AILSA CHANG, HOST:
There is a kind of business that's been proliferating across America and crowding up small towns. There are now twice as many of these businesses as all the Starbucks and McDonald's in the country combined, and they're a darling of private equity firms. Can you guess what I am even talking about? Car washes - that is right, car washes, people. So what is behind this boom? Well, Patrick Sisson wrote about this for Bloomberg and joins us now. Welcome.
PATRICK SISSON: Thanks for having me.
CHANG: So give us a number here. How many car washes are in the U.S. right now, you think?
SISSON: Right now, industry estimates put it at about 60,000, and they expect that to potentially double by 2030.
CHANG: Double in six years? Oh, my God. OK. And much of that figure - it's due to this recent burst of growth.
SISSON: Yeah.
CHANG: So why are there so many car washes all of a sudden? Like, are people suddenly obsessed with having clean cars all the time?
SISSON: Well, a couple of things. On one hand, there's something that is kind of like a cultural shift. You've seen the sort of I can do it, I want someone to do it for me shift that you've seen in a lot of other industries. Back in 1996, about half of car washes people did in their own driveways or on the street. Now it's about 80% are done at car washes. So that shift has created a huge demand for car washes.
In addition, the revenue of a car wash location has made it a really good investment. Industry estimates suggest a car wash can make about 1.5 million in annual revenue...
CHANG: Wow.
SISSON: ...And so that has created a flood of investment interest, as you mentioned before, in opening and expanding car wash franchises. Like, there's very low labor, and that's one of the big advantages for investors because, you know, you don't have a labor force. It's a lot cheaper. And the growth in a membership model, where you can just kind of go in there and wash whenever you want, has made, again, more convenience, but also made a lot more people want car washes, and the industry just keeps expanding.
CHANG: And then you also talk about this new breed of car wash, the MegaWash.
SISSON: Yes. Yeah, there's a bunch of huge ones, you know, tens of thousands of square feet - the size of, you know, like, a football field.
CHANG: (Laughter).
SISSON: And, again, they are able to just work really fast. They can crank out a lot of car washes. Some of them have dining options and, you know, playgrounds for kids and stuff.
CHANG: Oh, you can spend the whole day at the car wash.
SISSON: (Laughter) Yeah, yeah. I mean, kids might have a lot of fun. I know my kids love going through the automated car wash.
CHANG: (Laughter).
SISSON: They get a big kick out of it. But, yeah, I mean, just the idea of, like, you know, you can really crank out a lot of car washes and attract a lot of members. And that recurring revenue just...
CHANG: Right.
SISSON: ...Really makes the business run.
CHANG: Absolutely. You also talked about how, like, some small towns - they've resorted to banning car washes. It's really that bad. Like, car washes has - they've become this invasive species in some parts of the U.S.
SISSON: Yeah. I mean, I think that might be a little bit harsh.
CHANG: (Laughter).
SISSON: But I think from the perspective of a municipal government - right? - you know, car washes don't create as many jobs, especially sort of the newer, automated ones...
CHANG: Yeah, right.
SISSON: ...Than they did in the past, right? So it's not as much that, hey, these are terrible, invasive species. It's more like, is this the highest and best use of our commercial real estate, right?
CHANG: Yeah.
SISSON: Do we want to have a different business here that might provide more tax revenue or provide more jobs? And yeah, I mean, one of the small towns I looked at in the piece - Streetsboro, Ohio - there were, like, three car washes within about a 1 1/2-, 2-mile stretch of road, right?
CHANG: Wow.
SISSON: So that seemed like a lot of car washes, right?
CHANG: I mean, you got to be really ashamed if you're driving around that town with a dirty car.
SISSON: Right. Right. Yeah. Yeah...
(LAUGHTER)
SISSON: ...Exactly. You have no excuse, no excuse.
CHANG: I mean, it feels like going to the car wash is still such a huge part of the American experience. You mentioned your kids love it. I used to love driving through the car wash and watching...
SISSON: Oh, yeah.
CHANG: ...The brushes scrape up against our car. Why do you think car washes have become such an enduring part of American culture?
SISSON: I think there's a couple reasons. I think we're just - I mean, we're just a very auto-centric society, right?
CHANG: Yeah.
SISSON: I mean, there were car washes as soon as there were cars back in the early 20th century. You also see - especially in the sort of postwar era - a lot of these were mom-and-pop operations. A lot of them had really colorful signs. There's a great chain in the Northwest, around Seattle, that has this big, like, pink elephant, right? So that's very, like, visual, sort of roadside...
CHANG: Yeah.
SISSON: ...Culture, right? And yeah, I mean, frankly, like, I've got a 5- and a 3-year-old at home. They love going through the car wash. They just think it's incredible.
CHANG: (Laughter).
SISSON: So I think there's - all those things kind of come together. And also people, you know, love their cars, so...
CHANG: Yeah. Totally. Patrick Sisson is a contributor for Bloomberg CityLab. His piece is called "Why Are There Suddenly So Many Car Washes?" Thank you so much for coming in to NPR West today.
SISSON: Yeah, thanks for having me.
(SOUNDBITE OF ROSE ROYCE SONG, "CAR WASH") Transcript provided by NPR, Copyright NPR.
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