TNCs Versus The Corporate Market

Posted on September 2, 2014 by Sara Eastwood-McLean - Also by this author

It was announced this summer that Uber is launching a joint venture with Concur to create a modified or corporatized app designed for the business travel market.

I say good luck with that.

First, these tech companies are squeezing a very tight market already. The original business model behind all of these apps primarily competes with the taxi space, not chauffeured car.

I’ve said it before, and I’ll say it again now: I am excited by the technology at play here. I think bringing mobile into our world in the long run will be great. Why? Ultimately it will alleviate clunky call center overhead and streamline our efficiencies, making us more profitable.

However, the business model behind such apps does not work for your high touch industry and never will — no matter how much money they all have raised. Remember, their billions were not made from the industry they are working in. Not even close. They are owned by rich investors because the stock — and frankly, the morbid curiosity about about the balls-to-wall CEO of Uber — got deemed a trendy investment by those who have enough play money to have some fun. Translation: It’s a fad.

I contend Uber and its contemporaries will have their fun and then flame out, especially trying to navigate the treacherous waters in the corporate space. This is the arena we dominate and the bar we’ve set very high.

The TNCS are at each other’s throats on market domination, and for what return? The taxi industry can be profitable but it’s been so overvalued in this ego play, it’s really quite ridiculous for anyone with a basic calculator. Our market segment — which mostly caters to the premium level client, the affluent, the famous and the business traveler — has a much lower ceiling for the kind of dividends their TNC investors expect.  

And what’s more silky is how they think they can sell a virtual taxi program in the toughest space in for-hire transportation. Get serious. Uber’s showing at GBTA and inability to make sense to direct questions from the corporate market just goes to show what throwing spaghetti at the wall looks like. It’s messy. Consumer marketing is a far cry from VIP marketing which rests squarely on high touch, high service and not on turn ‘n burn.

Last month, I spoke to 300 operators at the Boston Coach affiliate meeting, where I touched on this topic. The bottom line is you do whatever your clients ask. Keep them happy, and make them happier. Make them fall in love with you all over again. If they want to book service on their smartphones and tablets make that happen. Listen and serve them well.

During the last 15 years, as, Savoya, Limolink, etc., entered this market, all I heard was, “There goes the neighborhood.”

When DOS was replaced by Windows and clients began to insist on bounced confirmations and automated invoicing, I heard the heavy sighs. But we ultimately changed to best serve our clients wishes and we all lived to see another prosperous day.

Here we go again. By the way, any time some new innovation disrupts our business model, it’s a bitch at first blush. Long term? You know the truth. These disrupters change us for the better.

In the case of TNCs taking over the corporate space, they won’t because they can’t.  Watch and see. In the meantime, love and serve your clients like never before.

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