[UPDATE, March 10, 2017: In another example of ground transport convergence, Hertz Europe aligned with Blacklane to provide cars with professional drivers. The “first stage” of an international roll-out brought the program to nine European countries. Customers can request airport transfers, limousines and other chauffeured services via direct Hertz sales channels. The company said it’s aiming to provide “increasingly comprehensive transportation solutions.”]
A lot is happening in the B2B ground transport sector, with operators and supporting technology firms converging. Much of the action is in response to transportation network companies Uber and Lyft. When the dust settles, customers will have wider access in more distribution channels to cars and drivers providing pre-reserved and on-demand services.
It will be too late for some players. Ask travel managers about ground transportation and they invariably start discussing the ride-hailing companies. Traditional operators many times are an afterthought.
To be sure, there will be fewer black car and limo operators as the fragmented market consolidates. Among the biggest, London-based Addison Lee recently bought Flyte Tyme, one of the largest chauffeured transportation providers in the United States. There’s also plenty of activity among the industry’s software and platform providers. Some focus on systems integration for operators. Others are marketplaces. A few are both.
When Marcou Transportation Group in January announced that it bought GroundLink and Limo Anywhere, it tied a lot together. Marcou is the parent of Dav El Boston Coach, operator of the largest U.S. chauffeured fleet, according to LCT Magazine. GroundLink uses technology to connect customers with executive black cars, and has an on-demand service running in Chicago and New York. The service is in beta in Los Angeles and queued up for Dallas this summer. Limo Anywhere provides reservations and dispatch software to 4,000 limo and black car operators.
“We are on a dual track,” said Scott Solombrino, president and CEO of Dav El Chauffeured Transportation Network and Boston Coach. That means building global supply for corporate customers and also aligning technology. “You can’t do one without the other,” Solombrino said. “We want the technology, we want the bricks and mortar and we want to own distribution.”
The movement in the market “is really a technology push, with Marcou at the top and Uber at the bottom,” said GoldSpring Consulting’s Bill Knepper. “They are approaching the same market from different sides.” The union between tech firms and the bricks and mortar, he said, is “about scale and taking cost out.”
Pat Charla from limo marketing agency Drive Profit said the on-demand experience popularized by Lyft and Uber “is hitting the big guys much harder” in primary business markets than in secondary and tertiary markets. At the same time, Charla said, “it’s hard for a five-car operator to compete in markets with a few dominant players.” LCT Magazine in 2017 already reported several acquisitions among local and regional operators.
Knepper thinks the industry will remain competitive — for now. “The days are numbered for small operators,” he said. “They are just too vulnerable” since they won’t have much control over technology owned by their larger rivals.
“There is a lot of instability in the marketplace,” Solombrino said. “The market is definitely shrinking. People get squeezed out everyday. We think that trend won’t change.” He said Marcou is carefully picking its spots in “an interesting battle” against the likes of Addison Lee.
Naturally, consumers in any consolidating industry fear higher prices, but Solombrino said Marcou’s growth push isn’t about that. “How can we pull in efficiencies and give corporations compelling reasons to have mandates to not use TNCs?” he asked. “It’s about mobile apps, how robust the back end is and what the front end user interface looks like.” Technology advances, he said, provide an opportunity to “maintain pricing” on a better platform.
GroundLink CEO Liz Carisone, who is staying with the company, said “people are starting to affiliate on networks to get scale. Those that are not, and don’t have access to sophisticated mobile technology,” she said, likely will be left behind.
Several other tech-enabled networks are pursuing greater reach. Like GroundLink, one of their selling points is professional drivers that help companies abide by duty of care obligations. Theirs is another kind of supply consolidation.
Chauffeur service booking platform iCars, for example, on Jan. 1 acquired limos.com, an online marketplace. The combined entity provides on-demand, near-demand and traditional reservations (depending on the market). A B2B portal has admin tools for corporate clients, who can configure the system with preferred suppliers.
ICars has a mobile app, and connections to Concur and the Sabre Red agent desktop. President Ed Silver said the company is working on deeper integration with GDSs and agency back-office systems. “We see players working more closely with each other, empowered by technology,” he said. “They can have single look-and-feel [for user interfaces], be a single merchant of record and realize benefits they couldn’t by themselves as small operators.”
Backed by Daimler, Blacklane is another intermediary. It works with 10,000 professional drivers in 250 cities around the globe. The company recently announced an agreement to connect with reservations platform GroundSpan, which in turn connects to various corporate travel points of sale.
