[UPDATE, Jan. 27, 2017: Dav El BostonCoach parent Marcou Transportation Group acquired GroundLink and LimoAnywhere. “These companies provide us the opportunity to directly compete” with Uber, Lyft and other so-called transportation network companies, according to a statement from Marcou CEO Scott Solombrino. He noted that implementing auto-dispatch and “geospatial pricing” capabilities will help Marcou offer “the industry’s first on-demand service in the corporate market.” Terms were not announced.]
Denver – Dav El BostonCoach Transportation Network and EmpireCLS Worldwide Chauffeured Services last week announced plans for a new on-demand app. Music Express plans to join. Flyte Tyme is considering it. A bunch of tech intermediaries are pushing parallel initiatives, Deem, GroundLink and iCars among them.
Operators say these developments are more of a response to customer expectations for convenience and expedience than to competitive threats from Lyft and Uber. Those, they say, really are taxi replacements, not proxies for higher-end ground services. Even so, portions of traditional operators’ clientele occasionally use Lyft, Uber or other so-called transportation network companies. Some use them all time. Lyft and Uber also now are expanding into scheduled service.
New on-demand booking options may help travel management pros provide a better experience for their travelers without the risk concerns associated with TNCs. The key question still is whether any one platform achieves a critical mass of supply.
Tim Nichols, Ernst & Young’s supplier leader for global travel, meetings and events, pointed to the problem of extreme fragmentation in ground transport. “The black car industry has been dragged kicking and screaming” by TNCs, he said here at last week’s Global Business Travel Association convention. “There is not a systematic consolidated booking platform. There are things out there that you can explore, but not a one-stop shop that matches the experience of TNCs.”
Heavy hitters in the space, Dav El BostonCoach and EmpireCLS hope to change that. Their new app will allow customers to “order a car within minutes,” according to the companies. They plan to make the app available first in New York City “later this summer.” A U.S. rollout would follow.
During an on-stage discussion at the GBTA convention, Dav El Boston Coach CEO Scott Solombrino called the effort “the biggest consortium of chauffeured car companies ever put together in the world.” The platform, he said, will be “equal or better than [the TNCs], unifying over 1,000 chauffeured car companies.” It would include affiliates of these big brands.
“We may be a dinosaur today right this very second but we won’t stay a dinosaur,” Solombrino said. Lyft and Uber “have invented a new paradigm shift that we want to adopt, but we want to do it under the rules.”
Music Express CEO Cheryl Berkman has been pursuing this type of development for a few years. She was involved in an effort by Deem and the National Limousine Association that went nowhere.
“We all have individual apps for our clients. They work great. Clients use them and love them. But they want a real-time app nationwide,” she said. “That’s something way out of one company’s hold. The sooner the better.”
Flyte Tyme Worldwide CEO Tim Rose confirmed his company has been asked to participate in the Dav El/EmpireCLS initiative. It is now assessing the requirements and expected benefits. “As society becomes more mobile we’ll have to adapt our business models from a more scheduled approach to flexibility,” he said.
DK Consulting Group’s Dave Kilduff said the large operators’ individual on-demand apps pretty much already serve the intended purpose in many markets. The Dav El/Empire project, he said, is more about marketing. However, he did concede that for participants, “if there are any holes or if they are weak in an area, this just helps them get stronger.”
Carey International is a prominent player apparently not involved in this initial phase. At GBTA, Lyft chief business officer David Baga said his company and Carey have had “exploratory conversations” about some sort of cooperation.
Baga appeared on stage opposite Solombrino. He said corporate ground transportation data “is a mess.” Asked if he sees convergence coming among TNC and traditional operator models, Baga said, “There are a variety of different use occasions within a company. They will have a black car company, and they will have ride-sharing company in Lyft. They want a unified experience with data transparency, reporting and being able to dispatch. The market needs and wants us to collaborate.”
As an independent intermediary, Deem has a different strategy. This month it announced new tools as part of its Car Service. For travelers, desktop and mobile apps would offer “the convenience of ride-sharing with the trusted reliability of chauffeured car service.” For operators, Deem offers the Whisk reservation and dispatch management system (acquired in February). Whisk links to the Deem Affiliate Connect network of operators.
Execs acknowledged that Deem executed poorly on earlier ground tech initiatives. Deem VP of car service and travel Mike Daly said aggregating tens of thousands of cars from many operators in big markets to create an on-demand environment is “like herding cats. We’re getting closer.”
