Fair launched as an app in Southern California in September, and is the first app that lets consumers get a car on their phone and return it at any time. It represents a completely new approach to how people drive and pay for their cars. Unlike e-hailing and car sharing applications, Fair looks at filling the gap between a short-and long-term usability, allowing customers to pay a monthly fee when they like and for how long they like. Leasing has always been an attractive solution to those who don’t want to pay the full price for the vehicle in one go, however they are then locked in for around three years which is not as flexible as you would expect modern ownership to be. Georg Bauer, the President of Fair, tells me that he calls the company’s solution “flexible ownership,” because it provides the benefits of owning a car without the long-term commitment of a traditional loan or lease. “It’s a big idea in the automotive space that both Fair CEO Scott Painter and I were immediately passionate about when we decided to become partners. Of course, we come from opposite ends of the car business - me from auto finance and he from an entrepreneurial background - but that just made us feel even more conviction about our concept,” he says. “After all, we took it as a purely positive sign that both of us independently arrived at the same conclusion: that the customer experience is the biggest challenge in the industry and needs a drastic solution.” Fair’s initial goal was to cut out the traditional process of car-buying, making it easier for the consumers. “In short,” says Bauer, “we wanted to make getting a car fair.” With the need for private car ownership falling, mobility providers like Fair can help create a cleaner and more efficient transport system.
The automotive industry has started to see a drastic change in the concept of vehicle ownership on the horizon, with companies such as ZipCar and Uber luring consumers away from dealerships, which have not had the opportunity to adapt and evolve to suit their customers’ new demands. The industry is undergoing a fundamental change in the automotive industry, however Bauer believes that this is a new beginning, rather than an end of an era. “Autonomous vehicles, ride-sharing, car-sharing and electric cars are putting tremendous pressure on auto retailers and financiers to develop new models for the modern consumer that will only make mobility more accessible and feasible for more people,” he says. “The appeal of having a car of your own will remain strong well into the future because it’s simply too attractive and convenient on too many psychological and practical levels. Ride-sharing and car-sharing may be useful in certain situations, but they’re not going to replace car ownership any more than taxis or the subway did.” In fact, car sales have risen to an all-time high in the five or so years that ride-sharing has been around. This may change down the line, however there is an obvious demand from people who want a car of their own, able to jump in and drive whenever they please. “People will need solutions for getting cars of their own and paying for them for many, many years to come, and dealerships and auto financiers will continue to adapt to help deliver that,” adds Bauer.
As previously mentioned, Fair is bridging the gap between car sharing and traditional car ownership, as it still believes that there will be continued demand for this. And, to be fair, he isn’t wrong. Despite the environmental and congestion issues, people still want to own their own car, as they have been so used to doing all their life. This doesn’t just benefit the drivers, but the dealers who will need a lot of support in the upcoming years, desperate for a product like Fair which will eliminate the notorious dealership persona that puts off many consumers. “Dealers are at the very heart of Fair’s model. We rely on them to provide cars of all brands and models that are offered on our app. In return, Fair delivers dealers a host of benefits, including fully-funded transactions, increased deal velocity and access to a desirable base of modern consumers - all at no cost and on top of their existing sales channels. In Los Angeles, we’re already partnering with close to 100 dealers, and we look forward to making Fair one of the primary retail strategies in the industry,” says Bauer.
It is all about adopting innovative technology and a new way of thinking, as opposed to the linear buy-to-sell model. The automotive industry has been great in this sense, although this has never extended beyond the car - until now. “The auto industry has always been an innovator; it’s just that these innovations have primarily focused on the car, not the customer,” says Bauer. “But as we’ve seen in other industries - from music to retail to entertainment - the digital age is changing all of that.” Until recently, the automotive industry addressed customer demand with online vehicle purchasing, financing and pricing. Now, thanks to the influx of technology that we are seeing across industries, it can finally reinvent itself through applications and innovations that make the buying and using process much easier for consumers. Bauer explains that Fair is much more than a financing entity, able to provide a complete solution for customers and dealers, which will help create a new platform and tip the buy-to-sell model on its head. “Fair is much more than a financing entity. It’s the first completely end-to-end solution that lets customers accomplish all the steps of getting a car right on their phone: shopping, getting approved, signing, even setting up monthly payments. This is totally groundbreaking in the auto industry, and we think it has the potential to be a revolutionary step in how people pay for and drive their cars that is perfectly suited to today’s connected consumer environment.”
Unlike autonomous cars and alternatively-fueled vehicles, car sharing is an innovation that exists today and works around current infrastructures and societies. In short, car sharing is the most immediate response for a cleaner, smarter and more efficient world. Although Fair provides a mobility service, Bauer does not treat car-sharing brands as rivals, but looks to them as an enabler of its own model. “Car-sharing has no doubt been an exciting development that has stirred the public’s imagination regarding the various ways we can challenge traditional concepts of car ownership and use. As such, we tend not to view car-sharing and ride-sharing as competitors, but as enablers of progress that only benefit our model,” he says. “Car-sharing is mostly limited to the densest areas of our largest cities where there are adequate levels of infrastructure and demand for the service. Fair aims to be a much more pervasive solution for the millions of people who want the benefits of having a car of their own, but don’t want to stake themselves and their finances to a depreciating asset for six or seven years - long after its technology is out of date and they’ve lost any sense of their initial joy in driving it.
In addition, Fair’s application can fuel the transition to electric vehicles, allowing customers to try one out for a month instead of fully committing to paying out for one. Alongside car-sharing and ride-sharing, I can really see Bauer’s company effecting this shift which is certainly welcomed by everyone involved in the industry. “Electric vehicle technology is obviously still in its infancy, and will grow by leaps and bounds by the year. Fair is the perfect solution for someone who wants to go electric, while retaining the ability to upgrade to the latest model whenever they want,” adds Bauer. We have always analysed and accepted the removal of privatised vehicle ownership, so it is interesting to see it from another perspective, which would certainly work for many. Flexible ownership is the first step towards a new chapter in how people access and operate vehicles, providing benefits for both the dealer and the customer. “In ten years, I would expect flexible ownership to be a predominant customer preference in both the new and used car markets, but make no mistake: we have plenty of work ahead of us to make that happen,” stresses Bauer. “We are expanding to the rest of California this month and plan to be nationwide in 2018, so all of our focus is there for now.”