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Why are there suddenly so many car washes?

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181–190 of 615 posts

Re: Why are there suddenly so many car washes?

#181
I really hate sounding like a broken record but this is just another instance of how low property taxes and the absence of land value taxes massively benefits low-value businesses.

The real business of car washes is real estate, it's profitable enough to get 3-4x leverage with a low interest loan.

TBH I think real estate used to have high information asymmetry between local residents and large investors; low property taxes and generous loan terms under this primarily benefited small businesses, individuals, etc. I think the internet and increased observability into far away projects erased this (a ring camera costs a billion dollar PE firm and Single home owner the same); now the same policies we have had are allowing easy arbitrage between low cost fed/PE cash and predictable "dumb" business categories; car wash, self storage, etc.

I take pride in the fact I haven't been to a car wash in probably 3 years and have likely gone myself less than 10 times total. Rain and the occasional wet rag is good enough for a depreciating asset.

Re: Why are there suddenly so many car washes?

#182
post #168

> There are four full-service car washes in town, with a fifth on the way; three are bunched up on a mile-and-a-half stretch of Route 14. Social media complaints about car wash overkill spurred town leaders to take action. Four (or even five) doesn't sound that much? What's the actual problem here? How is a local politican supposed to determine what is the correct density of any particular type of service within her…

> If the market were too small, the weakest would fail, right? Right? I find it interesting that we have sayings like this, and sayings like "the market can stay irrational longer than you can stay solvent." > why should a politician need to step in to regulate, rather than letting the market decide? Because the market doesn't price in externalities. Sure the market will figure out which car washes live. But what abo…

While acknowledging the reality of those externalities, it's also fair to point out that empowering politicians to attempt to override the market and deliberately police the negative outcomes of those externalities in favor of supposed social goods (the determination of which is, in itself, problematic) has never, ever worked in the history of humanity -- though it has been tried over and over in disparate societies around the world.

In practice, the politicians supposed to be looking out for the externality damage instead merely redirect outcomes to benefit themselves and their friends. The result is invariably worse than whatever damage is wrought by the open and free market.

This is not a failure or shortcoming of any one particular attempt to corral the market towards social good; it is an inevitable and expected broken-by-design outcome of attempting to do so.

Re: Why are there suddenly so many car washes?

#183

Earlier quoted context omitted.

It is mostl due to the oil and other hazardous materials potentially going into the ground or the city sewer. They can't or won't clean that and it is contaminating in even small amounts. E.g. one drop of oil contaminates 500l of water. At least for Germany.

Doesn't any oil on the road etc end up in the sewers next time it rains anyway ?

Yes but they still degrade relatively quickly when managed correctly so a burst of pollutants whenever it rains is better than a constant low level exposure from people washing their cars all the time.

Regions where it rains frequently like the PNW have rain gardens, vegetated swales, catch basins/filters, and other mitigation strategies all over the place whereas e.g. California might just have them throughout the drainage system like at the end of the LA river.

Re: Why are there suddenly so many car washes?

#184

> There are four full-service car washes in town, with a fifth on the way; three are bunched up on a mile-and-a-half stretch of Route 14. Social media complaints about car wash overkill spurred town leaders to take action. Four (or even five) doesn't sound that much? What's the actual problem here? How is a local politican supposed to determine what is the correct density of any particular type of service within her…

It's just so absurdly naive to think that the market acts this cleanly and quickly, it's probably the worst "brain worm" that economics has given us.

Maybe it helps to consider the idea that the government (which already has considerable influence, positive and negative to markets) is part of how preferences are expressed.

Re: Why are there suddenly so many car washes?

#185
post #118

Automated ones are fine, but what I've really missed since I moved to New England have been the ones where a team vacuums the inside, hoses off your mats, wipes your windows and dashboard inside, etc. Growing up in the West and Midwest, these things were absolutely normal for the first 30 years of my life. Some of them would even change the oil too. But I haven't found anywhere within 50 miles of me that will do it h…

This existed in CA too, haven't seen $30 prices - oil+wash+hand dry... but those prices ended around 2005ish.

Re: Why are there suddenly so many car washes?

