Fair's new CEO eyes big market expansion

The new CEO of used-vehicle subscription service Fair says the company needs to expand across the U.S. and offer consumers options beyond a month-to-month commitment.

That could include more services for customers with different used-vehicle needs, such as multiyear leases and loan financing for customers who later want to buy their vehicle, said Brad Stewart, 43, who joined Fair this month after leading XOJet, a provider of on-demand private aviation services.

"We want to be a national player," Stewart told Automotive News. "We want to be in many, many markets — dozens, if not hundreds.

"We want to provide an extensive product lineup that meets our customers where they're at. And all of that is just an extension of the hard work that this company has put in so far."

Stewart takes the CEO slot as the company tries to make its subscription model profitable, something that has been difficult to achieve so far.

Fair operates on a mobile app that allows consumers to drive a vehicle on a subscription basis after paying a "start" fee, followed by a monthly payment.

Roadside assistance, limited warranties and routine maintenance are included.

Fair was founded in 2016 by Scott Painter, who resigned as CEO in October 2019 but remains its chairman. Painter told Automotive News last fall that the company needed a management change to become profitable. That followed a decision in October to lay off 40 percent of its staff.

The company operates only in California and Florida after leaving a number of markets, but Stewart said it must expand over the next year.

Stewart brings a background in private equity and served as a consultant for McKinsey and Co. and Deloitte.

Fair, which purchases its vehicles from dealerships, is a capital-intensive business, Stewart said. Despite raising a "substantial amount" of money to date — including a $385 million funding round in 2018 led by SoftBank — the company needs to pursue more outside funding from more diverse investors to grow, he said.

"Ultimately, we need to have a long-term capital road map that is more refined than ours is now," he said.

Fair's subscription model is attractive to digital-savvy consumers and an alternative to traditional auto loans and new-vehicle leases, he said.

But the company also could provide more flexibility to more consumers, he said, including those looking for a discounted monthly payment in exchange for a two- or three-year commitment on a used vehicle, and those who want to keep their car and need loan financing.

"I think we should not prejudge our customer base to say that everyone's going to be in the month-to-month bucket," Stewart said.

He added that the coronavirus pandemic could slow some of these efforts if customers are not ready to engage with Fair.