“There is a spectacular amount of innovation coming into the industry and with it considerable new thinking about the future of travel as a whole,” says Gary Kessler, president and CEO of Carey International, Inc. in Washington, DC.
Kessler says he believes this is an exciting time for the chauffeured transportation industry. “Rapid advancements in technology – especially mobile technology – combined with new distribution models are changing the way we think about ground transportation and allowing companies to deliver services in innovative and exciting ways.”
As a result, access to chauffeured transportation solutions is expanding into new markets. Chauffeured transportation is viewed as appropriate in more situations and attracting a growing number of users all over the world beyond the traditional business traveler.
“The industry generated over $3 billion dollars in revenue last year and has been growing at a steady 10 percent rate for the past 5 years – those same 5 years in which Uber and other TNCs came into prominence,” says Patrick Grady, founder and CEO of Deem, and the San Francisco-based Deem Car Service, which is the online and mobile reservation network for the chauffeur transportation market.
Grady notes that the industry has recognized that it has fallen behind the technological curve but as a whole is not nearly as weak as many feel. “The industry is behind the 8-ball from a technology and efficiency standpoint but really not that far,” he argues. “We’ll have them fully caught up in 2016 and I believe we’ll see massive growth across the industry once Deem’s real-time network is fully populated and rolled out.”
Uber and Lyft have helped to refocus the ground transportation industry when it comes to the business traveler, Grady says. “The world has become more rushed, making convenience and ease-of-use of paramount importance. The industry has realized that the old way of doing business simply isn’t realistic any more and that a real-time network with massive coverage is now table stakes for ground transportation,” he says. “But those who are calling the TNCs ‘industry killers’ are incorrect.”
Max Crowley, lead for Uber for Business, says the company was started to fill the gaps in the pre-scheduled slate of black cars and limos, making the experience easier for customers, and millions of rides happen each day thanks to its innovative mobile solutions. More recently, the company has turned its attention to the business traveler.
“We saw there was usage in the business space and we found lots of organic business rides happening. We are already doing millions of business rides each week on the platform,” he says.
“Uber for Business started last August and we’re starting to work on products that appeal to consumers and the companies themselves,” Crowley notes. “We’re continuing to build products that make it easier for the end user or traveler to ride and easier for the business to manage and get insights and make the experience seamless across the board.”
Amit Patel, director of enterprise strategy at Lyft, says corporate travel spend is shifting towards an increasingly mobile experience which has unlocked a new set of ground transportation suppliers, including Lyft.
“The smartphone is such an essential tool to business travelers, that we’ve seen they increasingly can’t imagine booking rides or organizing ground transportation expenses without it,” he says. “Increases in employee demand and unmanaged travel spend is catching the attention of travel managers who are becoming more receptive to integrating ridesharing services into their travel policy.”
Data from expense management provider Certify shows that 57 percent of business travelers opted to use ridesharing instead of traditional black cars and taxis this year. Patel feels that the convenience of a ride within minutes, paired with a cashless, digital-receipt transaction, is a big reason for the growth of ridesharing usage amongst business travelers.
Grady maintains the initial response from the traditional providers to these upstarts was badly fractured and doomed from the start. “Many operators did recognize the need for a technology solution, particularly a mobile technology solution, for ride reservations. But the approach was largely to build homegrown applications, white label an existing ‘solution,’ or join one of the several small networks that never came even close to the scale and density required for reliable, convenient ride hailing,” he says.
New Solutions
The National Limousine Association (NLA) and its members were the first to jettison this individual or small-network approach. They recognized that to achieve the scale required to deliver a real-time network that would meet the standards for mobile technology set by the TNCs, they would have to enter into a sort of cooperative competition, or ‘co-opetition,’ with a network open to all operators.
“They met with a number of technology providers, did their due diligence and on July 28 signed a strategic technology and marketing alliance with Deem to develop and deploy Deem Car Service,” Grady says. “Deem is leveraging its $200 million investment in its one-of-a-kind cloud and mobile platform to deliver a highly-scalable real-time network and mobile application, Deem Car Service, effectively leveling the technology playing field against the TNCs.”This technology solution will allow the industry to focus on its core strength of delivering safe, high quality service worldwide while corporations will be able to combine Duty of Care with savings, and business travelers will enjoy convenience, safety and service.To date Deem Car Service has signed more than 100 operators, including over half of the top 100 operators by volume.
