Anika Begay
Serial entrepreneur Scott Painter’s plan to create an all-electric vehicle subscription company called Autonomy didn’t pan out. So he’s returning to what he calls the “hardest build” of his career.
While Autonomy will continue to operate the small fleet of 1,000 cars it has assembled over the past few years (a far cry from its stated goal of 23,000), Painter is creating a new company called Autonomy Data Services, or ADS, he told TechCrunch in an exclusive interview.
The new company will provide a software and data platform to automakers that want to run their own subscription services for electric, gas, new, or even used cars. Painter also says he’s in talks with car dealers, fleet operators, and even companies that sell construction and farm equipment but might want to offer subscriptions. He says an early version of the service is already generating revenue.
Painter says ADS is in talks with several automakers, including three that have operated their own subscription service in the past. The company is partnering with Deloitte to operate the service; ADS will receive a share of the revenue as a software-as-a-service provider, while Deloitte will charge automakers (or other customers) to customize the platform.
It’s another reversal for Painter, who has had a rough few years. After stepping down as CEO of car dealer TrueCar in 2015 (a company he founded in 2005), he created car leasing startup Fair, which received more than $300 million from SoftBank. That ended badly, with early investors accusing SoftBank of running the company down and Painter ultimately stepping down as chairman in 2021.
Even his latest change was not easy.
To make all this happen, Painter first had to convince Autonomy’s investors, some of whom were left reeling after the subscription service never took off as promised.
“Our creditors had what’s called senior secured status; they could have shut down the company and tried to liquidate the fleet” to get some of their money back, he says. But he worked with them to convert $32 million of Autonomy debt into ADSs.
He also says he had to “do some serious digging himself,” selling a $6 million beach house on Pacific Coast Highway, mortgaging another property and “selling a bunch of stuff I didn’t want to sell.”
“It was the hardest time I’ve ever had as an entrepreneur,” he says, describing the whole process as “hugging a cactus.”
A six-figure acquisition for data
Autonomy was already struggling last year, when Elon Musk’s aggressive price-cutting destroyed the value of the small, mostly Tesla fleet. (Painter, who knows Musk personally, says he tried “to get Elon to understand how important it is to be more predictable about discounts,” but to no avail.)
The problem this time is that almost every major automaker has already tried subscription services. And almost all of them have abandoned the idea.
Painter says this happened because automakers “didn’t have the loyalty or understanding of how subscriptions were going to work.” Because all those automakers’ subscription services were brand new, he says, they didn’t understand how customers would behave. Would they subscribe for just a few months? Or a few years?
Without this information, Painter argues, it’s really hard to set prices, which is why automakers have charged so much for their subscription services, which has scared off buyers.
That kind of insight is one of the things he aims to deliver with ADS. And it’s not just from Autonomy’s customers. Painter quietly bought the assets of failed used-car marketplace Shift Technologies earlier this year for less than $1 million. In the years before its collapse, Shift had purchased Painter’s former car-leasing startup Fair, which itself had previously acquired Ford’s Canvas subscription service, bringing the remnants of its former business back under its ownership, and Uber’s Xchange leasing service.
Data from all these companies can be used to predict “how long people stay in their cars based on their customer cohort, what their FICO score is, how much income they have, and so on,” Painter says. That’s important not just because it provides certainty, but because the flexibility of subscription services is attractive to customers with lower credit scores.
In addition to customer data, Painter says he has obtained all source code, patents, trademarks, compliance, and legal “work product” from those defunct companies, which he says should make it much easier for ADS to get up and running with customers in new markets.
In total, he says he got more than a terabyte, jokingly calling it an “incredible avalanche of s—.”
“My IT guys were like, What are you doing with all this stuff? It just kept coming,” he says. But, he points out, the companies that generated all this data “collectively spent almost a billion dollars developing software” that he now owns and uses at ADS.
“I mean, when [SoftBank CEO] “If Masayoshi Son finds out that I managed to buy all of Fair’s intellectual property rights and assets for less than a million dollars, it’s like, well, he’ll kill him,” he jokes.
And while he’s raised $2.5 million to fund the effort, the work isn’t done. “We’ve done everything we need to do to make [ADS] an investable business. We are currently just looking for an equity partner to put in between $5 and $100 [million] and $8 million,” he says. “That will give the company two years of leeway to continue to grow with Deloitte.”
