Four Ways To Double-Down In The Battle With Uber

Posted on August 1, 2014 by - Also by this author

Now, don't get alarmed. Uber's GBTA exhibit may have had black vehicle and beautiful young people, but they really can take their game only so far if limo operators stay wise and keep offering better service. Photo by Tim Crowley/LCT
Now, don't get alarmed. Uber's GBTA exhibit may have had black vehicle and beautiful young people, but they really can take their game only so far if limo operators stay wise and keep offering better service. Photo by Tim Crowley/LCT

As many of you have read by now, Uber was limo industry “Topic A” at the Global Business Travel Association Convention this week in Los Angeles. I went by their booth and covered the Tuesday morning press conference.

During my rounds on the show floor, I talked informally and/or off the record with various operators attending the show. What I gleaned overall from them was that there are some market opportunities for operators amid all the TNC competition. Chauffeured transportation operators can satisfy these markets in ways that TNCs can't or won't. The reality about Uber and TNCs is that they compete intensely with cabs and chauffeured sedans in core urban areas, where distances often are a measured in blocks, and total trips go for only a few miles.

To make up for any lost runs or business, chauffeured transportation companies can do what many have been doing in recent years. Go deeper in those service niches where TNCs fall short:

1) Expand charter buses and mini-bus service: Group transportation is still almost the exclusive domain of charter bus and chauffeured transportation companies. Using an app to call up a bus or even a van doesn’t make that much sense for a group larger than what can fit into a sedan or SUV. (I am working on an article about a limo company that went from all-chauffeured vehicles to mostly motorcoaches and mini-buses).

2) Medical-related transportation: The truth is that Uber’s clientele are overwhelmingly under 40. Seniors age 65 who have multiple medical and transportation needs are unlikely to be using an app. They want the security of reliable, safe, arranged transportation, and do not want to have to interact with an app to monitor a vehicle, meet their chauffeur, or handle billing. (I ran into one operator who is starting a medical transportation division).

3) Service to suburbs and exurbs: The economies of scale for price-driven TNCs has not yet translated to vast suburban areas surrounding cities, where travel is more a matter of miles than blocks. Even calling a cab in the burbs can be a hassle. Chauffeured services can market to upscale, upper-middle class clients who don’t want cabs but won’t lure an Uber driver via an app. (Where I live south of Los Angeles, Uber would likely not pick me up unless it was a slow day, given the further distances from where the drivers concentrate).

4) Make airport service extra reliable: Most chauffeured clients just will not risk using app availability and possible surge pricing when needing a ride to the airport. Limousine operators can guarantee those 4:45 a.m. and 5:30 p.m. rush hour pick-ups on pre-arranged reservations and rates. Selling such security should be a key promotional point for operators in a TNC environment. Train all chauffeurs to know alternate routes or how to immediately look for them via real time traffic info and GPS. (Before I knew all about chauffeured transportation, I once almost missed my flight because the clueless cab driver took far too much time to get to my apartment building, prompting numerous calls from me to dispatch).

Uber and TNCs have weaknesses that will become more apparent the more they reach into transportation markets. Limousine operators should exploit these and go long on those approaches and markets they do best. This will make the industry even stronger once it gets a higher quality app than the Uber platform, which will happen.

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