What Roadside Assistance Can Tell Us About the Future of Local Search

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Woman with Car Trouble on Her Cell PhoneHere’s an industry you don’t hear about often in the technology world: roadside assistance. But what others see as something of a backwater, Chris Spanos, the chief executive at Urgently, sees an opportunity.

The Washington D.C.-based startup has built an application that allows drivers to request and pay for a nearby tow truck or automotive technician, and then track the provider as they come to their destination. The service is one of handful new companies which are working to apply the on-demand model developed by taxi-hailing company Uber to a range of traditionally offline industries.

The growth of these so-called on-demand startups has deep implications for a local search industry, which has grown largely as a horizontal business, spanning multiple industries. By tying traditional marketing services into the largely offline operations of a business, these new businesses could undermine the search advertising revenue of firms like Google, Yelp, and YP.

So far, these on-demand businesses have found their most notable successes in personal transportation. The two largest startups, Uber and Lyft, which allow users to order and pay for taxis through an app, have raised massive recent rounds of financing north of $250 million with valuations creeping toward $1 billion. But the roadside assistance industry offers a telling example of the type of fragmented (and often provincially controlled) industries which these services are targeting.

Spanos, a veteran of AOL’s local business in the late 2000’s, joined the team in 2013 after running Repair.com, an in-home service repair marketplace. Urgently, which began by building a similar tool for home services, has raised a seed round of $500,000 from CIT GAP, and last year bought a towing and roadside service network from an undisclosed company to complete its pivot to the emergency repair market.

“If you think about all of the characteristics of a roadside incident — timeliness and safety are paramount, “said Spanos. Thats really what’s the core of the on-demand experience and we think the experience can be dramatically improved.”

The company is current operating a pilot in the Washington D.C., and plans to expand the service by the end of the year.

Today, the roadside assistance industry is relatively small, generating around $6 billion in annual revenue from towing fees and other roadside repairs and faces a number of headwinds — namely, more reliable cars. Spanos says that towing operations either find jobs through an insurance company’s referral, AAA, or through Google search, where he believes the company can build a nice business.

But for investors, the question is whether this new on-demand model represents a ubiquitous technological shift, which can be replicated across offline industries, or a situational success tethered to the characteristics of the transportation industry.

Sean Moriarty, the former chief executive at Ticketmaster and now CEO at Saatchi Art, said Tuesday that he believed that Uber, and other commerce applications, demonstrate a deeper transition in the local search industry than many think. Moriarty, a board member of booking service Eventbrite as well as YPlan, a London-based startup that allows user to book events through a mobile app, spoke about the transition during an interview at Local Search Association conference in Huntington Beach, CA,

“The businesses that had early success on the web were organizing huge amounts of information and making it available, building a business on aggregation and distribution,” said Moriarty. “What’s changing is immediacy, in which awareness and ease of action allow you to walk in a door of a venue or hail a cab with a button, are really defining these mobile experiences where it’s less about information and more about facilitating an interaction.”

Steven Jacobs is Street Fight’s deputy editor.

(Full disclosure: Urgent.ly co-founder Rick Robinson has been an adviser/columnist at Street Fight.)