However with more and more players coming into the market, ground transportation companies need to keep an eye on more than just Uber and Lyft, according to Liz Carisone, CEO of GroundLink. In 2009 GroundLink bought a mobile app for on-demand and scheduled travel, which has been upgraded ever since.
“The neat things we are bringing to the market that are responding to the customers’ needs are the offering of e-receipts, as well as the ability to communicate with us 24/7, which can connect travel arrangers and travelers to all of their arrangements and history as well as allow them to book rides and create profiles and preferences,” she says. “We’ve also upgraded our dashboard and a lot of our features on the web and mobile have been upgraded, and we will continue to make these enhancements.”
A GroundLink survey last year found that a large number of business travelers are concerned about Duty of Care and liability, and Carisone feels that’s where the ride sharing companies really need to up their game.
“One in five corporate customers has a managed travel program and I think as stories come out about these ride sharing companies, Duty of Care will become more prevalent,” she says. “Another is price transparency.”
Keeping Up With The Changes
Technology-enabled hailing apps have certainly been at the forefront of conversations about chauffeured transportation, but for managed travel the real news is the direct integration with automated booking and expense management tools.
“Modern corporate travel programs require seamless connectivity between their chosen tools and their suppliers,” Kessler says. “Third party switch technology and swivel-chair solutions used by chauffeured transportation suppliers are failing to satisfy corporate travel programs’ demands for greater access to real-time information.”
Carey International has invested considerable resources in the ongoing development of its own robust API, and are aggressively courting direct connectivity with travel automation tools to provide the best possible solutions for managed ground transportation programs and their travelers.
“Mobile technology has created a new set of expectations on the part of travelers. The driving force is an expectation of personalized empowerment and autonomy – the traveler wants control,” Kessler says. “In the chauffeured transportation industry, this has meant the ability to create and manage itineraries in real-time, anytime and anywhere through a mobile device.”
“People who are in managed travel need data and need it to be aggregated in a way they can use it to better manage their own program and ensure people are compliant with what their companies have arranged for them,” says Scott Solombrino president and CEO Dav El Chauffeured Transportation Network. He says his company has ramped up its mobile applications, not as a response to Uber and Lyft, but as a response to what’s happening in the travel industry across the board, whether for hotels, airlines or other travel-related providers.
Some in the industry view the technology developed by these services as disruptive, but what they have really done is expand the market in several ways, according to Kessler.
“First, they have introduced the idea of chauffeured service as a realistic transportation option for many more travelers with more people using chauffeured services than ever before,” he says. “Second, they have expanded how travelers expect to interact with their transportation, which in turn has inspired companies to develop new technology and services for both travelers and arrangers.”
Furthermore, the business models behind these services have brought new transparency to how vehicles get matched with travelers and how standards of chauffeur safety and overall trip quality are enforced.
“Again, this transparency is something we at Carey International welcome, since we have always been up front about our exacting standards for things like safety, chauffeur vetting and service consistency,” Kessler says. “We see a growing segment of travelers becoming aware of the differences in Duty of Care between providers and a growing number seeking us out as a result.”
Managing Expectations
Corporate travel managers have been forced into the role of technology analysts over the past decade. Grady notes that the sheer volume and variety of technology advancements in the field of travel make a fire hose look like a squirt gun and travel managers stand in front of the stream, trying to determine which technologies best fit their program while balancing their travelers’ requirements for the newest, easiest and fastest technologies, immediately.
“I think many travel managers over the past five years have been forced to adopt or allow many of the products of the sharing economy as they exploded across the consumer marketplace and are only now beginning to recognize the perils and shortcomings that come with them,” he says. “Ask any travel manager and I think they’ll tell you they have real concerns over Duty of Care around these solutions and are desperately seeking alternatives that provide the efficiency and ease-of-use of these applications while still maintaining the high standards they have put in place for their managed travel program.”
