Case Study

How Toyota found a loss fighter and gig hero in Animo

The World's Fastest-Growing Fleet

New gig economy services such as Uber, Lyft and Postmates have created job opportunities for many people. However, according to these transportation network companies, up to 40% of drivers who show interest in working do not have a car that qualifies for service. And as many as 90% of those drivers are part-time, which means a weekly or monthly rental is not a viable option. This represents a massive demand for high-quality vehicles that are easy to access for a single shift.

Supply Stems from Financial Forecasting

On the supply side, many automakers run massive personal lease operations. In the U.S. lease penetration averages around 30% of all new vehicles, and exceeds 50% for luxury makes. For large automakers, this means that they may have hundreds of thousands of vehicles coming off lease in a given year, most of which the lender sells to the used vehicle market when they are returned.

The challenge for the lenders behind automotive leases is that they have to estimate the residual value of a vehicle when they calculate lease payments, which typically occurs 3 years before a vehicle comes back off lease. If their residual value estimate is higher than actual market value when the vehicle returns, lenders have a loss on their hands.

 

But what if, instead of selling those vehicles at a loss, lenders could retain ownership of the vehicle and generate revenue on it until market conditions were more favorable?

Toyota Prepared to Capitalize

Toyota Financial Services (TFS), the captive finance company of Toyota, was in a perfect position to explore that question. Not only did they identify residual loss as a top risk to their finance operation, but they were also invested in the ride hailing businesses such as Uber and Grab. Furthermore, CEO Akio Toyoda had embarked on a mission to transform Toyota from an automobile company into a mobility company. In an effort to mitigate the financial impact associated with residual loss, TFS decided to explore new solutions in mobility.

Partnership with the Mobility Experts

Toyota partnered with Launch Mobility to design a mobility-as-a-service (MaaS) solution that could fill a critical need in the ride hail market, generate significant revenue from off-lease vehicles, and be operationally efficient enough to generate a profit. Mike Groff, President and CEO of TFS said, "We are uniquely positioned to meet the needs of drivers who are interested in ridesharing but lack an appropriate vehicle. TFS has the off-lease vehicles, Launch Mobility has the technology, and Toyota dealers have the geographic presence and unparalleled vehicle servicing capabilities."

Toyota and Launch Mobility teamed up to deliver an innovative collaboration called Animo. Launch Mobility developed the Animo software, a car share solution for gig economy drivers. Animo allows qualified drivers to access high-quality, well-maintained cars to drive for ride hail or delivery. Animo is not just providing drivers with access to cars, but also providing them with access to the gig economy. 

In addition to the technology, Launch Mobility deployed its Operations Services practice to manage Animo. Launch Mobility leads all aspects of the operation, from marketing to fleet management and even 24/7 customer support. The team works with participating Toyota dealers to provide vehicle service and support on the ground.

Self-serve Mobility

Animo unlocks massive market opportunities by enabling short term rentals with driver self-service. Drivers can book vehicles in advance or on demand. The entire registration process, including driver license verification, background check and payment of the application fee, is managed by the Animo mobile app. Once a driver is approved, they can search for available vehicles in their area, manage payment methods, make a reservation, communicate with Animo support, and even lock and unlock their vehicle with their smartphone. The entire reservation process takes just seconds. The Animo app is designed to be simple and user friendly to create a seamless user experience. 

Command Center in the Cloud

LM Mission Control provides a virtual command center for the Animo team. This cloud-based tool enables Animo to manage its entire service, including its fleet, drivers, and business conditions. Animo’s support team monitors vehicle condition through real-time telematics. And when a customer contacts Animo support, LM Mission Control gives the team full control to take action. The team can manage bookings, invoices or customer status - whatever it takes to deliver a great customer experience. For added productivity, Animo integrated its preferred CRM and customer support ticketing systems with the Launch Mobility platform. These integrations allow the global support team to provide top notch service around the clock.

Animo features a host of alarms to ensure speedy resolution to any issues that pop up. For instance, when a vehicle goes outside its allowable area, both the driver and Animo team are immediately contacted to make sure everyone is aware of the situation. Another example: if a driver rates a vehicle’s cleanliness below average, the Animo team can have someone waiting to wash the vehicle by the time the driver returns. When unplanned maintenance is required on a vehicle, the Animo team can schedule a task within Mission Control, receive and approve quotes from its service team and track the task’s completion. Operation managers also track business KPIs in Mission Control and can access all the data generated by the program.

In most cases, Toyota’s dealer network is providing vehicle parking and maintenance. Animo creates new ways for dealers to generate revenue and connect with future customers. With thousands of physical locations across the country equipped with service and maintenance capabilities, auto dealers can add a critical dimension to keeping MaaS running in the future. 

Animo has proven a sustainable MaaS business model that can scale to the benefit of OEMs, finance companies, operators and dealers. TFS found new revenue sources for their off-lease assets by deploying them on the Launch Mobility Platform. Dealers have unlocked parking and service revenue opportunities. And in the process, Animo has opened the gig economy to a whole new set of drivers and fulfilled a worthy vision of MaaS: democratized access, sustainably delivered.

 

Learn more about Launch Mobility's Vehicle Sharing solutions.

 

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