SEPT. LCT: Learn how to use social media and client comments to let others sell your excursions.
SAN DIEGO, Calif. — The GBTA Convention 2018, held Aug. 11-15 at the San Diego Convention Center, saw upwards of 40 luxury transportation companies exhibiting and explaining among 1,300 business travel buyers the importance of duty of care and the peace of mind that comes with hiring a professional car service.
LCT talked with numerous industry attendees on everything from how they are staying competitive and finding promising chauffeurs to trends in the business travel realm.
To combat TNCs, Boillotat doesn’t believe in “if you can’t beat ‘em, join ‘em.” “We are accelerating our higher-end product to offset any business lost to companies like Uber or Lyft. We are looking at fortifying our relationships with five-star hotels and private aviation companies, as well as serving more of the as-directed clientele.”
As far as trends in the business travel realm, he’s seen more movement toward the use of larger vehicles, like buses and motorcoaches. “We’ve definitely seen an increase in meetings and events.” He also notes that education in the true meaning of duty of care is necessary to get corporate clients to understand the importance of using a legal, regulated transportation company.
Hiring quality chauffeurs has become difficult for many operators nationwide, but Boillotat believes your reputation in the marketplace is a plus. “Most of the applicants we receive for chauffeur positions come from word of mouth and referrals from our existing chauffeurs. Believe it or not, some of the better Uber and Lyft drivers who found an interest in becoming legitimate see themselves upgrading to become a chauffeur and knock on our door.”
“We’ve talked about it for years: If we do not change the way we do business, we will not be doing business any longer,” said Bauer, founder of iCars. Bauer points out disruption in passenger transportation isn’t limited to TNCs. “The new scooter industry is worth billions of dollars.” His reference is to hundreds of scooters found lining the entrances of the San Diego Convention Center where the GBTA Convention was held. Once set up, users can grab a scooter as long as they have a smartphone. By scanning a QR code on a scooter and providing a credit card, users can be on their way.
iCars is a technology company partnered with hotels, airlines, travel companies, and cruise ships who book transportation for their clients. The app connects those partners to an operator network of over 20,000 luxury vehicles across 550 major cities worldwide as well as connecting the licensee operators to each other. Bauer says his audience is the corporate B2B traveler who cares about duty of care as well as convenience and innovation. To that end, many operators participating in the iCars network run Tesla vehicles, adding a unique experience for passengers concerned about the environment.
“At the end of the day, what we do is completely different than what TNCs are doing,” Bauer said. “We are taking the black car that’s been used for hundreds of years and `making it easier for them to use.” Bauer is also seeing a trend of business travelers who have given TNCs a try and are coming back for luxury. Bauer cited a corporate travel booker who reports booking 50,000 trips a year who says they have had complaints from travelers about TNC car smells, dog hair, drivers reeking of marijuana, and other nuisances.
The people who are really important to successful corporations are not using TNCs, said Solombrino, CEO. “We don’t see degradation in C Suite business whatsoever, but we are seeing a drop on the lower end of corporate travelers who may face some blowback from their supervisors for using chauffeured car service. That’s the cream off the top we are starting to miss.”
The corporate traveler, corporate traveling departments, and strategic sourcing and procurement departments of companies are totally focused on how to get the most efficiencies the fastest — all with a phenomenal standard of duty of care. They want push button solutions that centralize the way they work with a chauffeured car service.
“They want end-to-end tech solutions where everything is loaded onto a platform they can access themselves. They want to know the cars are tracked by GPS, and want to be able to follow their passengers while they are in the vehicles. It’s starting to squeeze out other operators who don’t have this kind of technology.”
Solombrino said Massachusetts has legislation that’s trying to require fingerprinting for TNCs because identity theft has created a huge problem. “You could be Joe and give your phone to Sam. Uber and Lyft don’t interview people live, so no one really knows who Joe is,” he explains. He also says as states continue to legalize marijuana, company policies still forbid it; that’s why the NLA is making a move to push for mandatory drug testing as well. “The TNCs will fight against drug testing until their businesses go under. They know if they are required to do it, it’ll eliminate a massive amount of people who work for them. We’ve had to do it for decades, so why aren’t they required to do the same?”
In terms of business travel trends, Jordan is seeing much more concern for duty of care. “It’s critical for many companies. We’ve got young people who are asking their corporate offices, ‘How will you protect me out there?’ I know people who have actually asked while job hunting, ‘What is your duty of care to me when I’m traveling, and what does that include?’ They are starting to use it as a deciding factor when looking for a new job.”
Versace says his company is doing a lot more meetings and events than ever before for corporate travel managers. “I think they’ve tried to use TNCs for their events, and it doesn’t work out too well. They realize it very quickly. We haven’t really seen a drop in our business traveler clients due to TNCs by any means.”
To maintain revenue and clients, Elite has refocused its efforts to market to the corporate traveler as well as to partner with large travel agencies such as GlobalStar and Travel Port, Henken said. These two companies are the new big players at the GBTA Show, he added. GlobalStar is a worldwide travel management company with more than 3,500 locations in over 85 countries. To put GlobalStar into perspective, the company handles more than $14 billion annually in the $1.4 trillion dollar travel industry, according to its website. Becoming a partner ensures a piece of the corporate travel pie will be received by ground transportation providers such as Elite.
Elite is not concerned with competing against TNCs, Henken said. “Users of TNCs tend to be the lower end of retail users, especially the Millennial generation which is more concerned with gadgets than safety and service.” He doesn’t believe corporate travelers care a lot about safety and service either, but the people who book the actual rides do.
Mahnke has decades of experience serving corporate travelers in his local Northern California market as well as worldwide travelers. Like most operators, he’s struggled to fill the driver seats of his 70-vehicle fleet.
“Quality of service is what they are looking for and they are willing to pay for that quality.” Because of that belief, Mahnke is always on the lookout for good quality employees and says you need to recruit from every avenue you can. He uses websites such as Indeed, Monster, and Craigslist. However, he believes being a California-based operator poses additional obstacles for him.
“The biggest problem in California is the wage and hour policies,” Mahnke said. The labor laws enforced by the State Labor Commissioner are tough on California operators due to the nature of the job and the requirement to provide rest and meal breaks at certain time intervals. It’s not practical to pull over and tell a passenger a break must be taken before traveling any further. Not to mention the minimum wage in San Mateo County is $13.50 per hour. Since ABC calls the city of San Mateo home, Mahnke is saddled with that hourly wage and the corresponding worker’s comp premiums and employer based payroll tax. This likely pushes the hourly labor cost to just under $20 per hour.
He says even with the $13.50 minimum wage, chauffeurs really can’t afford to live in California. The only way to change that is to change the rate structure to stay in business and properly pay chauffeurs so they can afford housing. Despite these obstacles, he continues to recruit by purchasing ads on Facebook, LinkedIn, and the previously mentioned websites. He doesn’t believe classified advertising is useless yet. “Classifieds have not gone away, but they have taken a smaller role in recruiting. I think there are more opportunities through social media now,” Mahnke said.
Bagdasarian has noticed groups and events will book inbound transportation for their employees, and then tell staff they can book their own return trip — this reflects an increase in “bleisure” travel. “We see that especially when they are in a destination city like Los Angeles and the event finishes close to a weekend.”
To help retain talent, the company has upped benefits. When chauffeurs are hired, they get 401k access, credit for three new suits, and their dry cleaning is payed for. After 18 months, they start accruing more PTO, and this increase continues the longer they stay with the company. “They are part of our family, and this keeps them from burning out.”
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