San Antonio—People who drive spend about 50 minutes on the road per day, according to consulting firm McKinsey. And while laws discourage people from using a cell phone while driving, it’s no secret those drivers probably have smartphones nearby.
Some tech startups are seeking opportunities in the auto industry, by using data they can get about a car’s operation through its diagnostic terminal to make deals with insurance companies or make recommendations to consumers about when to get an oil change.
That’s similar to what San Antonio-based CarCalmly plans to do when it launches a beta version of the app it is developing in August. The company, founded by four people who met at 3 Day Startup earlier this year, asks consumers to input information such as the year, make, model, and mileage of their car in order to get recommendations for oil changes, tire rotation or replacement, and other services, such as reminders about the repairs.
The company lets users save favorite repair shops, which is part of how it plans to use to encourage repair shops to pay $40 for basic listings or $200 for more prominently featured sponsored listings, says co-founder and CEO Dave Geada. CarCalmly believes buying ad space on CarCalmly will help repair shops with customer retention. Eventually, the startup plans to sell those shops the ability to directly market to consumers through the app, among other services, he says. The company is currently working on getting in the app store and expects to start its beta Aug. 14.
It’s an increasingly congested market. Carfax has had a similar app for monitoring when your car needs maintenance since 2013. Boston-based Openbay has a couple of products also focused on diagnosing repairs or recommendations for shops to take a car. RepairPal, based in San Francisco, gives consumers estimates on common repairs.
Meanwhile, some large insurance companies have started giving discounts to drivers that install devices in their car’s diagnostic system, which tracks their driving habits: Be a safe driver and get a discount on your insurance premium.
In Detroit, a few dozen auto-focused startups have been part of the Techstars Mobility accelerator, including a number that are trying to connect consumers and repair stores. That includes Denver, CO-based My Dealer Service from the 2015 class, which helps customers communicate electronically with dealers, sharing things such as real-time photos of the work being done on their cars. Another company from Techstars Mobility in 2016, Acerta, used machine learning to detect anomalies and predict failures for vehicles coming off the assembly line. The 2017 Techstars Mobility class was announced earlier this month and includes startups developing technologies such as monthly car-sharing subscriptions and cybersecurity tools.
Despite substantial competition—including a large, well-known company like Carfax—Geada says he thinks CarCalmly can make inroads with both consumers and repair shops by targeting smaller repair store groups—in particular owners with fewer than 10 stores. Geada co-founded the company with Phil Simpkins, Marie Guajardo, and Lev Burov.
From initial research, Geada says the company believes most service providers would be happy to pay for sponsorship in return for getting in a few extra customers each month and increasing customer retention by 10 percent to 15 percent.
“Nobody is really addressing these guys because they’re below everybody’s radar,” Geada says.
