ½ times what most motor clubs are paying…there’s no paperwork, and they get their money overnight.” He says that his company understands the difficulties towers have had with some of the clubs and that “…We don’t treat towers as suppliers, we treat them as customers.”

Heather Shelton, Vice President of Honk, says, “Our goal is to turn a bad experience [a stranded motorist’s experience] into a better one.  And we know that we can’t accomplish that using traditional methods…that include traditional compensation. All our providers are independent contractors, and we don’t dictate rates.”

Don Miller, CEO and Founder of Towing Nation says his App is different than the rest, “We simply connect the motorist directly with the closest towing company, cutting out the middle-man entirely. We don’t dictate rates, and we don’t gouge the towing customer or the towing company.”

But what about volume?  Granted, even the oldest of these Apps has only been around for a few years, but if any of them are going to have a shot at disrupting entrenched competitors, they’re going to have to do more business.  Towers from all over the country can attest to the fact that income from these Apps isn’t really having an impact on their bottom line.

Kathol; “Urgent.ly is now part of AT&T’s Connected Car Platform and will be partnering with a luxury automotive brand in the following months, so we expect volume to more than double or even triple.”

Shelton; “Honk is always onboarding new partners, and we’re continuously making upgrades to the services we provide…we believe the way to grow is by providing an exceptional experience to the customer.”

Miller;  “With Towing Nation, we’re not really trying to compete against the big guys. We’re just wanting to provide another option, one that we believe is more favorable to both towers and consumers.”

As far as marketing the Apps to the consumer, when it comes to using Google AdWords, one concern many tow company owners have is direct competition for clicks.  The argument is that if both the App Maker and the towing company are going after the same customer, the tow company loses.  First, the cost per click goes up due to the competition for keywords. And secondly, if the customer chooses to use an App rather than calling the towing company directly, the App maker’s taking a share of the towing company’s fee. Many are asking how this arrangement can be good for the towers.

In most areas, AdWords costs range between $7 and $16 dollars per click.  Towing Nation’s flat fee doesn’t come anywhere close to that, and the towing company charges its own rates. Urgent.ly no longer uses AdWords Pay Per Click but relies mainly on its partners and word-of-mouth to market its App.  Honk relies on PPC and word of mouth to market their services to the consumer, but they also bear the brunt of the expense on the towers’ behalf.

But is this even a legitimate concern? Apps competing with towers for customers? If you’re asking this question, then you must believe that there’s a limited supply of customers available to towers—that the towing industry is a zero-sum game.

But it doesn’t make sense to assume that just because an App maker gains a customer, a towing company loses one.  Besides the fact that you’re the one servicing the App’s customers, the mere existence of the App serves to widen the available customer base.

Just look at Uber.  Before the advent of car-sharing companies, people either drove themselves, called a cab, or used some other form of public transportation.  Driving yourself meant battling traffic and finding a parking spot.  Public transportation is well—Public.  And taking a taxi usually involved an extended wait.  But with the Uber App on your phone, you can get a ride in a matter of minutes.  This caused many, those who wouldn’t have otherwise called a cab, who would have instead driven their own car, to choose another option, Uber.  This then increased the pool of customers from which all ride providers could draw.

Granted, the towing business is completely different than the taxi business, but I think most would agree that anything that breaks down the barriers and brings more potential customers into the mix is a good thing.

One thing is for sure, just like the motor clubs, Apps aren’t going away anytime soon.  And even though the App makers may be on the outside looking in, sometimes a fresh perspective is just what the doctor ordered.