George Muller made a name for himself in automotive manufacturing as the man responsible for the comeback of Cherry Hill-based Subaru of America Inc.

Now Muller, who ran Subaru from 1992 to 2000, heads a company that uses Internet technology to solve pressing problems with a little-known area of car resales.
(article continues below useful links)

Since January, Muller has been president and chief executive officer of Driveitaway.com, a 4-year-old company with offices in the Port of Technology incubator in University City and a renovated property of Muller's in Haddonfield, N.J.

Driveitaway is using online car sale technology to help corporations sell fleet vehicles to employees when it comes time for the cars to be replaced.

The company has struck a deal with LeasePlan USA, one of the largest corporate fleet managers in the country, to launch a program called reDrive. The program gives workers who drive company-owned cars first crack at buying their vehicles when they're about to replaced. If they pass on the opportunity, reDrive makes the cars available to all the workers in the company. It enables buyers to purchase extended warranties on the vehicles they buy, finance their purchases and do the other things they can do at a dealer -- all online.

"We're trying to learn from what people don't like about buying cars and used cars and make it a better experience," Muller said.

Driveitaway gets a fee for each car sold and commissions on warranties, loans and the like. The company has survived on financing from its founders, their family and friends but is looking for venture funding. It employs seven.

Driveitaway originally planned to enable dealers to use the Web to sell used cars they were about to send to wholesale auctions. It intended to set up a site where consumers could bid on those cars and give the dealers a way to auction off the cars on their own Web sites.

Getting started, however, would have been tough. To get enough consumers to come to its site, Driveitaway would have had to sign up a lot of dealers. And to sign up enough dealers to make the model work, Driveitaway would have had to show that its site was attracting consumers.

Driveitaway's current business model solves a problem for everyone involved in the car-fleet leasing business and gives consumers good deals besides.

In the corporate-fleet business, dealers sell cars to fleet managers, which lease them to corporations. When the time comes to replace the cars, the fleet managers take them to the lots of the dealers they are buying the replacements from. The cars typically sit there until they are carted off to a wholesale auction, where they are bought by other dealers. Those dealers then sell the cars to the public.

The process is time-consuming and costly. While the cars are sitting on the lot of the dealer, they are taking up space that could be occupied by the dealer's own cars. The corporations must keep making payments on the cars until they are sold. And the longer the leasing company has to hold on to the cars, the less it can get for them.

ReDrive enables lease managers to sell cars in the fleets they run before the cars are replaced.

"We actually are selling cars before they're even out of the driver's hands," said Bryan Calloway, LeasePlan USA's senior vice president.

The program also enables corporations to look good in the eyes of their employees.

Fleet managers, such as LeasePlan USA, are responsible for everything done to the cars they own, so they keep track of them. Every car listed by reDrive has a complete maintenance record, which makes it less of a risk to buy than the typical used car.

"You can literally go down to how many times the thing was fueled and what grade of fuel [was used]," said John Possumato, one of Driveitaway's three founders, who is also its vice chairman and chief operating officer.

Also, because reDrive cars are sold before they go to auction, get bought by a dealer and get marked up again, they are cheaper than used cars of comparable years, makes and models.

Driveitaway had settled on its new business model before bringing on Muller. Possumato said he and the company's other founders thought Muller would be able to help the business grow rapidly, which it will have to do, since LeasePlan USA manages 400,000 cars. They also thought his marketing expertise would come help the company explain to consumers why its cars are good deals.

Muller, meanwhile, had left Subaru of America. He did some consulting, then spent a year commuting from South Jersey to Manchester, N.H., to serve as president of Segway LLC, the company that developed the self-balancing electric scooter.

Muller began working with Driveitaway last year, joining it full time in January.

LeasePlan USA is testing reDrive with a few of its customers. Assuming all goes well, it plans to make it widely available. It wants to eventually open the program to the general public.

LeasePlan USA has the exclusive right to use Driveitaway's technology in the United States until it has fully rolled out reDrive. LeasePlan USA also is looking at trying to make the technology available to sister companies in Europe.

"Probably the most talked-about topic in our industry at the moment is used vehicle prices," Calloway said. "Any company that has a product or service that can help customers bring higher returns on their investment is going to have a giant advantage."

Copyright © 2004. Philadelphia Business Journal.