The dealership's silent profit driver — and how it's changing

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At the heart of every dealership is its fixed operations department aka the service center aka the engine responsible for around 50% of a dealership’s gross profit. And the people fueling that engine? Auto technicians.

But here’s the problem: skilled techs are hard to find, and keeping them around isn’t easy. On top of that — WrenchWay’s latest Voice of the Automotive Technician Survey shows that techs are growing even more dissatisfied with their employers.

So, what do auto technicians really want from their shops, and how are some of the top dealerships meeting those expectations? After talking to dealers, fixed ops consultants, service directors, and even a master technician — here’s what I learned:

The obvious: compensation has to be better than “fair.”

When it comes to pay, most dealerships stick to two main options: hourly/salary or flat rate. Hourly techs enjoy predictable paychecks, but flat rate offers unlimited earning potential — if they are productive. 

The catch (or benefit)? They only get paid for the billable hours of work they complete. 

It’s a system built to reward efficiency and the go-to pay structure in the industry. Some dealers sweeten the pot with a guaranteed minimum, but with many offering similar deals, the fight to attract and keep top techs is intense.

That’s why a Ford Service Director I spoke with in the Northeast — offers performance bonuses on top of flat rate pay. Hit 50 production hours in a week? That’s an extra $300. Reach 60, and it jumps to $500. Nail 70, and that's $750 in weekly bonuses. 

But he also offers above-market pay right from the start. After meticulously researching competitors’ rates — say, $50 an hour for a transmission tech — he’ll go higher, offering $60 or $65 instead — right from day one.

His logic? It shows techs off the bat that their skills are truly valued and they are more likely to stay for the long-term.

Another Fixed Ops Director I spoke with, running six rooftops and a collision center in the Midwest, awards flat rate credit for things like service videos, mentoring younger techs (this is a major one!), and participating in training programs — a big deal for first-year techs — often the hardest to retain.

To support entry-level techs further — he pays them an hourly wage on top of their flat rate hours. This gives them 12-18 months to develop their skills and gradually reach 40 production hours per week. 

But whether they are just starting out or have 20 years of experience…

The overlooked: every technician needs a clearly defined career path.

According to WrenchWay, only 29% of automotive techs say their shop has a clear career path — a 9% drop from 2023 and the steepest decline in any satisfaction category.

Sure, pay might matter more to techs, but the dealers I’ve spoken with say a lack of a career path can leave them feeling lost and unsupported. And — techs increasingly want to know what the future holds.

So back to the Ford Service Director I mentioned earlier — he makes sure every new technician has a detailed action plan.

Here’s how it works — the first 90 days are all about basic maintenance, then they dive into electrical systems over the next 120 days, and later tackle suspension work, etc. through classroom instruction and direct one-on-one mentorship. It’s structured and it’s clear. 

Meanwhile, the Midwest Fixed Ops Director told me he starts by evaluating where each tech fits into the shop’s career path: entry-level, Level 3, Level 2, or Level 1 (master tech). Certifications are part of the equation, but he also looks at skills, drive, and cultural fit.

For techs with potential but maybe lacking certifications, his dealership sets up a clear six-month development plan. This includes ASE prep materials, enrollment in training programs, and paid time for webinars. It’s a focused investment to help techs advance quickly — and it works.

Lots of dealers out there are also retaining technicians by simply making their jobs and lives a bit easier...

The innovative: shop flexibility and efficiency are winning over techs.

Four-day work weeks in the service department? They’re still pretty rare.

Gateway Toyota, however, introduced the option years ago and hasn’t looked back. Over 65% of their technicians opted in, and the store’s turnover rate plummeted to under 10%.

The setup works thanks to a three-team rotation, which gives every tech a five-day break once a month — a perk that’s hard to beat.

Speaking of unique perks...

At one dealer group in Texas — robots are taking over a job that used to waste valuable time: running parts. Rosie and M2B2, the dealership’s robotic parts runners, now deliver parts directly to technicians’ workstations — saving 20 minutes and $140 in revenue each time.

And the impact has been huge. Repair cycle times are faster, loaner car usage is down, and the dealership can handle more repair orders overall. As for the techs? They’re already asking when the next robot is coming.

All said and done — today’s techs are demanding more investment, and more rewards for their hard work.

Retaining technicians is not only about pay, but about building career paths with material results, offering flexibility that respects their time, and making their work easier with the right equipment. 

If it wasn’t obvious before it is now — dealers that treat their techs like the dealership’s most valuable assets turn their service department into unbeatable profit engines and offer a better customer experiences.

Courtesy transportation is no longer a nice-to-have.

It’s a need-to-have.

That’s why 80% of dealership respondents agree that providing courtesy rides with Uber has helped retain customers, based on Uber’s survey of 79 organizations in 2023.

With Central, you can request an Uber ride on behalf of your customers, even if they don’t have the Uber app. Car dealerships love using Uber because it’s a simple way to offer white-glove customer service, supplement loaner cars or shuttles, and manage parts pickup and delivery.

Dealers can request one-way or round-trip rides, add multiple riders and locations, set spend caps, and even monitor trips in real time.

Plus, you'll get monthly reports to keep track of everything.

If you’re ready to reduce the costs associated with maintaining shuttles and limit the liability of loaner vehicles, it's time to partner with Uber for Business. And if you plan to attend the upcoming NADA expo in New Orleans, stop by and meet the Uber for Business team at booth #6952.

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• Foureyes: Director, Software Engineering (remote).

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• DLRdmv: Regional Account Manager (remote Texas)

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Thanks for reading. See you on the next edition…

—Car Dealership Guy

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