#186

I really hate sounding like a broken record but this is just another instance of how low property taxes and the absence of land value taxes massively benefits low-value businesses. The real business of car washes is real estate, it's profitable enough to get 3-4x leverage with a low interest loan. TBH I think real estate used to have high information asymmetry between local residents and large investors; low property…

When you see a solution here of higher property taxes, is it focused on the raw land value or on the value of "improvements?"

I've never been a fan of taxing the value of raw land, mainly because it creates incentives for destroying natural land and extracting as much value as possible from the space. Taxing structures based on the expected economic value can make sense, though even then if its a business there are more direct ways to tax the business's realized revenue or profits.

Re: Why are there suddenly so many car washes?

#187
post #168

> There are four full-service car washes in town, with a fifth on the way; three are bunched up on a mile-and-a-half stretch of Route 14. Social media complaints about car wash overkill spurred town leaders to take action. Four (or even five) doesn't sound that much? What's the actual problem here? How is a local politican supposed to determine what is the correct density of any particular type of service within her…

> If the market were too small, the weakest would fail, right? Right? I find it interesting that we have sayings like this, and sayings like "the market can stay irrational longer than you can stay solvent." > why should a politician need to step in to regulate, rather than letting the market decide? Because the market doesn't price in externalities. Sure the market will figure out which car washes live. But what abo…

The ones that don't get torn down and replaced with something else. no big deal so long as you allow people to try things and fail.

The irrational market isn't a problem for politicians it is for investors: people with money, let them learn their lesson. As for the jobs lost, at least the rich investors paid them while the wash was running, they will move on. The jobs are not high skill so no real loss when they are gone.

Re: Why are there suddenly so many car washes?

#188

> There are four full-service car washes in town, with a fifth on the way; three are bunched up on a mile-and-a-half stretch of Route 14. Social media complaints about car wash overkill spurred town leaders to take action. Four (or even five) doesn't sound that much? What's the actual problem here? How is a local politican supposed to determine what is the correct density of any particular type of service within her…

> why should a politician need to step in to regulate, rather than letting the market decide?

If we taxed land, then sure, we'd get efficient use of land. But we (mostly) don't, so here we are, surrounded by car washes and parking lots.

Re: Why are there suddenly so many car washes?

#189

This is a big thing in the UK, too. The official narrative here is modern slavery with undocumented migrants. It's the same with sex work, with which is harder to separate between conservative propaganda and reality. I expect the main difference between the US and UK versions are that the latter are typically set up in disused urban plots with pop-up tents and temporary chain-link fences rather than having any invest…

In my specific region of the US, you're more likely to see something between a small 'automated' facility where your car is pulled along a sort of 'assembly line'[0][1] or a somewhat larger 'DIY' car wash where you might have to do your own start stopping or are practically given a squeegee cleaner, some colo(u)red water that may or may not have cleaner, a mounted pedistal shop vac of some sort, and a race against the clock based on how many quarters you put in.

Or, sometimes a combination of the two.

The setups for the DIY shops are usually fairly cheap IMO (Just looking at what's going on at them and the BOM) and the main thing outside of market saturation is having a good ingress/egress setup (If one sucks to get in and out of, folks won't come back.)

That's not to say that there aren't hand car washes as well, however I only tend to see those where I grew up (not too far from here, mind you,) or when it is some sort of school/church/etc fundraiser.

The weird thing you can run into in some cases, even at the automated shops though, is either weird 'implied consent' about extras by folks on one end or another of the line, or in the case of any of them, 'memberships' that are priced to where you'd really be following that 'one wash a week' rule to get your money's worth.

[0] - Often with a warning that they are not responsible for damage to vehicles older than X years and/or with more than Y miles

[1] - These can be surprisingly small, to the point some gas stations have one on the side and a purchase gives a 5/10c discount per gallon. Which, to the general point of 'pennies on the dollar' they made money on long term.

Re: Why are there suddenly so many car washes?

#190
How does an article like this not mention that if you rent you probably don't have a water spigot and area you can wash your own car. I'm not saying this is causal, but it seems like a reasonable question that I'd want addressed. Is it related? Bloomberg has not previously been shy about discussing the decreasing rate of home ownership and renting.
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