Commentary: Jeff Rose, president of Limousine Association of New York, explains how the permit cap ignores vital for-hire differences.
HONG KONG — In a city of seven million inhabitants that could qualify as the most packed and stacked in the world, the metropolis knows how to move itself around with purpose. Hong Kong presents block after block of streaming people on their way to and from work, in and out of luxury retail stores with labeled bags, dipping along rows of side streets full of vendors and fruit stands — and those are just the people on foot.
On wheels come convoys of double-decker, 100-passenger-plus buses, double-decker street cars, and red-and-white Toyota taxicabs, all barreling and honking along every boulevard and avenue loaded with people — not to mention a state-of-the art, on-time subway system underneath it all with even more people on the go. So unlike New York City where Town Cars glide around every block, a black chauffeured car in Hong Kong rolls with distinction, since the abundant public transportation and city cabs overwhelm the vehicular population.
Hong Kong is so built up that skyscrapers are literally being built into mountainsides; its tropical, coastal terrain limits how much of its 426 square miles can be developed. The city teems with headquarters or Asian divisions of most major global banks, investment and private equity firms, and an array of electronics and technology companies, as the corporate logos (Samsung, Panasonic, etc.) flashed across the waterfront skyline along Victoria Harbor show. In such a concentrated vortex of vehicles and people swirling about 3,000 skyscrapers and tall buildings, one chauffeured transportation company manages to replicate the American and European style of luxury vehicle service.
Since opening its Hong Kong branch three years ago, London-based Tristar Worldwide Chauffeur Services has set up a chauffeured transportation division that seamlessly merges into the company’s global reach. With an estimated 40,000 runs per month in 80 nations, Tristar is the largest chauffeured transportation company based outside of the U.S., and the third-ranked company on the 2012 LCT 100 Largest Fleets List. It also received the prestigious Queen’s Award this year for its international business performance. The Hong Kong division has 10 employees who run a fleet of two company-owned S-Class Mercedes-Benz sedans, a company owned Mercedes-Benz Viano minivan, and about 40 S-Class sedan and minivan contract vehicles from local affiliates. Tristar handles bookings for other Asian destinations out of its Hong Kong offices.
Big business market
This citadel of capitalism, global finance, and unapologetic prosperity is prime territory for Tristar’s primary customer base: Airlines, banks, multinational corporations, private equity firms and global travel agencies. The company also transports members of royal families from the Middle East, VIPs/celebrities, and U.S. governors and political dignitaries. The more profitable as-directed runs outnumber airport transfers, with a few local leisure trips part of the overall mix.
Typical chauffeured vehicles are the ones found in Tristar’s fleet: S-Class Mercedes-Benz sedans, Mercedes-Benz Viano minivans, and Toyota Alphard MVP minivans, which can seat up to seven passengers. And don’t bother asking for a traditional stretch limousine. With heavy vehicular and pedestrian traffic, often on narrow streets and clogged travel lanes, a stretch would be impractical. Stretches, however, are requested on the nearby region of Macau, the world’s largest gambling and casino mecca.
As a former British colony that became a Special Administrative Region (SAR) of the People’s Republic of China in 1997, Hong Kong follows the British-style traffic patterns, which are directionally the opposite of traffic flow in the U.S., Canada, and most of Europe. Helpful signs and arrows painted in the street near cross-walks indicate which way you should look for oncoming traffic, since the left-side-of-the-road traffic flows can be disorienting to many Westerners and Chinese Mainlanders.
Tristar’s Hong Kong general manager Gary Au faces a formidable set of challenges and obstacles that at least match, if not exceed, those of U.S. operators. One telling example: City rules allow idling for only three minutes, which makes it tough for suited chauffeurs waiting and trying to stay cool in the humid summers. Altogether, it is easier to run a chauffeured service in New York and San Francisco, despite the regulatory and traffic hassles. Au spoke with me at length in May during a visit to Tristar’s offices and on a chauffeured run through Hong Kong.
Among the bigger challenges is one familiar to U.S. operators, but of a much worse degree: Limo licensing is not as standardized as in the U.S. Unlike professional, legitimate chauffeured enterprises such as Tristar, about 90% of the estimated 10,000 ground transportation companies in all of China are unlicensed, Au says. “In Asia, you must be careful who you choose for affiliation.” Governing authorities follow strict policies on legalizing car services, making it both expensive and cumbersome to get licenses for chauffeured vehicles, Au says. Hong Kong authorities, while more efficient than those on Mainland China, do not issue licenses unless an operator can prove a certain amount of revenue from vehicle service. But without a license, how can you run the vehicles to get and prove the revenue? Au asks. That’s why Tristar so far directly owns only three vehicles and contracts for the rest of its fleet.
In Mainland China, regulating authorities prefer issuing licenses to domestic companies. Procedures and processes vary from one region to another, Au says. Tristar, which now works with a trusted partner in Shanghai, another key Asian financial capital, is exploring opportunities to set up a branch there but must overcome regulatory challenges.
To ensure safe, Western-style transportation, Tristar must closely vet its affiliates across Asia. Tristar has the capability to plan complete, seamless ground transportation logistics for clients in multiple Asian cities and worldwide through its global booking system, Au says. Tristar also advises clients on travel planning, itineraries, and places to visit.
The client base consists of about 30% local Hong Kong residents traveling within the city; 30% are Hong Kongers headed out to other cities; and 40% are inbound Tristar or affiliate clients from other locations.
