An online company that sells used cars out of an automated tower – similar to a vending machine -- is eyeing the Oklahoma City market.
The Journal Record’s Brian Brus reports Carvana submitted a design to the Planning Commission for approval. The plans include an eight-story tower with capacity to hold at least 28 vehicles.
Brus writes customers order the used car online. The vehicle can either be delivered to the customer’s home, or the customer can pick it up at the tower. Customers who choose the pickup option receive an oversized coin in the mail that they then deposit in the tower. Automated machinery will lower the car to the ground.
Jacob McCleland: You're listening to the Business Intelligence Report a weekly conversation about business news in Oklahoma. I'm Jacob McCleland. Today's guest is Sarah Terry-Cobo. She's the Journal Record's senior reporter. Sarah thank you for joining us.
Sarah Terry-Cobo: Hi Jacob it's my pleasure. So great to be here.
McCleland: I want to talk with you today about, and I really can't believe that I'm saying this, used car vending machines. There's a company that wants to open up shop in both Oklahoma City and Tulsa. How does one of these car vending machines actually work?
Terry-Cobo: It's a bit of a novelty but it's a real thing. So Carvana -- think like "car" plus Nirvana -- Carvana, is an online marketplace for used vehicles. You can buy them online and get them delivered directly to your door or you can pick it up at the vending machine which is an eight story tower that hasn't been built yet. You get a security token in the mail, like an oversized coin. Then you take it to the building, drop it in the slot and a hydraulic lift system will lower it from its spot to the ground level. And Carvana officials wouldn't say much about the so-called vending machine when we reach out to them, but they do have one in Austin.
McCleland: So for Carvana, I mean, what's the what's the benefit of doing business this way?
Terry-Cobo: Well one is that it's a marketing thing. It attracts attention. Another is that there's less space that they're taking up, rather than having a large car lot. And clearly their expenses are different if they don't have to have salespeople on the auto lot six days a week so they can focus on addressing customers online and answering questions on the web.
McCleland: Now this is a really big change for someone who's who's looking to buy a car. I mean how are customers able to test drive a car for instance?
Terry-Cobo: Right. So that's a slight hesitation that some people might have. They want to test drive before they buy. But Carvana allows a customer seven days to test drive the car so you've got a bit of commitment phobia. You've got some room to explore things a little bit.
McCleland: Now the Oklahoma City Council approved the design which is for as you mentioned an eight story tower that holds approximately 28 vehicles. What is city staff the folks who will be inspecting this business, what do they, what do they think about this concept?
Terry-Cobo: Well the model is pretty unique and they've never seen a car "lot" like this before. I'm putting a lot in air quotes of course. The zoning codes really aren't set up for something like this. So city workers will have to inspect the lifting mechanism similar to the way the elevators are inspected. And they'll have do a little initial approval and then yearly inspection. But they're really intrigued by the design.
McCleland: So why is Caravana looking at the at the Oklahoma City market in particular?
Terry-Cobo: So they're already in 55 markets and they're adding, the goal was to add about 40 more by the end of the year. And Oklahoma City is of course a very car driven culture. There, Carvana is also looking at the Tulsa market as well. But they're pretty mum on that vending machine concept which is so interesting because that's what's created a lot of buzz on social media, especially since they started way back in 2016.
McCleland: An elevator-based car vendor is is definitely a new development for Oklahoma City but it's not the first time OKC has had a car elevator. I mean they used to be a little bit more common here.
Terry-Cobo: Exactly. So this is kind of a throwback to the 1970s when lift elevators for parking garages were around. And those auto storage towers were common then, says a historian who talked to our reporter Brian Brus for the story. The last one was razed back in 2012 right over on Robert S. Kerr Avenue., what was the City Place building and it had some other names over the years and that was rebuilt as the Sandridge Commons.
Terry-Cobo: Sarah Terry-Cobo is the Journal Record's senior reporter. Sarah thank you for your time. Absolutely. Thanks for having me, Jacob.
McCleland: KGOU and the Journal Record collaborate each week on The Business Intelligence Report. You can find this conversation at kgou.org. You can also follow us on social media. We're on Facebook and Twitter @journalrecord and @kgounews.
The Business Intelligence Report is a collaborative news project between KGOU and The Journal Record.
As a community-supported news organization, KGOU relies on contributions from readers and listeners to fulfill its mission of public service to Oklahoma and beyond. Donate online, or by contacting our Membership department.