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Motor Vehicle Towing Services

Motor Vehicle Towing Services

Brief Excerpt from Industry Overview Chapter:

Companies in this industry provide towing services for light or heavy motor vehicles; they may also offer other roadside assistance and vehicle storage services. No major companies dominate the industry.

COMPETITIVE LANDSCAPE

Demand is driven by the average age of the US motor vehicle fleet, the rate of automobile accidents, and parking enforcement by private landowners and municipalities. The profitability of individual companies depends on effective marketing and efficient operations. Small companies can effectively compete with larger ones, because there are few economies of scale in operations. The US industry is highly fragmented: the top 50 companies account for about 15% of revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Towing services primarily consist of consent and nonconsent towing. Consent towing usually involves towing a consumer's inoperable vehicle to a designated location, such as a repair facility. In consent towing situations the consumer orders and pays for the towing. Nonconsent towing generally is ordered by law enforcement or private property owners and is paid for by the vehicle's owner. Vehicles are usually subject to nonconsent towing if parked in clearly marked tow-away zones, or after an accident. Prices for nonconsent towing are usually higher than for consent towing, as nonconsent towing is not subject to consumer choice or price negotiation. Nonconsent towing can also involve additional services such as vehicle storage or cleaning up debris after an accident.


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