Instead of seeing AI as a replacement for human endeavors, try to see it as an enhancement of them.
It’s been talked about for years: Car rental companies moving into the global chauffeured transportation industry. It would be tough for limousine operators to compete with Avis, Hertz, and other major companies that have major economies of scale, such as large fleets, strong brands, global reservation systems, and sizable annual revenues and client volume.
Much has happened in the past year. Avis Budget Group has led the way through its acquisition of nearly half of Carey International in October 2007, with plans to increase that to about 80% a year later. Another development last year was its partnership with WeDriveU in creating Avis Chauffeur Drive, which links up rental cars with drivers for customers who want that type of service. Avis Chauffeur Drive is attempting to stay outside vehicle registration requirements in New York City through the Taxi & Limousine Commission. The National Limousine Association has become involved in those meetings and discussions.
Avis Budget Group and Carey International declined to be interviewed for this article. By the time this issue of LCT Magazine is published, more details may have been revealed on LCT’s website and blog. It’s not entirely certain that Avis Budget Group will increase or retain its ownership of Carey International, and its plans for building up Avis Chauffeur Drive are not clear yet.
During the past two years, major car rental companies have been expanding their global presence in chauffeured transportation: • Avis and Hertz have created alliance deals with chauffeured transportation operators in China and India. • Hertz has been especially active in building a global presence in Asia, the Middle East, and other regions through its Worldwide Executive Limousines division. • Germany-based Sixt has been building chauffeured services primarily in Europe, where it’s one of the largest car rental companies.
While much is happening, it’s still on the fringes of daily business for limousine operators. But operators need to follow these developments more closely. That was made clear during a keynote presentation at the International LCT Show in March by Scott Solombrino, president/CEO of Dav El Chauffeured Transportation Network.
“They strategically entered our space and they are not leaving,” he said. Car rental companies most likely will be focusing on adding chauffeured services to their corporate clients. “For them to own a chauffeured car component, it gives them an all-in-one package for Fortune 500 companies,” Solombrino said after the show.
Car Rental Building Global Transportation Services
Expanding chauffeured rides is part of building global total transportation services for the major car rental companies, says Neil Abrams, president of Purchase, N.Y.–based Abrams Consulting Group, an expert on car rental industry trends. “They’re working on their ability to leverage global brands across multi-transportation platforms,” he says. Four corporations own the eight large car rental brands that make up about 95% of U.S. market share, Abrams says.
The Hertz Corp., Avis Budget Group, and Dollar Thrifty Automotive Group own five of the top eight car rental brands and are publicly traded companies. Enterprise Rent-A-Car is privately held and now owns Alamo and National. “The publicly held companies are held accountable by investors for financial results but also for their strategic vision,” he says.
Avis and Hertz are the best-known brands globally and are building on this with added ground transportation services, Abrams says. Along with chauffeured services, off-airport, local market car rental growth has been a priority for these two companies to take some of that market share away from dominant Enterprise Rent-A-Car. By the end of the year, Hertz is expected to have about 1,800 off-airport U.S. car rental locations and Avis will have about 1,500, Abrams says.
Enterprise Rent-A-Car is not making any moves toward adding chauffeured services to its line-up, which includes truck rentals and corporate fleet leasing, he says. What Enterprise ends up doing with Alamo and National isn’t clear — it either will absorb the fleets and employees into the Enterprise car rental system or keep them separated as subsidiaries under their own brand identities, Abrams says.
Rapidly expanding their chauffeured service market share does not appear to be a top priority for the major companies.
Avis Chauffeur Drive and Hertz’s Worldwide Executive Limousines are still fairly new and low profile in these companies’ larger corporate identities and revenue streams, Abrams says. Abrams expects the major car rental companies to continue adding to their ground transportation services, and not just through chauffeured rides. Busing could be part of it. “Could Hertz buy Greyhound and call it Hertz Busing Services?” he said, citing an example of the type of decision that can be made by the major car rental companies. “They’re selling to travel managers and are building their package of services.”
Will Avis Stay Unlicensed in New York City? Avis Chauffeur Drive would prefer not to be included under the New York City Taxi & Limousine Commission’s (TLC) rules and regulations — and licensing fees — for services provided in the city. As of press time, discussions were still ongoing between TLC and Avis, involving attorneys and management staff. The TLC was unavailable for comment.
The National Limousine Association also has been part of the discussions, NLA President Richard Kane says. “The NLA wants to make sure that whatever Avis is doing is in accordance with regulations on a state-by-state basis,” he says. “It’s important that everything on the local level is handled consistently,” he says. “As long as they’re with local and state laws, then we welcome Avis as a competitor in our market.”
NLA officers have been attending TLC meetings and participating in conference calls to monitor these activities, Kane says. The NLA hasn’t taken an official public position on the Avis/NYC situation, but has been consistently communicating its concerns. “This is a state-by-state issue, and Public Utility Commissions will have to weigh in on it,” Kane says. “We want to see a fair platform for all of the for-hire companies.”
Avis Budget Group entered a business relationship last year with WeDriveU, a major supplier of chauffeurs to renters. Most WeDriveU customers have their own cars and need chauffeurs to drive them around in 24 U.S. metro areas. Based in Burlingame, Calif., WeDriveU states that is has more than 1,000 chauffeurs employed and more than 5,000 corporate and individual clients. Once the Avis and WeDriveU alliance began, Avis focused on building chauffeured services through its rental fleet in 10 major markets including New York City, Los Angeles, Chicago, Washington, D.C., Detroit, and San Francisco.
