Word on the Street

Word on the Street

By Sam Johnson

Do you remember playing Slug Bug when you were younger? You know, the game where you spot a VW bug and punch the arm of your passenger who missed the opportunity to call it out before getting slugged? Or “I Spy”, looking for certain items along the roadside? For ten or more years, I have been playing a game much like Slug Bug and I Spy, only this time, the hunt is for new towing companies with names I do not recognize.

Since starting this little game, not a week has gone by that I haven’t spotted a new name on the side of a tow truck as I drive around my town. Sometimes it’s a “new” company, with the same truck and the second or third name on it. Today, I look for two a week and to my surprise there are plenty out there. Most are single truck operators trying their hand at our industry, finding after a short time that they are unable to survive in today’s highly volatile and extremely challenging industry that requires much more than simply having a truck and being able to transport a car.

The most recent trend I have noticed is the number of well established, and even sizeable, towing companies that have closed their doors. These companies were my competitors and peers in the roadside service and towing industry, some for as long as 30 years. Most of them today are closing their doors, liquidating their assets, and walking away with broken dreams. There are a handful within 15 miles of my shop, and numbers into the double digits as I look throughout the state. I don’t share this to bring doom and gloom, but to call attention to and acknowledge it as a sign of the times.

For those of us that are still in it the game, and battling the daily grind to remain in this competitive industry, I would offer the following observations. Towing and roadside service is not going away. We are not in the yellow book of advertising or the pay phones of the past, but as we go forward, we will look very different from the distant roots of our inception. To say that we will not be effected by today’s technology and the advent of the smart phone would be like denying that Uber had any effect on the taxi industry.

So, then what? How will it change, and what does the future hold? Consider other industries and markets and what happens to them when they see these types of challenges and changes.   See how they have adapted to excel in a competitive yet changing market and apply that to your own business model.

What we do know is that the demand for our services is not decreasing. In fact, in most areas there is a significant rise in demand with the growth of other segments of our economy. It’s getting harder and harder to get in and really be a competitor. Regulations and market penetration prevent you from tip toeing your way into this industry. Technology will change the game – be it an app based product or a smart car service request, our volume of work will be manipulated and directed through these next trends. Use this time as an opportunity to be on the cutting edge of these new business trends and models to ensure you do not fall prey to the I Spy game of closing businesses and broken dreams.

I see hope and opportunity waiting for those that can not only hold on, but who can thrive through these challenging times and make it to the other side. With a decreasing supply chain of qualified companies and a rising demand for services, the price point is soon to follow. You simply can’t afford to run these businesses for the same rates of last year or worse, the last five. The simple rule of supply and demand tells us that it’s just a matter of time.

My prediction, just like Facebook, Twitter or Uber, an app based technology is going to rock our world. It will upset the apple cart and those that can embrace it will thrive. Those that can’t…. well I think we all know how that story ends. The traditional “towing” model will eventually be no more and a new model will emerge in its place. Our industry, like many, may look drastically different in five years, but it will still be here with plenty of demand. The question is, will you?