Talking tech: Interview with Rob Jolly, CEO of Onto
Read time: 7 minutes
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We meet Rob Jolly, CEO of sustainable car subscription company Onto, to discuss the future of electric car ownership and its innovative monthly subscription service.
So what inspired the creation of Onto?
I came from working in the auto industry just when we were beginning to see the first push towards electric cars. I noted two huge barriers in particular that were causing friction in the transition to Electric Vehicles (EVs).
First of all, it was the fact that nine out of 10 people bought their cars on finance – a cost that is particularly high for EVs. This jump in price was so huge that it was deterring people from even considering a switch to an EV.
The second point of friction came from the lack of flexibility with the current purchasing/lease options available to customers. For many, this was the first time people were attempting to purchase their own electric car, and they didn’t want to be locked into a two-, three-, four-year contract before experiencing what an electric vehicle was like to live with first-hand.
And yet, the irony here, and indeed the opportunity, is that while the price of purchase is quite high, the overall ownership costs of running an Electric Vehicle are actually quite competitive. So a subscription model seemed like the perfect compromise.
Industry type: Automotive
HQ: Birmingham, England
Size: 51-200 employees
Type: Privately held
Sub-sector: eCommerce & platform business
What challenges did you face starting and scaling up the business?
I left a relatively comfortable office job with a nice wage and a company car to set up Onto. We didn't initially have any outside funding, so myself and my co-founder Dannan O’Meachair did it all off our own backs. That literally meant us running around doing everything, not quite the comfortable office jobs we were used to!
We had a 24/7 call line, which we took it in turns to man. We were washing and cleaning and kicking the cars out, ready to go to customers. We were managing the onboarding of the cars, and dealing with any issues that came up with customers. It was pretty full on!
Obviously as we've grown and as we've had more and more interest, we’ve then managed to raise venture capital funding. This enabled us to hire an expanding team and start to grow.
The first challenge is very much just having to get on and do it. All the niceties of a stable job fly out the window.
"We've learned a lot as we’ve been growing, especially how important it is to get things right at the early stages: you have to iron out any potential issues so they don’t become a problem at a bigger scale."
Another big challenge for us was the technical side of our business. We have an app to unlock the car - there's no physical key ever given, so it's completely digital. The tech complexity that goes into our solution is something that’s been constantly developing over time, as we try to make it as seamless, secure, and user-friendly as possible.
What does Onto look like today?
Onto is an all-inclusive electric vehicle subscription service. Which means that, for one flat monthly fee, customers get car insurance, maintenance service and even public charge included. It's all without upfront deposit and with only a one-month commitment.
The concept behind the subscription is to make it more accessible, giving people the real benefits of an EV without them being locked in for long periods of time – while realising of course, that once people try an EV, the vast majority never go back.
We launched the business in 2017, starting with a very small fleet of just five cars and growing exponentially, to the position we are in now, where we have a couple of thousand cars on the road. Today we’re the largest electric vehicle fleet in the UK, doubling in size roughly every three to six months.
What talent have your brought on board to help solidify your business and accelerate growth?
We've got a fairly experienced management team. Our Chief Financial Officer, Peter Phillips, has huge finance experience within the automotive sector. He was the global CFO for B2B lessor Masterlease, during a period which saw the fleet double in size to over 200k vehicles and $3bn of assets, followed by becoming Tesla’s European Finance Director.
Our Chief Commercial Officer, Rui Ferreira, has a similar level of experience, including a 19-year career with General Motors (GM) where he held various senior roles, including European Fleet Operations Director. This was followed by 7 years at Hertz International (Car Rental) as Vice President Fleet Remarketing for Europe, Australia & New Zealand. We were obviously keen to bring in a team who had a wealth of automotive experience, but that’s not to say that we’re not looking for the specific experience needed for each of our different positions.
Joe Knowles, our COO, had worked with me at Jaguar Land Rover and was pretty crucial to their electrification drive and compliance strategy within Europe. He now leads our operations in a way that is very tied into his previous experience. But then we also have people like Josefina Garat, our CMO, who came from Eve Sleep where she grew really their marketing channels as Marketing and Analytics Director. They IPOed, and really scaled as a market leading mattress company. So she’s an example of someone with very relevant experience, but who is completely new to the sector.
We try to find people who've been there and done it, but who also demonstrate the ability to come at our business model with completely fresh eyes and fresh ideas. I'm trying to get that mix of positive naivety to do something different and really innovate, mixed in with the experience necessary to cut out the kind of errors you might get through doing everything for the first time.
What impact has COVID had on your business?
We're a one-month commitment service, so when COVID really started taking a hold, it was a pretty concerning time for us. We were worried that everyone would give their cars back when they realised they wouldn’t be allowed to drive as much as they used to – but that didn’t happen, at least not across the board. I think giving people the opportunity to come and go, that flexibility and the security in knowing you don’t have to pay for longer than you need the car, really kept people loyal. In that same vein, where we did have people leaving, we also had a lot of people coming in, having giving up their own long-term vehicle commitments and needing a more flexible solution.
"I think for us, looking at a more macro level, one of the only benefits that COVID has brought is a greater focus on air quality and the impact that we humans are having on the world."
Across the big five European markets, EV sales have been up between 50% and 100% year on year, even with the rest of the automotive market being down quite considerably, about 40%.
Consumer willingness to adopt EVs have skyrocketed, which, combined with the impact the pandemic has had in terms of adapting our daily lifestyles, has very much gone in our favour. People want more flexibility and to feel less tied to financial commitments now. I think we've now really proven that the business model works, no matter what's thrown at it. The long-term signals for what customers want are really pointing towards subscription and EVs as being the two growth areas within automotive in the coming decade.
What are the other main challenges in your sector right now, and how is Onto prepared to face them?
The world is changing, and regardless of the short-term impacts of COVID, we can undoubtedly expect long-term ramifications on what customers expect. For car manufacturers, these changes offer a huge opportunity, as well a challenge.
Let’s talk first about electric. There’s no hiding from the fact that our whole automotive sector will have to transition to electric as soon as possible, while making sure car manufactures can still remain profitable. That said, EVs and hybrid have already overtaken diesel sales in the UK last year. Government incentives and the new legislation coming in 2030 are definitely playing their part, but this isn’t just something that's being forced on customers. We're also seeing a real genuine consumer interest in electric - and the car manufacturers are recognising that they have to make this shift too. All the stars are aligning for EVs to really take off and become our mainstream means of travel.
I think from a wider sector point of view, we're being forced into a digital approach with COVID, but it's something that should have happened long before. Obviously, we're big advocates of going digital, and both subscription and EVs are long-term trends that have just been sped up. They both raise challenges for dealerships and car manufacturers, but the question shouldn’t be so much ‘What will be the impact on current ways of working?’ but rather ‘How can the industry adapt to stay relevant in the new world?’
What advice would you give to those looking to launch a tech business in these uncertain times?
As much as it's a bit of a cliché to say, starting a business is all about hard work and resilience. There will be a lot of people who've gone through very difficult times this year in terms of business continuity, and that’s within startups and bigger businesses alike.
To a certain degree, startups are in a unique position in terms of being slightly more comfortable with uncertainty and what a changing world really means, because it's an environment that they're much closer to in their day-to-day life. But either way, it really is just about being able to knuckle down, stick to your values and have the confidence to know that you'll come out the other side.
In the sense of what startups are trying to achieve, you're never going to get people patting you on the back and telling you it's amazing the whole time, because you're constantly breaking things. You're constantly taking risks, a lot of the timing failing, learning and moving on. So make sure you're resilient and make sure you’re realistic about the journey you're signing up for.
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