How To Meet Demand From On Demand?

Posted on August 2, 2013 by - Also by this author

APP OPPS: Uber looks like it will be the leading industry topic for the near future, with so much at stake from regulatory, business and service standpoints. Operators are more engaged on this subject than any other I’ve seen in recent years, including the mega-story of the retirement of the Lincoln Town Car Executive L.

As with any new technology or innovation that can’t be reversed, the overriding issue related to Uber is: Adapt or fade.

I spoke recently with New Jersey operator and LCT advisory board member Bill Atkins of Red Bank Limo, who has offered some of those most positive and constructive thoughts to date about the issue of on-demand, mobile-app based transportation businesses.

You have to give him credit for trying to meet customers where they are at: Online all the time with instant appetites.

“We’re getting a lot of calls for same day reservations which are not as easy to manage as pre-reserved,” says Atkins, a 2010 LCT Operator of the Year award winner. “There’s an Uber mentality; although Uber is competitive, more and more customers want and expect on-demand service than ever before. We have to figure out how to compete.”

At first, Bill admits he got concerned about how to make money amid the cheap pricing and instant service of Uber, but then became more optimistic.

“I’d been struggling with the question of how do I get people to make reservations in advance like they have for the last 26 years? But I was thinking wrong. . .  Why not just welcome that they are calling me? Why put up such a barrier? They could go elsewhere. So I looked at it differently to accommodate same day customers.”

Atkins strengthened his local affiliate network and built farm-out arrangements for on-demand. This has given him more flexibility to complement his six-vehicle fleet. “I farm out to smaller companies because there is more accountability. When it’s a three- or four-car operation, I know the owner. I’m giving them work. A number of companies we call every morning say when they have cars available. It’s proactive. I have increased my inventory and the smaller companies like that.”

Atkins has been working with his affiliates for many years. “I’m outspoken and tell them exactly what it is that I want. I don’t want to turn away people. If we don’t handle them, they go to someone else and maybe stick with that other [company].”

Atkins says he’s changing his approach, being thankful that his customers are still calling him, even if at the last minute. “What can I do better for my customer? I was worried about me instead of the customer and that’s not the way to do things.”

While there are many reasons and excuses to fail, and events beyond one’s control, an operator can still choose to serve customers better, Atkins says. That means accommodating last minute “smartphone” customers. They may not get the best of everything like the more frequent advance clients, but at least you are making rides possible and keeping their loyalty. Meeting demand and providing conveniences are far more effective in retaining customers than panicky discounting, Atkins adds. “I care because I want to be profitable. Not everyone is looking for cheap. You don’t attract customers through discounting.”

We touched upon the subject of dynamic and varied pricing to meet last-minute demand. Atkins pointed out that on any given airline flight, you have passengers sitting next to each other whose airfares vary widely, depending on when and how they booked and their client/class status.

I wonder if that’s a pricing model suited to on-demand service, with lower prices charged during down times and higher rates for peak times.

Regardless of operator views on pricing, Atkins believes limousine operators need to be cooperating and pooling fleet resources like never before.

“For us ethical limo guys, wouldn’t it be better if we worked together more and be more cohesive and reciprocate on overflows? If we can work more cohesively, it benefits our customers. We’ll definitely get more sales out of it. Territorial guys don’t advance; customers benefit from flexibility.”

— Martin Romjue, LCT editor

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