What do Disney+ and your local car wash have in common?
An unlikely subscription charge is increasingly showing up next to Netflix and Amazon Prime on our credit card statements. Believe it or not, Americans are lining up to buy monthly subscriptions to... the car wash.
Subscription fatigue is hitting Americans hard in the pocket, with the average price of streaming services slowly increasing year after year.
Alongside Amazon Prime memberships, DoorDash premium accounts, and other common subscriptions, there’s a curiously analog industry that’s taking a regular payment out of an increasing share of the population’s bank accounts: car washes.
Car wash memberships have become big business. One of the country’s biggest operators, Mister Car Wash, reported over 2.2 million members of its business in the second quarter this year. Subscriptions now account for 76% of wash sales at the organization, which was bought by a private equity firm before launching an IPO in June 2021.
The benefit of car wash subscriptions for business owners is obvious, said Braxton McKee, an industry analyst at Rinsed. “You’ve got thousands of dollars in the bank account every morning at 6 a.m., whether you wash a car or not,” he explained. “That’s why investors are enjoying that opportunity, and that’s why private equity has come over to the industry.” There has been a new boom in the American car wash industry, with investors including private-equity firms pouring in money and opening up new car washes at a rapid pace.
my local car wash has fully switched to being a subscription service.
— Blake Robbins (@blakeir) November 17, 2024
if you get a one-off car wash, it is priced to be $1 less than their unlimited monthly subscription.
Previously, car wash customers were a fickle bunch, said McKee, who used to run his own car wash business. “Car washing used to be a one-time service,” he explained. “You would go and you would pay 5, 10, or 15 bucks, and you would get a single car wash, and you would leave and have no other attachment to that business.”
That wasn’t good for predictable cash flow.
“Your revenue is basically based on the weather,” McKee said. “If it rains for three days, no one washes their car. You make zero dollars, but you still have employees that you’re staffing at the site.”
Today, according to Rinsed data, most car wash chains aim for a 70-30 split between memberships and drive-up customers. And with Rinsed analysis suggesting the average customer spends $440 on car wash subscriptions across the lifetime of that membership, that can be big business. Bank of America card spend data indicates second-quarter spending on car washes increased 5% from the same period a year earlier.
I’m determined to keep our minivan clean, so I got a subscription to a local car wash (unlimited washes for $20/month) & not only is my van much cleaner, but we now have a relatively inexpensive outing/form of entertainment for the baby & I think this is my greatest mom move yet pic.twitter.com/Aw2reYe8n8
— Katie Prejean McGrady (@KatiePMcGrady) September 2, 2021
That’s good news for operators. “We’ve helped shift consumer behavior, transforming car cleaning from a relatively infrequent service into part of their weekly routine,” John Lai, chairman of the board, president, and CEO of Mister Car Wash, said on the company’s second-quarter earnings call.
Quick Quack Car Wash, a business with more than 250 locations across the US, mainly on the West Coast and in Texas, adopted the subscription model around 2008, said Travis Kimball, a founding partner and chief experience officer at the company.
“The industry was, at the time in the US, was really not sure what to do with it,” he said. But the idea of a car wash subscription tapped into the convenience that customers wanted. “People are less inclined to wash at home,” Kimball explained. “It’s kind of the ‘do it for me’ mentality of the convenience of modern society.”
When customers subscribe to the service, they tend to use it — meaning they’re cleaning their vehicles more often than they would if doing so by hand. “With the recurring subscription model, the customers will realize it doesn’t matter if it’s a rainy season, because I can wash and keep the car clean, regardless of what weather might come,” he said.
Even with increased volumes of vehicles — Rinsed’s McKee says that his firm’s customer relationship management software tracks more than 10 million members across 3,000 car wash locations — the benefits are clear for businesses. “From a cash flow standpoint for the business, it just evens it out and it makes it predictable,” Kimball said.
The subscription revenue is helping companies consolidate in the fast-moving space. Whistle Express recently closed the purchase of a competitor, Take 5, to reach 530 sites in 23 states. Another, Tidal Wave, is currently at 290 locations, while WhiteWater Express lists “over 125 and growing.” Express Wash Concepts made the 2025 Inc. 5000 list with 119% three-year growth.
But not everyone is successful. One operator, ZIPS, filed for Chapter 11 bankruptcy in February and emerged from a restructuring in May.
Lai touched on troubles in Mister Car Wash’s latest earnings call. “Operations matter and that customers don’t see all car washes as the same,” he said. “We believe we’re at an inflection point in our industry’s life cycle, where those that grew too quickly without the operational capability to deliver a consistent customer experience are starting to fall behind the stronger operators.”
Despite consistently climbing revenue numbers and generally solid profits, Mister Car Wash’s stock has also languished since its IPO. The stock is down 23% in the past year alone.
Quick Quack’s Kimball argues that car wash memberships are just the beginning of an encroachment of everyday services into the subscription model. “It’s an obvious interesting shift in things like haircuts and grooming or beauty services,” he said. Pet services, including dog walking, could be another area ripe for revolution, Kimball added. “It’ll be interesting to see what drives which models and where consumers are willing to spend on a monthly model or not, but it certainly seems to have worked for the car wash industry.”
There are also laundry subscription services like Rinse (not to be confused with Rinsed, the aforementioned car wash analytics company), which has expanded its footprint by 50% over two years into new metro areas. Rinse doesn’t operate in a vacuum: Poplin, which used to be known as SudShare, also has coverage in 48 states and 500-odd cities, while Tide Cleaners runs monthly plans through stores and college campuses.
The car wash industry’s experience suggests that once people get used to paying a monthly fee for a service, they don’t give it up easily.
“We’ve slowly gone from a more discretionary thing to a more essential one, in my opinion,” said McKee, whose research shows that a member who washes their car at least twice a month for 3.5 months is 3x to 4x less likely to churn out of their subscription.
“The convenience of it adds to just making it a really simple addition to what people consider their monthly needs,” Kimball said. “You’ve got your Netflix subscription and your car wash subscription, and those are things that people value.”
Chris Stokel-Walker is a UK-based journalist. His latest book is “How AI Ate the World.”