It’s Official - Vroom Quits the Ecommerce Used Car Business

Vroom has announced on its news page that it is “...discontinuing its ecommerce operations and winding down its used vehicle dealership business..” Interestingly, Vroom, referring to itself in the third person, called itself  in the same press release, “a leading ecommerce platform for buying and selling used vehicles.” Which, if you read what the company just wrote, is no longer true. 

Vroom is a public company trading under the symbol VRM on the NASDAQ. The stock was once valued at over $65 per share but is now valued at under a dollar. In May of 2021, The Street Reported that Vroom had received positive news from analysts, including from JPMorgan analyst Rajat Gupta. That analyst told The Street that “...after a couple of quarters of missteps on execution, Vroom's latest results and second-quarter guidance provided some comfort that the operating environment is stabilizing.”  The stock hit a steep decline in July of 2021, and settled under $2.00 in April of 2022. It has slowly been heading toward zero valuation since that time. 

Vroom was one of the pioneers of online car shopping. Torque News began tracking Vroom’s activities after one of our colleagues from TFL had a negative experience. Vroom seemed incapable of completing a transaction on a sports car the publication had tried to purchase. 

Our initial story generated a lot of comments from our readers. At that time, Torque News had a captive comments section under each story. Here are some of the comments that were posted which we shared in a follow-on story about Vroom's continued decline:
- “I wish I had visited this website before embarking on the nightmare I’m dealing with.”
- “I’m also experiencing a nightmare situation.”
- “Vroom customer service is a debacle.”
- “...absolutely awful….. it's just inexcusable and downright unprofessional”
- “No matter how many times I call... my issue falls on deaf ears.”
- “The worst service I've ever had buying a car!!!”
- “I can NOT believe Vroom is still in business.”
- “I’ve been on hold for hours and the horrific piano music stops and nothing. No one is there.”

Here are two comments on Vroom's exit from the business:
1) Thomas Shortt, the Company’s Chief Executive Officer, said “As we previously disclosed, we intended to raise additional capital to fund our operations and support the extension of our vehicle floorplan facility beyond its current expiration date of March 31, 2024. Despite significant efforts to do so, we ultimately were unable to raise the necessary capital in the current market. Obviously, we are very disappointed with this outcome. Two years ago, we set out to build a well-oiled machine, improve unit economics and dramatically improve our customer experience and I believe we achieved those goals. I want to thank our dedicated Vroommates, customers and business partners, as well as our Board of Directors and investors, all of whom have supported us over the years.”

2) Robert Mylod, Independent Executive Chair of the Board, said “Although we were unable to raise the capital necessary to achieve profitability in our ecommerce operations, we are committed to responsibly managing our remaining businesses and prudently deploying our capital as we seek to maximize value for all of our stakeholders.”

We will let our readers decide if Vroom’s failure is a result of bad business practices, unfortunate circumstances, or perhaps that the process of buying a used car is more involved than clicking on a shiny one in a pretty color posted on a website. 
 

John Goreham is an experienced New England Motor Press Association member and expert vehicle tester. John completed an engineering program with a focus on electric vehicles, followed by two decades of work in high-tech, biopharma, and the automotive supply chain before becoming a news contributor. In addition to his eleven years of work at Torque News, John has published thousands of articles and reviews at American news outlets. He is known for offering unfiltered opinions on vehicle topics. You can follow John on Twitter, and connect with him at Linkedin.

Top of Page Image courtesy of Vroom PR agency Moxie Group.