MARCH LCT: How to get all you need, anytime you need it.
Last minute cancellations in the corporate world happen daily across the globe. Meetings and flights get cancelled, or people simply change their minds.
For the small operator, a last-minute cancellation can be a serious financial setback as a vehicle has been held for the client only to end up sitting in the garage all day.
Who Has The Bigger Pencil?
Obviously big networks such as Savoya, Music Express and BostonCoach handle hundreds of jobs a day. They write checks and present credit cards every day to hundreds of smaller operators in big cities and small. They handle the travel arrangements for thousands of business travelers of Fortune 500 companies. Their bread and butter comes from those corporations.
If you screw up a single ride for them, the mistake could cost them an entire account. Perhaps this is the reason they believe they are in control and will dictate how the ballgame is played. They believe there is always someone in your town that can do the job just as well as you if not better and cheaper.
Why? Because most operators yearn for such relationships. Many of the networks do value their relationships and are willing to work with smaller companies to ensure financial harmony, but the bottom line is they probably are holding all the cards.
Contracted vs. Non-Contracted
Maybe you consider yourself an affiliate of Cary International or BostonCoach because they send you a few jobs throughout the year. You are an affiliate in the sense that you accepted a job they gave you and performed it. However, being a contracted affiliate means you have signed a contract that spells out everything from what type of vehicles you can use to what amenities are provided, to how cancellations are handled. Being contracted defines payment terms for completed rides and cancelled rides. Contracts can be negotiated but the smaller operator is not in the best position to bargain for the reasons previously stated.
Make sure the cancellation terms are something you can live with because once you sign the contract, you have agreed to those terms. However, if you fall victim to a last-minute cancellation, and you are contracted, you may still be able to convince the affiliate manager to pay you something if you have a compelling reason. Perhaps you only own one SUV and a network books it two weeks in advance for a 10-hour day and then cancels two hours before pickup. You may be able to convince an affiliate manager to pay you $250 for the day. Being a non-contracted affiliate provides much more leverage in handling these circumstances.
Basic Cancellation Policies
In Chicago, Fellowship Fleet Limousine and Bus Company has a 72-hour cancellation requirement for most trips but a one-month requirement on weddings and proms, owner Travis Latham says. An hour away from Chicago, at Vintage Chauffeuring, owner Andrew Armitage has a 24-hour cancellation policy and requires a 20% non-refundable deposit at the time of order. At Olympus Worldwide Chauffeured Services in Atlanta, CEO Fred Rich has policies that range by the type of vehicle with the shortest timespan being two hours for sedans and SUVs and the longest at 72 hours for buses.
In an informal survey conducted by LCT Magazine, the two-hour sedan/SUV cancellation policy seems to be typical across America. However, in San Diego, Men in Black Transportation (MIB) has a stricter policy on sedans and requires a four-hour notice, president Selim Aslan says. Other vehicles have different cancellation requirements. Mixing it up a little more, MIB has different cancellation standards based on whether or not the trip is local. There really doesn’t appear to be any industry standard everyone adheres to.
“In most cases, we will adhere to the network‘s policy,” Latham says. “However, we make our judgments on a case-by-case basis.” Rich also states that Olympus always tries to honor the affiliate’s cancellation policies, and in cases where they farm an order out and the receiving affiliate has a requirement for a longer notice than Olympus, Rich asks them to meet his policies if at all possible to work together.
If the two companies regularly share business, there is a spirit of cooperation. Aslan points out that all of his calls are recorded and the cancellation policy is part of a standard review of the order so that no party has misconceptions about when a cancellation must be made to avoid a charge. Aslan says they will bend their policy for an incoming affiliate order as long as it’s reasonable. If MIB farms an order out to an affiliate with a different policy, Aslan tries to negotiate the policy but ultimately will notify his own client of the different cancellation policy if an agreement is not met. Vintage is willing to make exceptions for affiliates on a case-by-case basis, Armitage says. As for differences when farming out, he says he would find another affiliate to work with if one would not meet his own policies.
Spell It Out
“Cancellation policies and any other policies need to be negotiated with the job and before getting into a binding agreement,” Aslan says. It is simply a matter of both parties disclosing their cancellation policies in writing and discussing it if there is potential for a problem on either side. You may be the one doing the cancellation outside of the affiliates’ terms and find your own credit card being charged as a result of the late cancel.
“If it becomes a frequent or problematic issue, I evaluate the working relationship between the two companies,” Armitage says. The bottom line is we all have the choice of accepting a job within the policy of the affiliate or rejecting the order. The latter will almost surely determine whether or not you ever receive another order from that affiliate. If you need to negotiate the terms of cancellation, make sure you put it in writing and have the affiliate sign an acknowledgement of the modified agreed terms.
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