Avis Chauffeur Drive has promoted the benefits of using its services for time savings and convenience. Cost savings is another focus of its promotional materials; saving up to 35% when using the car a full day compared to what it calls using a “car and driver service” is one of the benefits of using Avis Chauffeur Drive, the company says.
Chauffeuring Europe Of the major car rental companies, Sixt has the largest presence in chauffeured transportation throughout Europe. And that’s always been the case: Martin Sixt started up his company in 1912 by chauffeuring clients in limousines, before building a rental car fleet. Today, limousine service is a division of Sixt, based in Munich, along with its car rental headquarters. The Sixt limousine service management team works from the headquarters and regional field offices. Trainer/coaches are on staff to develop the Sixt chauffeur team, who are company employees.
Sixt has 420 worldwide locations offering chauffeured services, and about 3,500 offering car rental, says Alexander Rahe, Sixt Rent a Car’s senior vice president, North America. Most of Sixt’s chauffeured transportation locations are in Europe where most customers are American tourists who need transfer services to and from airports and cruise ships, Rahe says. Clients are transported mainly in BMWs, Mercedes Benzes, and Audis, and a few stretch sedan limousines.
Beyond its European base, Sixt has alliance relationships with limousine operators worldwide. Brazil and India are two countries where Sixt has been building its presence. In the U.S., Sixt has developed a relationship with Dav El Chauffeured Transportation Network. Dav El provides chauffeured rides to Sixt customers who request such services in America. Dav El also offers chauffeured services to Sixt through its strategic alliance with Lufthansa Private Jet.
Sixt has been expanding its chauffeured transportation market presence through network relationships with limousine operators around the globe, which is also being done by Hertz and Avis.
For chauffeured transportation companies, it’s not all about head-to-head competition with car rental conglomerates. Sometimes the affiliations can make good dollar sense.
Majors Expanding Global Reach
WORLDWIDE EXECUTIVE LIMOUSINES now operates in 122 countries, says Leann Sabato, public affairs specialist for The Hertz Corp. in Park Ridge, N.J. Since 2006, Hertz has created licensing arrangements with local chauffeured transportation companies worldwide, including India Private Ltd., where Hertz operates in all the major Indian business cities. Hertz plans on opening a partnered office in Beijing in November to manage domestic services in China.
Chauffeured services include airport and hotel transfers, intercity and interstate trips, hourly rentals, half-day rentals (three to four hours), and full-day rentals (eight to 10 hours per day). Hertz corporate clients are provided with a dedicated account manager who works with local chauffeured transportation affiliates on reservation changes and cancellations, client service requests, and billings. Hertz uses its reservation center to email bookings to licensees.
Client billings include the vehicle, driver, fuel, and insurance expenses; customers also will pay additionally for sales taxes, interstate taxes, and toll fees. Chauffeured vehicles run the gamut in the global markets — from economy and compacts to premium and luxury vehicles including Mercedes Benzes and BMWs, and minibuses.
Avis also has been working on expansion into India and China. “In Asia, we’re seeing chauffeured service grow, along with the economy,” Abrams says. “You could be on a business trip to Mumbai, India, and ask yourself whether you really need a rental car or a chauffeured ride.”
Growth so far has been small scale in India and China for Avis and Hertz, Abrams says. “It’s tough to get into these countries and build fleets,” he says. “You have to make deals with operators in those countries and go through all sorts of business licensing and regulation. It’s a long, hard process. It makes sense to build affiliation with local companies, but you need to bring quality assurance to these markets.”
Instead of seeing AI as a replacement for human endeavors, try to see it as an enhancement of them.
APRIL LCT: CTA Worldwide Chauffeured Transportation succeeds by meeting the growing demand for group transportation.
The passenger pounded on windows after the driver pulled off the highway, locked the doors, and said they were going to a hotel.
The Bill Faeth-hosted event answered some burning questions for operators.
eNews Exclusive: Kevin Polite has joined forces with veteran operator Robert Alexander to provide Washington, D.C. area clients with #RMAperfect rides.
May Issue Preview: Get ready to learn about an exploding, untapped source of clients.
The NLA responds to the first judicial decision on the classification of drivers under federal law.
APRIL LCT: These vendors have got your back for operating securely and legally.
APRIL LCT Cover: The nation’s largest maker of wedding and historic streetcar-style buses has seen a surge in demand since 2015.
The comedian's chauffuer-driven SUV was side-swiped by another car in Los Angeles.
APRIL LCT: Chicago operator George Jacobs shared his deep motorcoach knowledge at LCT’s “Bus Marketing 101” webinar.
Uber has been dogged by reports of drivers accosting passengers, including lawsuits alleging sexual assaults.
APRIL LCT: Tammy Carlisle and Clarence Carr fell for each other and for providing creative luxury transportation service in Atlanta.
eNews Exclusive: The new president of the Colorado Limousine Association urges members to move beyond old ways.
APRIL LCT: Trust and guidance are the two ingredients needed to produce the support staff you want so your business doesn’t swallow you whole
The world's No. 1 online marketplace and trader for professional chauffeured and chartered vehicles, including all types of motorcoaches, buses, vans, stretch limousines, sedans, SUVs, exotics, and classics. New and used vehicles are available from sellers across the nation.
The best online networker to find quality affiliates worldwide and market your company.
Click on any state to see the latest industry news and events in that region.