![]() Ratings for the Bay Area and California, updated every 10 minutes Other companies trying to create online marketplaces include Vroom, Carlypso, Carvana and Instamotor. Shift, which has $75 million in backing, employs 70 headquarters staff, plus 150 full-time and 30 part-time enthusiasts, who also do car inspections and other tasks besides acting as valets.Ĭompetition for used-car sales is stronger than ever, Wasserman said, noting that in addition to Craigslist and AutoTrader, there are numerous car-specific and model-specific sites. “They’re able to hold down costs because they don’t own any of the cars, but they still have to park them somewhere, do the inspections, bring the cars to potential buyers for test drives, maintain the website and more.” With that in mind, he’s not sure about Shift’s profit potential, he said. BestOffer burned through more than $20 million, he said, citing “too few sellers, too few buyers, the cost of doing inspections versus the $99 fee, the arrival of eBay Motors, etc., plus weak senior management.” Wasserman was vice president of engineering for, a dot-com-era auction site for used cars. “They have also addressed a pain point for the rental car companies, which now have an alternative place to sell their used cars.” “Those features help to account for their success to date,” he said. Tony Wasserman, a professor of software management practice at Carnegie Mellon Silicon Valley, said Shift gets credit for addressing the three biggest areas of concern for used car buyers: taking a test drive, negotiating the price and uncertainty over the car’s condition. Cars come with a free 30-day warranty and a five-day money-back guarantee. It also makes money by selling auto financing and extended warranties. Amounts vary, but its goal is to make roughly 8 percent from the seller and collect a 3.75 percent service fee from the buyer. Shift works on a consignment model, as did Beepi. Cosmetic Inspector Jovannie Tirona takes pictures of damage spots on a car that need to be fixed before it is listed for sale, at Shift's headquarters in South San Francisco CA, on Wednesday, December 14, 2016. Likewise, a valet - Shift calls them “enthusiasts” - will come to sellers’ homes to take their car to a central warehouse where the company inspects it, makes minor repairs as needed, then photographs, stores and lists it after agreeing on a minimum price. By contrast, Shift’s “fundamental distinction” is that “a friendly valet will deliver a car wherever you want for a test drive with no obligation to buy,” he said. One reason for Beepi’s failure is that it didn’t let customers check out cars in person before buying, Arison said. Beepi, a 2-year-old Los Altos startup that tried to create an online peer-to-peer marketplace as an alternative to car dealers or classifieds, recently shut its operations outside California (it was in about 16 markets, TechCrunch reported) and laid off 180 employees, despite having some $150 million in backing.īeepi said that it will merge its remaining business, which includes 80 workers, with, a company operating in stealth mode that is also seeking to disrupt online car sales. We can just focus on (attracting) buyers while getting cars from Hertz to sell.” He also hopes to sign up other large fleets as sellers.ĭespite his optimism, reinventing used-car sales is a slog. “It gives us a huge advantage in launching new markets, in a very scalable way at reduced cost. “It’s a game-changer for us,” said George Arison, CEO of 2-year-old Shift, which operates in the Bay Area, greater Los Angeles and the Washington, D.C./Virginia/Maryland area, and plans to add at least three regions next year. With that in mind, San Francisco startup Shift, a marketplace for used cars, says it’s getting a big boost from a recent deal to sell cars being disposed of by Hertz, one of the world’s biggest rental companies. That’s a challenge whether you’re selling rooms or robots, widgets or workers’ time, but is particularly formidable for pricey products like automobiles. Michael Short/Special To The Chronicle Show More Show LessĪ marketplace needs a balance of supply and demand. Michael Short/Special To The Chronicle Show More Show Less 2 of2 Automotive technician Gurgen Petrosyan works on replacing an axel seal on a customer's car in the repair garage at Shift's headquarters in South San Francisco CA, on Wednesday, December 14, 2016. 1 of2 A customer's car is photographed in a photo studio space at Shift's headquarters in South San Francisco CA, on Wednesday, December 14, 2016.
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