Tony D’Astolfo is Deem’s new chief commercial officer. He said that when he worked at GroundLink three years ago, “we were technically able to do on-demand” for participating operators. “They all would have been able to take in rides and farm out rides but they couldn’t get over the competitive threat. It’s a tech play but it’s also getting their head around changing their business, becoming more flexible and convincing drivers to operate differently.”
Putting a client in a competitor’s car just because that car is a bit closer isn’t an idea many operators love. But to some extent, competitors already cooperate. Berkman said Music Express “works closely” with rivals “on many issues.”
Flyte Tyme’s Rose agreed that there’s precedent for collaboration. In client programs with multiple suppliers, he said, the primary oftentimes acknowledges the other program participants.
Kilduff highlighted the challenges. “Who is going to get the ride and who is going to get the revenue?” he asked. “There’s protectionism. You will exhaust your system before you farm that ride out, which is done today with their affiliates. Essentially these guys are saying they’ll make their affiliate networks mutual. Will it be set up operationally and technically to do that?”
Meanwhile, GroundLink has since moved to near-time on-demand. By year-end, it intends to provide cars to customers within 20 minutes in Miami, London, Los Angeles San Francisco and Washington, D.C. It’s planning another 15 markets in 2017. The service already is available in Chicago and New York. Users can see all pricing details before the ride, track their car and contact the driver. They can send resulting e-receipts to Concur. Like others, GroundLink touts supply from global affiliates that use only licensed and insured drivers.
“With all of the buzz surrounding on-demand, ride-hailing services, business travelers want more options,” according to GroundLink CEO Liz Carisone.
Another option is iCars. The company this summer began its B2B service in Austin, Dallas and Houston, following an initial launch in San Francisco. “By year-end we’ll be in all the top 20 U.S. business travel markets,” said president Ed Silver.
Asked how quickly cars get to customers, Silver said it depends on the market. In San Francisco and San Jose, he said, it can be less than 10 minutes. In Austin, it can range up to 30 minutes.
Time Is Short
Given how quickly on-demand services have taken taxi share, one can’t help but think the traditional operators are running out of time. While corporate policies for a long time were “silent” on TNCs, those coming around to decisions nowadays are approving the option more often than not.
William Blair travel analyst Meghan Hartsell has been researching Lyft and Uber for a few years. The Chicago-based finance company recently approved them. Speaking at the GBTA convention, Hartsell said, “We had the same policy that most corporate travel managers had — ‘It’s out there, we know people are using it. We’re just not going to say anything about it.’ We looked at our credit card reports and what we found was astonishing. Our growth between 2014 and 2015 was 6,000 percent for both Lyft and Uber. When we saw that, we realized we could not ignore it.”
After discussing the option with the company’s director of security, William Blair did some testing — first with safety and security personnel. Now, brief policy language permitting the options advises travelers to use common sense. When stepping into the vehicle, they’re told, they should be greeted by name. They should make sure the license plate and the driver match the information in the app. They should get out if they feel uncomfortable.
Ernst & Young’s Nichols said his company’s employee base, with an average age of 28, is using TNCs all over the world. “They are convenient and simple; you get a receipt right away,” he said. “In the black car space, travelers ask, ‘Do I have to show credit card in the car? Some ask me for it and some don’t.’ Frankly, I have had that experience and I run the program.”
Liberty Mutual also allows employees to use TNCs. “Getting buy-in from senior management was not difficult because they were using it already,” said director of travel Michelle de Costa. Getting the OK from legal, too, wasn’t the big challenge she expected. “We worked with these vendors to provide the right level of insurance coverage for our employees,” de Costa said. “We are building good relationships with these sharing economy providers and they have been very responsive.”
The unexpectedly tougher sell, she said, was Liberty’s employee relations department. That was because of the “tremendous amount of information” the company collects on employee TNC rides as compared to taxi rides. “If you are going somewhere and you don’t want us to know about it,” de Costa said, “don’t use the business account.”
Additional info: Both Lyft and Uber have been enhancing B2B programs. Uber for Business has new features that the company says makes it “enterprise-ready.” Users can charge rides to individual corporate cards rather than a central payment mechanism. Admins through a dashboard can flag possibly non-compliant trips. They also can designate a manager to review and flag trips for specific employees. Use of the features adds 5 percent to the fare, but Concur said its customers enjoy them at no charge. Mutual clients will get policy control functions and receive reports.
International SOS announced that “in the coming months,” it will include Uber rides in its TravelTracker tool.