Blacklane’s approach is to direct ride requests — from inbound international travelers, for example — to local providers. Better vehicle utilization at those providers is made possible by the company’s dispatching technology. That means cheaper rates for customers than pricing from separate, individual relationships with operators, said chief revenue officer Sascha Meskendahl.
Blacklane also has tools for admins and a mobile app for travelers. It’s connected with Sabre TripCase and the Amadeus agent desktop. Work is ongoing to integrate with the Amadeus corporate self-booking tools. The deal with GroundSpan brings it to Concur Travel, Sabre (the GetThere booking tool and Red desktop) and Travelport’s GDSs and Smartpoint agent desktop.
GroundSpan works with thousands of operators. It added Addison Lee last month. “That really speaks to the trends in the industry and the new thinking,” said GroundSpan president Tony Bonanno. “Before this, companies like Addison Lee didn’t see the value in third-party distribution.”
Bonanno claimed that new automation and liability concerns related to TNCs has meant “more attention to and consolidation of preferred corporate programs in the ground transportation space than I have seen in my 20 years in the business.” The confluence of factors, he said, has focused corporate procurement and risk management teams on providing travelers easily accessible alternatives to Uber and Lyft.
Bonanno said the company is working with a growing number of TMCs outside the United States as more corporate buyers try to globalize ground programs.
Meanwhile, six-year-old Mozio is a bit different. It brings together various transport options ranging from black cars from Carey International and on-demand services to taxis, airport shuttles, rail and even public transport. Heathrow Express and Supershuttle are participants. Mozio is aligned with Carlson Wagonlit Travel, which is an investor along with JetBlue Technology Ventures and others.
“Local transportation will always be multi-modal. You need a healthy combination of options to help navigate that,” said Mozio CEO David Litwak. He said no other corporate travel tech intermediaries are addressing public transit, “yet tons of companies have policies saying use public transit” when it is reasonable to do so.
Mozio is piloting a booking portal for agencies and end-user corporate clients. It includes traveler profiles. An iOS app is about two months out, with one for Android expected a few months later. While integration with GDSs is underway, Litwak said the bigger priority is aligning with agency back-office systems.
Describing how clients may choose to configure the system, Litwak said some “want to use this particular company if a car is within five minutes. If not, hail a different company.”
Deem is another company with designs on boosting its ground transportation service. A few months after the company acquired hotel tech firm Olset, it moved Olset’s founder and CEO Gadi Bashvitz into the lead role at Deem’s Car Service.
Bashvitz said Deem now is determining how to balance the three “pillars” of its ground transportation services: supplying back-office systems (it acquired Whisk, a provider of that technology, about a year ago), aggregating supply from operators and their affiliates, and staking a claim in the on-demand market.
Bashvitz said there is plenty to consider in terms of providing sufficient inventory, making consistent the user experience and evaluating features related to ride tracking and creative uses of global positioning system technology.
Deem’s car service can connect to other online booking tools and travel agent systems. But Bashvitz said one Deem advantage is that its core travel booking platform pairs nicely with the car service side of the house. He talked up the idea of car attachment — similar to hotel attachment — whereby travelers are encouraged to add ground transportation to the various legs of their trips.
Bashvitz noted that in the February release of the travel booking tool, car reservations now are integrated into passenger name records. As a result, if a traveler’s flight schedule changes, the car service reservation can automatically update.
Deeper behind the scenes is Gridd Technologies. It aims to be the glue linking disparate dispatch systems. The idea is to help operators and affiliates communicate and better share passengers. CEO Amir Zafar said a customer of one operator would book through, say, that operator’s mobile app and be picked up by a car from a different operator. “To them it feels like a worldwide network on the same technology even though it isn’t,” he said. “The more access to inventory and partners, the better. It allows different networks to become bigger networks.”
This means that, for example, a car dropping off a passenger at the airport is available to accommodate a partner’s client who is just landing.
Users of Gridd’s Gnet platform include reservations and dispatch software providers Fasttrack and Livery Coach. Drive Profit’s Charla, a Gridd partner, said those companies are sending and receiving pre-reserved ride requests, as are a few players in Europe. LimoAnywhere is in beta on the Gnet platform.
Charla remarked on how the tone among these players and others has become more friendly in the past year. “They know it is the way to stay relevant,” she said.