Accompanying this rapid marketplace expansion is an increase in transparency and understanding of the chauffeured transportation product. Today’s travelers and travel managers are now taking a deeper look at particular aspects of chauffeured service including quality, Duty of Care and consistency.
“They are seeing differences in providers that they never noticed before, and starting to question which factors they value most in a service – factors that become more difficult to control as supply increases to meet demand,” Kessler says.
David Seelinger, chairman and CEO, EmpireCLS Worldwide Chauffeured Service, doesn’t believe Uber and Lyft have done that much damage to the ground transportation business as of yet when it comes to corporate travel, but can see it making strides in the years ahead.
“Our industry really promotes Duty of Care because we feel as though the business travel executives want and deserve this, and that’s not something that right now Uber can do,” he says. “But because of Uber, our industry has changed and we are working with Deem to eventually give our customers that on-demand instant gratification switch they would like and really control the spending on ground and making sure workers are adhering to the ground policy.”
Meanwhile, the ride sharing providers say they are not standing still in pursuing a better traveler perception of safety and convenience factors. “On the safety front, we do a rigorous criminal background check and recurring driving record checks,” says Lyft’s Patel. “We have also improved access to ride data for travel managers, which provides them with more visibility and Duty of Care. When it comes to convenience, we have made it simple to request a ride within minutes and pay for that ride through the app which removes the burden of carrying cash or holding onto receipts while traveling. This eases the expensing and reimbursement process for business travelers.”
Taking It to the Street
It would be hard to overstate the impact of mobile technologies and real-time ride hailing services. But hand-in-hand with that comes a change in the overall demographic of chauffeured transportation riders.
“As the workforce skews towards Millennials and the so-called “mobile revolution” permeates more and more demographic groups, the profile of the modern traveler has fundamentally changed,” Grady says.
The change in this traveler behavior occurred so quickly that many managed travel programs are scrambling to understand these new technologies and how they can apply the discipline and structure of their program while accommodating the new demands of their travelers.
Thus travel managers are requiring more from their providers. Many are seeking partners that will help them understand the marketplace and assist in identifying solutions that will fulfill the needs and expectations of their travelers, while at the same time meeting the requirements of the travel program.
In 2015, Lyft introduced more features for business travelers, including an in-app integration with Concur. Concur users can instantly expense Lyft rides they take for business within the app.
“Lyft was the company to introduce peer-to-peer ridesharing to the world. Our business was designed with people in mind, and that has increasingly grown to include business travelers specifically as travel buyers have recognized that the convenience and reliability afforded by ridesharing can make their travelers’ trips more efficient, cost-effective, and even enjoyable,” Patel says.
Uber for Business offers travelers the ability to enter an expense code or client code and allows the company to have insight into the trip in real-time. The information can be sent to a back end system that collects the data, streamlining expense reporting and allowing more granular insight into the scope of the trip.
“It’s all designed to make it easier to travel,” Crowley says. “When you land at an airport, the destination is pre-loaded and expensed and it makes things convenient for the traveler.”
The primary challenge for legacy chauffeured transportation companies bringing mobile into their businesses is balancing travelers’ expectations with those of others in managed travel.
“Since the majority of our clientele are part of managed travel programs, Carey International has worked to adapt new mobile technology into our business in a way that meets the expectations of the modern traveler but also provides a travel arranger or agent with the robust travel information they require,” Kessler says.
Carey did this by developing a suite of mobile applications that give travelers full access to their trip – the ability to edit preferences, track their driver, etc. – while also connecting to a web platform for arrangers and managers. With its Carey Connect platform, an arranger can book a reservation for a traveler, that traveler (and the arranger) can track the driver on GPS just as they would with any hailing application, but then when the trip is complete, both the arranger and manager have immediate access to all the trip details and can seamlessly expert them for reporting and expense management.
Carisone says ride sharing companies have shed light on a sleeping industry and believes that these companies took some of the best of other company’s features and many ground transportation companies are paying them back now.
“In order to make inroads now, everything is based on supply. As Millennials start to mature, they will stop going out to bars and will need the more professional drivers we supply,” she says. “For our future, we need to grow organically and also inorganically. It will be to all our advantages to pull together in friendly ‘co-opetition’.”