“We are not cheap, but you can’t compare the price of taxis with what we have to offer,” Au says. “I travel to every city to mystery shop and seek opportunities for service, and check out affiliates to see if service is up to Tristar expectations. Many clients come to Hong Kong and go to other places in Asia.”
Trip to headquarters
On a chauffeured trip from the main island of Hong Kong to the Kowloon Peninsula to the north, Au and I sat in a Mercedes-Benz S-300 as we headed through a harbor tunnel to the Tristar nerve center. Hong Kong Island is connected to the Kowloon Peninsula via three main tunnels. Our sedan bore five certificates and permits in the lower left portion of the front windshield, a testament to the aforementioned strict limo licensing. The chauffeur eased us through the tunnel to the offices in the Kwun Tong area of Kowloon. Tristar occupies a 2,000 square-foot suite on the 19th floor of the 27-story Lever Tech Centre, where employees, including chauffeurs, coordinate and handle daily operations.
Born and raised in Hong Kong, Au brings a rich combination of education and experience to his position. He received his secondary and university educations in London, graduating from Westminster London University. He worked for Nielsen, a worldwide marketing research firm, a Japanese investment company, and in a chauffeured transportation company before joining Tristar in 2010.
Tristar’s Hong Kong offices offer a window onto the intricate service coordination required to handle clients. Inside, Tristar maintains detailed checklists of procedures for chauffeurs, with assignments posted on a master board. Training manuals, assigned to each chauffeur, emphasize a thorough attention to detail. A color-coded booking list differentiates among current-day, next-day and future bookings.
The operational details are designed with one goal in mind, Au says: “Every chauffeur must do the things we expect because the clients pay attention to detail.” One employee had a laminated card next to his computer keyboard that has a 2012 calendar on one side and Tristar’s simple practices on the other that sum up the steps to consistent customer service:
Six Service Principles
Looking ahead, Tristar Worldwide’s London-based CEO, Dean De Beer, plans for the Hong Kong operation to double in size annually in the near future. “Service standards in Hong Kong are generally very high so we’ll be looking to make sure we continue to deliver at the highest level,” De Beer told LCT. “Currently we are in the process of installing free in car Wi-Fi in all our vehicles in Hong Kong so foreign customers can use their smartphones and tablets in the car without incurring astronomical roaming charges.”
In a globalized economy with ever-growing international business travel, Tristar’s service attributes in Hong Kong in many ways serve as a model for chauffeured companies worldwide:
Multi-lingual: All chauffeurs must be proficient in English, along with Mandarin and Cantonese dialects of the Chinese language. Children growing up in Hong Kong already start learning the language at age 7. Finding English speaking chauffeurs in China’s other financial capitals, Beijing and Shanghai, is more difficult, Au says. “A selling point of our company is to provide chauffeurs who can speak English everywhere in Asia.”
Insurance coverage: Tristar’s insurance program makes sure affiliates and contractors are covered and legally licensed. Even if a chauffeured transportation company offers quality vehicles and lower rates, it may not be properly insured, Au warns. If police pull over a chauffeured vehicle, or if it is in an accident, and it lacks a legal license and/or proper insurance, both the chauffeur and client can be taken to jail, Au says.
Safety/training: Tristar requires chauffeurs to drive 10 km below the speed limit. If a chauffeur exceeds a speed limit, the GPS system will send an e-mail warning about speeding. All vehicles are tracked and located at all times via GPS. Chauffeurs are given thick manuals of instructions and procedures and have a minimum one-week on the road training.
Information technology: The in-house computer system and software is a private label unique to Tristar that draws upon the global company I.T. support. That system includes universal booking and reservation management connected to Tristar’s largest operational offices in Boston, New York and London.
Client communication: Clients receive messages and confirmations on smartphones and PDAs, since Tristar uses the latest technology in fleet tracking and client communication familiar to U.S. operators. That includes a service desk at Hong Kong International Airport for clients. Because Hong Kong is such a dense city, chauffeurs know the terrain, traffic patterns and alternate routes, and usually don’t need GPS. Dispatchers and chauffeurs readily communicate with each other on service timing and traffic conditions. Tristar also reviews client schedules ahead of time to advise on time needed in traffic and between locations to avoid disruptions or late appointments, Au says.
Amenities: Evian bottled water, complimentary newspapers, high-quality Tristar-branded tissues come standard in chauffeured vehicles. Clients also can request specific items in advance, such as apples and peanuts, Au says.
Hong Kong A Prime Host For Capitalism
Multinational companies are attracted to Hong Kong by a combination of the territory’s English common law legal system, its low tax regime and its historical trading links and unique access to the People’s Republic of China, the world’s fastest growing economy and biggest potential market.
According to the results of an annual survey released in October 2011 by Invest Hong Kong (InvestHK) and the Census and Statistics Department, the total number of overseas and Mainland Chinese parent companies running business operations in Hong Kong has recorded its highest level to date, as, in particular, did the number of those operating regional headquarters. By June 2011, the total number of foreign parent companies with operations in Hong Kong had reached 6,948 companies, a 5.9% increase from 2010. Within that total, the number of regional headquarters was 1,340, an increase of 4.3%.
Source: www.lowtax.net (LowTax — Global Tax and Business Portal)
Commentary: Jeff Rose, president of Limousine Association of New York, explains how the permit cap ignores vital for-hire differences.
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