Silicon Beach Startup Aims to Disrupt AAA
Well, cross another one off the list.
Today, Honk is unveiling its new service, which it describes as "Uber for roadside assistance." Next time you have a flat tire or a dead battery, open up the app and a tow truck will be on its way. Look out, AAA!
"They've left this space wide open for disruption," says Corey Brundage, Honk's CEO. "The younger generation has no brand affinity with AAA whatsoever."
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Honk does not charge a membership fee. Instead, it charges a fee for each tow. If you're the kind of driver who goes years without having to call a tow truck, the service could end up saving you a lot of money compared with AAA.
"We're offering peace of mind without membership fees," Brundage says.
Honk, based in Santa Monica, has raised $1.8 million in seed funding. For the last several months, the company has been partnering with tow companies and says it has 20,000 tow trucks nationwide in its system.
But in going up against AAA, Honk is challenging a well-established brand. AAA has been around since 1902. It's a not-for-profit organization, and is well known for providing hotel discounts, maps and travel services. It even has an app.
Jeffrey Spring, a AAA spokesman, notes that basic membership in California costs $48 a year. (Two higher tiers, which offer longer towing ranges, cost $78 and $104.)
"We try to keep it pretty competitive from that perspective," Spring says.
Honk will charge users a fee for each time they use the service, starting at $49. So if someone needs roadside assistance more than once a year, AAA probably would be the better deal.
Brundage also hopes to appeal to customers who don't have AAA. Drivers who might otherwise call around to tow companies — and risk getting gouged — could use the Honk app and get a guaranteed, up-front price.
Eventually, Brundage wants to expand to offer a full range of automotive services.
"If you think of Uber or Lyft as an app you need to have when you don’t have a car, Honk is the app you need to have when you do," he says.
Time will tell whether this is a real problem that needs to get solved — or if AAA solved it back in 1902.
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