Digitization has changed the way of operating traditional businesses which were considered essential and whose way of operating had not changed in recent years.
Until the pandemic came. The confinement has promoted teleworking and with it different initiatives have been carried out with the aim of being connected. The same has happened to driving schools. A business that has had to reinvent itself due to the state of alarm.
In this situation is Onroad, a digital driving school that began operations in Spain at the beginning of 2020 and that due to the confinement due to the state of alarm saw how the demand did not stop growing. Onroad is a subsidiary of the French company Ornikar, which started operations in 2014 and has since trained more than two million students.
As explained by Onroad’s main advisor, Miguel González Gallarza, driving schools is a sector that has not changed in the last 20 years. “Society has evolved, but the driving school’s value proposition has not evolved and is in a moment of crisis, both for students for whom the card is very expensive and the experience continues to be very traditional and highly regulated, but also for professionals in the sector”, he points out.
Regarding what the confinement meant for Onroad last year, González Gallarza acknowledges that it was “enormous growth and has positioned us at a time when we are the alternative to traditional driving schools, but also being a digital transformation partner for the sector , both for the driving schools that want to go digital and also for the Administration. We want to be a digital transformation partner for the DGT, providing them with data, processes so that tomorrow the driving license experience is a digital experience and accessible to the majority”.
Regarding the way the company operates, the manager highlights that “students sign up online. They start to do the theoretical and we sign them up for the exam. We have a pedagogical follow-up, that is, it is not only taking tests. It is a process where Onroad does the follow-up. If you want to give the practical, we propose a collaborating driving school, where you will have a transparent price, availability of classes on an appointment platform and the teacher assigned to you accompanies you to the exam. We students don’t change their teacher. That way you make sure you have pedagogical continuity”.
Goals for 2021
The numbers after a year of operations in Spain are surprising. And it is that Onroad has managed to train more than 10,000 students through its platform. Of the total, González Gallarza acknowledges, “some have only taken the theoretical exam, others have passed the theoretical exam and are no longer with us and others are doing the practical one.”
Among the company’s business objectives for this year are “reaching 40,000 students by the end of the year, which would mean a market share of 10%.” In addition, we intend to have collaboration with 100 driving schools by the end of the year with the arrival in another 15 provinces”. Currently, the company operates in Madrid, Barcelona, Valencia, Alicante and Murcia and wants a total of 20 to operate by the end of 2021. In addition, they plan to double the number of employees, until reaching 50 workers.
All this after the French parent company, Ornikar, closed last April a financing round of 100 million euros in Series C led by the global investment firm KKR, which makes the majority of this investment through its fund. Next Generation Technology Growth Fund.
Regarding the choice of the provinces in which they operate, González Gallarza details that “we have gone to those that have a large population, that have urban density and a young population. The idea is to continue in that type of provinces that can be Malaga, Zaragoza, Bilbao , since they have that strong demand. Regarding the teacher, what we have in Spain is a very strong disparity between regions in terms of their remuneration. For example, in Barcelona the teachers earn relatively well, but in Andalusia or Extremadura the economic conditions of teachers are absolutely disastrous. We come to increase that net remuneration and then they can decide what level of social protection”.
Falls in the expeditions of the card
The manager recalls that “although in 2009 about a million people got their cards every year, now it does not reach half a million. The demographic pyramid does not explain that, but rather it has been the crisis. And it is that for ten years of crisis, people have not been able to invest that disposable income, which in the end, getting the card still amounts to around 1,200 euros on average”. Regarding the student profile, González points to generation Z, as well as those over 25 years of age.
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