
Cherry Is Shutting Down Its On-Demand Car Wash Service - prostoalex
http://techcrunch.com/2012/12/23/cherry-car-wash-shut-down/
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joshfraser
Lately I've noticed an increase in companies that are trying to deal with the
real world, instead of selling software strictly as a virtual good.
TaskRabbit, YourMechanic, Uber, Instacart, Cherry - I love all of them. But
dealing with the logistics of a physical world is really really tough. I don't
envy any of them. Cherry was a great idea, but a tough one to pull off. Good
luck to the Cherry guys in whatever they do next.

~~~
orangethirty
Cherry was not a great idea. Had they done some research (well, the people who
gave them _5.25 million dollars_ to waste away), they would have learned some
very simple things. Disclaimer: I used to own and operate (as in also wash
cars) a successful on-site car wash business. Closed it down because it was a
pain in the ass to run.

On-site car washing (or any other type of on-site auto service (YourMechanic
guys should pay attention)) is very low on margins, and competition is tough.
You have to compete with every 13 year old kid who wants to buy a new
playstation game and will wash cars for $5. You will also have to compete with
every other joe who will basically wash a car for a couple of bucks. So
creating a solid customer list is tough.

There are also logistics issues. Getting a group of car washers who are not
complete and total fuckheads is impossible (I'd say its easier to win the
lottery twice). Cherry tried to circumvent that by having sub-contractors,
which in other words means giving some random joe $5 to wash some car. They
only provided them with some basic equipment. If you have ever washed a car in
the cold, you know that you need more than a fucking soap sprayer and a
sponge. There is a lot of equipment needed to correctly wash a car in diverse
weather conditions. Sub-contractors did not buy equipment because they were
being paid shit. So, getting good employees is impossible, getting good sub-
contractors is like finding out you have a rich uncle who died and left you
money _and_ that suddenly, every hot celebrity out there is hot for you.

There is also the issue that people dont give a shit about cancelling an
appointment 30 seconds before it is due. That plus rain, shady owners trying
to blame you for "missing stuff", and people who smoke. Its just a shitty
business to be in. The only people who manage to do something in that market
are the professional detailers. Those guys do make some good money, but have
to spend a shitload of time on a single customer, and cannot (in most cases)
reliably duplicate their business in order to have any horizontal growth. The
high end market is also very competitive and customer loyalty is very high. No
Porsche owner will have some unknown detail his baby in order to save $50.

Also, I so called this. This is one of those "investments" that makes you go
"huh?".

Edit:

And here I was feeling bummed about wasting $600 on car washing equipment.
5.25 million bucks! Hell, give me $500k and I'll make Nuuton so awesome that
people will say "Google? What is that?" :)

~~~
eps
Wouldn't focusing on owners of high(er) end cars be a way to go?

I know that I don't want a random kid to wash my 50-60-80k car, not do I want
keep using those $8 a pop touchless carwashes at gas stations all the time.
From time to time I wouldn't mind paying $50 to have the car handwashed and
cleaned (but not detailed). Or this is too unsustainable?

~~~
orangethirty
In my local market there is a weird phenomenon. The price difference between
premium and standard clients is around $5. I tested a lot of different price
points, but there was always about $5 difference. Standard customers did also
not want to pay anything above $30 for an exterior/interior wash/cleaning. My
average sale was $20, if which I made about $6 (30%) in net profit. Not bad?
Awful, due to the low volume aspect of the business. I could only do one
client at a time, and spent about 45 minutes on each client. Could only book
around 8 good clients in a day. It was hard work for little money
(unsustainable). Then why did I do it? Because I thought that if I put out an
app for people to use to book car washes through their phones, then I could
scale the business by selling the sales leads to other on-site car washers and
thus removing myself from the hard aspects of the market. I would get $1 for
each lead while not lifting a finger. Problem is the app did not test positive
at all. Not even in the iPhone (premium) market. I supposse it is a local
thing, but I can't change that.

~~~
tgrass
If the margns had been higher, would you have tested other markets despite the
low volume?

~~~
orangethirty
I did, and the bigger margins were just a couple of dollars when all was said
and done. In the end, I was still wasting my time with either option. Not
complaining because I learned a lot from it.

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gregpilling
Disclaimer: I have been in the automotive business for 23 years, not the tech
business.

I have to agree with @orangethirty comments on this page. There is not enough
margin in the auto service business to let this succeed. I have known people
that washed cars professionally in both small high-end detail shops and full-
size car wash operations. The high volume car washes are staffed largely with
people that could not get better jobs - felons, drug abusers, those with no
education or other job skills. The small high end detailers were generally
guys that loved cars and found happiness in polishing a Porsche for an
afternoon. There was an old guy named Al that used to come by my office and
spend an hour on my truck for $30. I don't know where he went, but I miss the
service. You do the math on what his income was per year if he had to travel,
pay for soap and supplies, and then only grossed $30 per hour. My math
estimates that he couldn't be netting more than $25,000 per year.

YourMechanic will also hit this same problem. They promise 30% savings and at-
your-door service. This will run into the same issues. There is not 30% margin
to cut at any small auto repair shop that I have ever dealt with. For those
keeping track, I sold equipment to 200 auto repair shops over a ten year
period. There are many car repair problems that are not fixable in the field.
The bigger problem is that auto mechanics have the same rockstar ninja aspects
as software. The rockstars simply will not be doing brakes in the rain,
outside of your work in the parking lot. Why would they? They can earn $100K a
year at a dealer, there is no way they are going to earn less in your parking
lot. In worse conditions. In the rain.

Ask the question in a different way. Would you prefer to work in a
heated/cooled work environment with restrooms nearby, a break room, a place to
wash your hands, specialized tools and equipment nearby, support staff to get
your parts, queue up the next job, a counter guy to deal with the customer
OR----- would you like to work in the rain, deal with angry customers, no
restroom, not enough tools or equipment with you, doing jobs that become much
harder because of location, etc etc all for 30% less money? You will not get
any talented person to work for you. They have better options. Auto repair is
very talent driven, especially any area that is hard like diagnostics,
transmissions, or solving the problem that the last 3 shops couldn't figure
out.

You wouldn't expect to produce good code in a parking lot, would you?

And then there is the classic problem of auto repair. Once you touch the car,
the customer finds all sorts of things that YOU apparently did even though you
didn't. Scratches, dents, missing items, the list is long and familiar to all.

