What’s Your Story?

Last month I was invited to attend a dinner party at the BusCon Expo in Indianapolis. One of the guests was the managing director of ground transportation for ACE Parking. He was a soft-spoken young man, shockingly only 28 years old. I watched him as he quietly listened to the stories told by the “old folk” and was intrigued by his mature and thoughtful demeanor.

Dinner was almost over when I got his attention and bluntly asked him, “What’s your story?” And little did I know what a loaded question it was. This is what he said:

His mom fled Guatemala when she was in law school and accosted by rebels who were forcing students to change to their democratic party. Her father wasted no time and sent her packing. She traveled alone through Mexico and into Los Angeles where she found relatives to live with. She worked downtown as a transportation coordinator while continuing her studies at UCLA. She fell for an immigrant from Pakistan but sadly, when she became pregnant, he left her and was never to be heard from again. She raised her only son in the heart of Los Angeles’ worst ghetto – Watts. They lived on welfare in Section 8 housing.  

At age seven and into his youth, her son was tasked with spending his days at LAX counting the number of passengers of shuttles and sending those reports to his mother who would plug them into spreadsheets for her company. While he remained in school, he was no stranger to gang life until the fateful day he was arrested. He spent time in jail, and that was where he had his ah-ha moment and decided he needed to get into college, get out of the projects, and leave the ghetto behind. He studied hard. He attended a UC college and went on to get his MBA at Pepperdine University, amassing a $90,000 student loan debt. On the first day of school he met the love of his life, and just a few months ago they married. After graduating, she founded her own cyber security company to boot! They just bought a home in Laguna Beach, Calif. He has big aspirations for where he wants to take the family owned company, but for now is getting used to being a senior manager as a Millennial overseeing a 120-vehicle fleet plus a large staff.

That’s what I got from asking the simple question, “What’s your story?”  

There has been a wave of negativity in this industry if you haven’t noticed. The game has changed and many operators are frustrated. We understand change happens to all industries, but having to own buses has complicated things for many. Diversification means a more scientific approach to cost versus usage. That means figuring out how to make maximum profits with varying types of vehicles while selling and serving in new ways to new industries. I get it.

But I want you to think about this young man’s story and remind yourself you have it in you to focus on solutions, not problems. Get unstuck by tasking your team for ideas. Fight burnout by spending more time being creative. You are the company you keep, and misery hates to be alone. So move away from those energy vampires. We are in a great and ever evolving transportation market, and its spoils will go to the victors!

Keywords

entrepreneurship   LCT Publisher   networking   Sara Eastwood-Richardson   state of industry   

 

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Visit To Motorcoach Plant In Spain Gives Great Insights

Last April I was invited to tour the Irizar motorcoach plant in San Sebastian, Spain, along with 12 bus operators from North America.

I learned a lot. It was fascinating to see a European bus facility in full production, to be sure, but the greatest intel I got was from talking to the hosts and spending time with the operator guests. While I see the differences between the “big” buses and luxury shuttles, we are all so similar in many ways. A vehicle for hire — for charter, I should say — is distinct from courtesy transportation.

That’s an important footnote. Because if you are in the market for a bus, before you make the leap, know exactly what you intend to do with that bus. For instance, if you plan to procure contract work in your market, what kind is it? If you want to get a contract with a parking lot owner to outsource their shuttle work, or a hotel to airport shuttle, or a retirement home that provides transportation to town for their occupants, those shuttle buses are likely to be complimentary. Therefore, you would not invest in a luxury coach, but a courtesy shuttle instead, or a basic people mover.

However, if you are targeting collegiate contracts, you can’t secure that business without being able to offer a large coach. Does it have to be over-the-top deluxe? Probably not. But you must get that detail before you invest in a bus. Then, if your market is a convention, retreat, or special meeting destination, be sure you talk to meeting planners about what they need for equipment before you plunge in and buy. I know an operator with many clients from Dubai. He must have top-of-the-line buses for that sector of his business. 

