The ridesharing company Uber began in 2009 and hit a $50 billion valuation in five years (almost two years less than Facebook), disrupting the transportation market, especially taxi business in urban areas. The pandemic has cut into the company, but it remains as an example of how quickly a market can change when software is involved.
Will the “Uberization” of HVAC — allowing technicians to be called directly off an app — become the next disruptive trend?
HVAC Technicians Ordered Through App
Could homeowners request a technician via a simple mobile phone app? Darren Dixon, president of fyxify, believes so. With fyxify, instead of calling several local contractors and choosing one, a homeowner finds a technician by pulling up an app that displays them. Then, the homeowner books one and the technician heads their way at the earliest convenience. Dixon explained that if a contractor has already serviced a customer, they are paired with any future needs that customer has, protecting that relationship. The app also displays customer service ratings for each technician.
“It drastically reduces the amount of time it takes to get service,” said Dixon. “We have multiple examples of customers commenting that within five minutes, they had a qualified technician on the way to the house.”
For the contractor, apps like fyxify take the place of existing operating software that works to streamline management and keep the user interface intuitive. The software also walks technicians through a checklist to make sure a standardized inspection is done.
Fyxify also takes a large burden off the technician to act like a sales person, according to Dixon. The app allows homeowners to see every option for their repair and offers advice through AI on what the lowest cost of operation going forward is. Technicians then go in and perform the inspection and show the customer the recommended options, but they aren’t required to act like salespeople, since the app shows all of the potential solutions and their costs. For those who are interested, contractors can fill out a form on the fyxify site and then go through the onboarding process.
“This is going to give consumers, faster, more reliable service,” said Dixon. “It’s going to take a qualified contractor who is smaller and has availability and promote that technician as an immediate solution for that consumer. Progressive contractors are going to have the opportunity to give flexibility and improvements to the work/life balance of technicians.”
The potential Uberization of HVAC is not the only disruptive business trend that could affect the HVAC industry significantly in the years to come. Monthly subscription models have become commonplace across our economy, from streaming services to software subscriptions. HVAC leasing programs work off of a similar model, as they offer a monthly payment subscription model for HVAC unit replacement. The homeowner makes a simple monthly payment, which covers annual maintenance, repairs, and filters for the life of the lease term. The contractor replaces the unit and is paid in full by the leasing company once the job is finished, and is paid an annual stipend to cover the equipment’s maintenance and repair costs.
“For the homeowner – they get all-inclusive, worry-free comfort for the full lease term (typically 10 years),” said Matthew Bratsis, vice president of contractor service at EGIA (The Electric & Gas Industries Association). “The contractor, meanwhile, gets to offer affordable payment options to the homeowner while they receive a predictable recurring revenue for the full term of the lease.”
In early 2022, EGIA will integrate a leasing solution into its Optimus finance platform, which will give contractors access to loan and lease options for every project and every credit profile within the same platform. Bratsis advised that contractors should identify the costs associated with participating in a leasing program, identify which products can be included in a lease and which cannot, and ensure that the lease company does not restrict what price the contractor can charge for their services.”
Subscription models are growing in popularity, and according to Bratsis, data shows them growing fastest in the millennial market, as well as among newer homeowners who are used to making monthly payments.
“Leasing can provide homeowners with peace of mind, as well as assuage the unease some customers will feel when purchasing a big-ticket item,” he said. In all situations, contractors should offer a variety of payment plans, such as leasing or financing, instead of pre-judging customers and only offering services the contractor thinks will appeal to them.
Third-Party Property Management
As the HVAC marketplace evolves, contractors need to remain agile and adapt to any new disruptive technology. Colleen Keyworth, director of sales and marketing for Contractor’s Online-Access and vice president of Women in HVACR, said that trying new things and adopting technology changes early is key.
“The early adaptors are the ones that are going to get the business out of it,” she said. “Even if you're the early adapter in your small town market, that may be the only edge you need to literally own your service area.”
One business management technology Keyworth sees as significant is third-party property management software. In these models, a property manager will be able to look at a dashboard of every single of one their HVAC units, and a third party will schedule all of the maintenance with contractors to simplify management. Property managers will still be kept up to date on equipment age and status, and they will be updated on expected repair/replacement costs.
Changes Driven By Customers
Keyworth said that there are potential obstacles to widespread adoption of an app-ordered service model, such as the availability of technicians in the midst of a labor shortage. It could also encourage some technicians to take a lone-wolf model and try to work full-time on their own. But at the end of the day, she said that customers will determine whether a technology like app-ordered technicians, or any technology, is adapted on a widespread scale.
“Customers are going to need to drive this,” she said. “The efficiency, the ease of use, and the lack of having to do any research offers an instant gratification model. If consumers drive the demand, we will do our best to meet it.”