Operations

Avis Gets into Chauffeured Transportation

LCT Staff
Posted on June 6, 2007

PARSIPPANY, N.J. — Avis’ announcement that it will now offer chauffeurs to go along with its rental cars in 10 major U.S. cities is an important development, however the real impact on the chauffeured transportation industry will take time to determine. This is not the first time that a car rental company has tried a program like this in the states, and it’s a commonplace practice in Europe and Asia. The main issue will be whether corporate travelers use the Avis service at a significant volume.

Analyzing the numbers, traditional chauffeured transportation companies are less expensive to use on short runs like airport transfers; however if a chauffeured vehicle is needed for eight hours or more, the Avis program does offer value.

Here’s how the Avis program works: you have to be a member of Avis Preferred or one of the other frequent renter clubs and book 24 hours in advance. You have to rent a car and pay the daily rental rate plus taxes and rental surcharges. The chauffeur costs $30 an hour with a minimum of three hours, plus a 15% service charge. Of course, the customer would also very likely tip the chauffeur an additional amount. The numbers might look like this:

$60 (typical daily rental charge of $50 plus 20% in sales tax and rental surcharges; this figure could be much higher.)

$103.50 ($30 an hour for minimum of three hours, plus 15% service charge)

Total: $163.50 (plus tip)

A typical airport transfer rate for companies in the limousine industry is $60 (plus service charge and tip). So the value of the Avis program would come into effect for longer trips with a chauffeur. For example, an eight-hour chauffeured trip using the Avis example above would come out to about $340 plus tip. Many chauffeured transportation companies would charge about $500 plus tip for eight hours of sedan service.

Chauffeurs will be supplied by San Mateo, Calif.-based WeDriveU Chauffeur Service, which has about 200 chauffeurs in New York, Boston, Chicago, Los Angeles, San Francisco, Washington, D.C., Phoenix, Miami, Detroit, and Dallas. The company may expand into other cities such as Minneapolis and Houston in the future. WeDriveU says that it carries out thorough background checks on its chauffeurs and that it currently provides service to several Fortune 500 companies. According to the company, most of the reservations since Monday’s announcement have been placed for transactions in New York City, Phoenix, San Francisco, and Los Angeles.

There may be legal issues involved with municipalities that tightly regulate the chauffeured transportation industry. In another media report, the New York Taxi & Limousine Commission would not comment on the Avis program or whether it has jurisdiction over this new Avis program. When asked whether Avis plans on getting active in the industry, a company representative said, “We are not a limousine company, we are a car rental company that has a strategic alliance with a company that provides drivers, and this program simply makes it more convenient for Avis customers to benefit from the convenience of having a driver.”

Source: LCT Magazine

LCT Staff LCT Staff
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