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BIG CITY, USA — For all the talk and angst about transportation network companies (TNCs) like Uber, traditional chauffeured service levels still carry more clout in procurement circles at elite corporations.
The sheer volume of detail, complexity and nuance involved in providing reliable ground transportation for business travelers tends to work against app-driven TNCs.
One large-fleet operator during the past year privately relayed to LCT accounts of working well into the night for weeks on end to devise a request-for-proposal (RFP) for a major corporate contract. It was all done to win over a procurement officer responsible for ensuring that his company’s high-value, high-performing corporate executives could travel in the safest, most seamless manner possible with minimal risk and exposure.
LCT recently landed an exclusive inside interview with one such executive who handles ground transportation for a major multi-national global financial firm with thousands of employees worldwide. The executive oversees about $50 million per year in spending for chauffeured transportation and motorcoach charter services, with about $20 million–plus on the domestic side and about $30 million among international facilities and outposts.
While the multi-national firm prefers large chauffeured transportation companies, it also needs smaller, elite, boutique-level limousine operations that can provide luxury transportation for its board of directors, top executives, VIPs and special events.
The interview was done on condition of anonymity so the executive could speak candidly to LCT and protect the identity of supplier relationships.
Question: What is your process for procuring/choosing chauffeured transportation/limousine vendors?
Answer: Unlike a lot of companies with RFP every one or two years, we don’t have that philosophy. We know the marketplace well enough that we can pick and choose those vendors who meet our needs. Procurement people have gotten more involved in travel during the last few years. They generally expect us to have an RFP quite frequently, so we had one recently with a three year term and a 30 days “out” clause for either party. As part of the process, we’ll generally start with a duty-of-care check. We want to make sure there are no issues from a legal or ethical standpoint that would make a vendor unsuitable for us. We’ll do a financial check on the vendor as well as look at fleet sizes and reputation in the industry. All this happens before we invite a vendor to be part of an RFP.
Some companies will send out an RFP and it’s an open invitation for chauffeured transportation companies to submit. For us, we’ll survey the marketplace and find suppliers who fit needs, and invite those suppliers to take part. We believe in having as few companies as possible. We shy away from vendors who have 50 cars or fewer. In the last RFP we did, we solicited vendors who had 300 or more cars. We also had a requirement that if the provider subcontracts the work, we want to know who it is as part of the agreement.
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Q: What are your service expectations and compliance standards in selecting these vendors?
A: That we have a representative dedicated to our account who has primary responsibility over it and is available to us 24/7. We have a go-to person on the operations side of business, and a go-to person on the billing side of the business.
Our minimum guidelines are that the age of the vehicle is five years or less. We stick with standard sedans, such as the Chrysler 300, the Lincoln MKS, and the Lincoln MKT Town Car. We found that when we have three or four people going to a meeting, employees push back against smaller cars.
The chauffeurs must be non-smoking, dressed in proper attire, and we expect drivers who can communicate clearly in English. It doesn’t have to be their first language, but we believe they need to communicate in English.
In terms of customer complaints, we try to hold vendors to an SLA, standard language agreement, where the number of complaints should be under 15% of all trips. We are satisfied with a service minimum of 85%. Most companies we use have a 97% or greater success rate.
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Q: What is your process for procuring/choosing motorcoach and/or bus transportation? What are your service expectations and compliance standards in selecting these vendors?
A: Generally, we want to ensure these companies are all in compliance with Department of Transportation regulations. We get feedback from other companies about suppliers they use. You’ll find there is a good informal network among transportation managers. The information tends to be readily available. We find that as more and more suppliers provide higher-end buses and motorcoaches, it’s a welcome move for us. We have some language requiring bus companies to provide bottled water, a minimum number of hours, and be set up for transfers as well as hourly work. Amenities are becoming a big deal. We don’t mind if there is an additional charge for amenities. What’s important is having them.
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Q: In each of the above transportation categories, what size companies do you prefer (i.e. large national/global affiliate networks, smaller local-based boutique-level operations, individual independent contractors, etc.)?
A: We insist on fleets with 300 vehicles or more. However, we do use boutique companies for board members or senior executives or for events where we need more hand holding. In cases where we use a large company to service the board of directors or CEOs, we would have either a separate agreement or supplement to the regular agreement governing what we are looking for. A large company would have to supply a small pool of chauffeurs exclusively for senior people.