Wednesday, 8 April 2015

A Curious Thing About The Hand Car Wash

I caught a part of what seemed like an interesting discussion on the radio yesterday lunchtime - about the number of Hand Car Wash businesses springing up all over the country. The discussion, hosted by Jeremy Vine, was between two economists - professor Mike Haynes from the University of Wolverhapton, and Duncan Weldon, the BBC's Newsnight economics correspondent - and they both seemed pretty stumped as to why Hand Car Washing services are taking off with such prominence when by now machines should be doing all the work. I don't know why they were so confused - the answer seems to me quite obvious - but before we get onto that, let me briefly explain why such an issue is interpreted as a problem.

On first inspection, generally what's happening with Hand Car Wash businesses is the opposite of what happens everywhere else - as we usually tend to see technological progression instead of retrogression. For example, you wouldn’t see us ditching our washing machines to return to washing our clothes in the sink; you wouldn't see us choosing to cut our grass with shears instead of using the lawnmower; and you wouldn't see us ditching the vacuum cleaner in favour of using a dustpan and brush to get bits off the carpet.

Similarly, with the current technology of car wash machines in garages, technology should have brought about the gradual diminution of the culture of washing cars with a bucket of soapy water and a sponge. Further, although there are a few vehicles for which car wash machines are unsuitable (mine being one), from what I can make out car wash machines use less water and are no more expensive than rates charged by Hand Car Wash businesses.

Consequently, then, drivers ought to have very little need these days for five or six guys washing their car - but yet we find the opposite is happening - Hand Car Wash businesses are thriving, with new ones springing up all the time, giving hundreds of (usually) migrant workers plenty of opportunity to work hard and make a living.

Given the foregoing, in terms of rational behaviour, what's happening shouldn't be happening - and this is because of something in economics called the increase in the capital intensity - which is basically a measure of output, productivity and growth, where machines are more efficient for the economy than the equivalent manual work of low paid workers.  

The economists seemed stumped as to why drivers are choosing men over machines. I have a few suggestions that I think probably explain it - and they are all to do with how hand washes have various advantages over machines:

1) You can sit in your car and not have to bother going into the garage to buy a machine token.

2) Machines do not wash every part of the car body in the way that humans are likely to.

3) Machines probably come with the increased risk of body damage.  

4) Many drivers probably feel that in using hand washers they are supporting low-skilled migrant workers instead of giving money to larger corporations.

Number 4 is flawed, of course, because the people who lose out to the competition are the workers involved in making and maintaining those machines. But numbers 1-3 are pretty sound, and number 4 is also interesting because I would hazard a guess that many drivers would feel they have an incentive to pay migrant workers instead of handing over money to larger firms like Shell, Esso and BP. Here's why. Migrant workers making a living are people that are much less likely to commit crime or claim benefits - and even if it's only at a subconscious level I'll bet that's a factor in people's decision to buy their labour. All in all, then, I don't see the increasing rise of Hand Care Wash services as particularly baffling - they seem like a natural market niche that garage car wash machines don't quite fill to the same extent.