~~~
artag
"doing jobs that become much harder because of location, etc etc all for 30%
less money" --- our mechanics make $75 an hour flat rate. That's 3x what they
make at their respective dealerships (on an hourly basis). The fact that
master technicians (all 8 ase certs, 20+ years of experience) from mercedes,
ford, nissan and toyota are offering mobile car repair services and have
already finished over 1000 repairs on our platform is probably a good
indicator that not every mechanic thinks the way you do.

I am not claiming that you are wrong or that YourMechanic will succeed (only
time will tell).

p.s. Of the 1000+ cars we have fixed, not a single customer ever came back to
us claiming that our techs made the dents, scratches, stole stuff etc. I am
sure we will one day run into some of those interesting people. I may be
cynical and/or naive, but I happen to believe that most people are basically
good.

~~~
gregpilling
I do hope you succeed. Congratulations on repairing 1000 cars. What sorts of
repairs were they? If you pay your mechanics so well, how does the business
itself make any money? Other questions that spring to mind: What equipment do
they have, what repairs do you specifically avoid, How do you source parts,
what happens to flat rate when the part is wrong? I looked at your website
last week and don't recall seeing this information.

I have not met a shop yet that hasn't had a ridiculous customer complaint. You
seem to be lucky, for the rest of the industry it is always 1% that drives you
crazy. By that math you should have had 10 unreasonable customers by now. I
also believe that people are inherently good. I did $2,000,000 in sales of $50
tools with Snap-on and only ended up with $6000 in bad debt on what where
essentially handshake deals. A loss of $3 per thousand.

Also if you would like to have a non-public discussion, you can email me at
gregpilling @ gmail.com

~~~
artag
All those things you have listed (types of jobs to do, types of jobs to avoid,
sourcing parts, not ordering the wrong parts, making money after paying
mechanics really well) were all big challenges. It took us a while to figure
those things out and now its our competitive advantage. There are still
occasional problems, but we are getting better at it every day. Our model
assumes that 2% of the customers will have unreasonable demands / ask for
refunds etc. Happy to chat anytime art @ yourmechanic.

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aheilbut
They're going to pivot to an on-demand shoe shine service.

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frozenport
When I was 11 my neighbor paid me $7 to wash his car. Is this what Cherry was
about?

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tyrelb
I'm sure they didn't spend all the $5.25m on this business idea - and likely
have lots left. I wonder how they came to the decision to shut it down and
pivot - I think that's they key here that's missing...

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bifftannen
What really makes Cherry that special that it needed or received funding?
There have been mobile detail services for years already. Was it the "startup"
label?

Plus, we really don't need more wasteful services. No way to collect and
recycle the waste water for example. Car washes are just ugly wastes of a
resource we don't have enough of.

~~~
janejane
"No way to collect and recycle the waste water for example." - yeah, but there
was no waste water from the wash. Cherry used a waterless carwash solution
that actually worked pretty well.

My husband was working for Cherry as a second job 3 days a week, and we're
really sad to see it go. The money and hours were decent, and he thought it
was better than being stuck in a coffee shop or something like that for a
second job. He was solidly booked with customers on the days he worked, so I
don't think Cherry folded for lack of customers. I also want to point out that
not all Cherry car washers were social rejects who had no others options for
work except for menial labor... my husband is college educated, we just needed
some extra cash.

I think the real crime here, which no one has brought up, is that Cherry gave
ZERO notice to the washers that it was going to fold up yesterday. We got an
email last night that it was over effective immediately. I'm glad it wasn't
our only source of income, but even a weeks notice to get things sorted out
would have been nice. FU Cherry!

~~~
2pasc
I agree that providing no notice was not great. How did your husband find out
about Cherry and applied for this job?

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ithcy2
[http://www.theonion.com/articles/bankrupt-dotcom-proud-to-
ha...](http://www.theonion.com/articles/bankrupt-dotcom-proud-to-have-briefly-
changed-the,3686/)

~~~
lotsofpulp
The funny thing about that is that many of my friends and I would probably buy
a cheese grater from Amazon.

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hnriot
Dumb idea, but that's the beauty of the free market, if you can talk an
investor into giving their money then good luck to them.

On the specifics of this idea, I wouldn't trust anyone in the carwash business
because of the horror stories about it being the last resort fro felons,
druggies etc. Do you really want those people going through your glovebox?

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pebb
C'mon people! Let's give these guys a break. They had a vision for something
great and they tried their best to make it happen. Not every business
succeeds, in fact almost many fail. They had the guts, the vision and the
nerve to be great.

~~~
rhizome
You should be commended for your backbreaking charity move there, but I'm not
sure there was anything "great" about Cherry's goal. Was it really anything
more than building a better lemonade stand?

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ryangilbert
I'm guessing their system will be in stores for the casual person to buy and
to it themselves soon.