Tours and staycations continue to gain popularity nationwide, so if your market teems with tour potential, investing in buses is a good idea if you can offer the right ones. The comfort of a bus on even a day tour is paramount to the overall experience. Do your homework.

The volume of local business dictates the size and scope of any fleet. Never just own a vehicle hoping to attract business; build your book first. Start out as your own DMC and outsource to trusted local bus affiliates. You will know when your book is built up enough to bring that business in-house by the volume, but always consult your accountant.

On the contrary, if you are going to play in the bus space (and I think you should if your market decrees it will make you money), I encourage you to make friends with all your motorcoach peers. Why? Because controlling your fleets is critical for long-term success. And rather than have too many buses or not enough, you should pool resources at the local level and lean on strategic alliances for overflow. This way you aren’t paying for underused metal.

Fill all gaps in your seasonal work. Nearly everyone in this country has peaks and valleys in their business. You should be ready to support both. At least four months before your high seasons, make sure to get aggressive with driver recruitment. Yes, it can take that long to find and train one good bus driver. Get in front of the slower months early on as well.

For example, I spoke to an operator on my trip who fights the summer doldrums in Texas by farming his buses to New York China tours. New York & Company, the promotional arm for the state, predicts more than one million Chinese tourists will visit Manhattan in the summer of 2018.

We hope you enjoy reading our “bus” themed issue. Don’t forget to email us your comments, questions, and concerns so we may help you! We are here to serve. 

Happy Trails,

Sara

Keywords

bus manufacturers   Irizar   LCT Publisher   motorcoach operators   motorcoaches   OEMs   Sara Eastwood-Richardson   

 

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Does The Term Limo Help Or Hinder Our Industry?

Uber created a brand and an all-new car service category in just a few short years, proving it is possible, and maybe even hip, to take something old like the word “limo” and separate the industry out by rebranding ourselves with a new name or reference.

I interviewed one of the partners of Jetsmarter.com the other day. He was quite fascinating and will be speaking at LCT-NLA Show East in Atlantic City, N.J., Nov. 5-7. I plan to play out the interview live for all of you.  

One thing he said, which I know all of us keep butting up against, is our industry “brand” remains unclear in today’s world of “for-hire transportation.” The word “limo” to the consumer is still tightly aligned with specialty vehicles and traditional stretches. A person simply would not think of calling a “limo” company for a shuttle bus, nor would many people think of a “limo” service when needing a ride to the airport.  

Conversely, if you use the words bus or charter in your name, I doubt you would get many new leads for sedan service or nights-on-the-town. For those of you who have moved away from the stretch business and diversified your fleets, it might be time to notch out a newer brand name that encompasses it all, broadens our business scope, and sends a “new” and “contemporary” message about who we are TODAY.

It’s interesting to note that taxi, shortened from taxicab, has gone unchanged for hundreds of years. Taxi, which came from the Latin word tax, to charge, and cabriolet, an old name for carriage, is well branded and still relevant today. Bus, derived from omnibus which in Latin means “for all,” is even older than taxi.

By contrast, Uber created a brand and an all-new car service category in just a few short years, proving it is possible and maybe even hip, to take something old like the word “limo” and separate the industry out by rebranding ourselves with a new name or reference.  

I Googled the term “for-hire vehicle” and this is what came up:

A vehicle for hire is a vehicle providing shared transport, which transports one or more passengers between locations of the passengers’ choice (or close to it). Didi Chuxing, Uber, and Grab are few of the biggest companies that focus on the “vehicle for hire” concept. The most common vehicle for hire around the world is the taxicab; other vehicles for hire include pulled rickshaws, cycle rickshaws, auto rickshaws, motorcycle taxis, limousines, party buses, horse- drawn carriages (including hackney carriages and caliches), and water taxis. Aircraft also can be chartered.

Shared taxis, paratransit, demand responsive transport, public light buses, and shuttle buses are hybrids — halfway between taxicabs and buses — and operate along somewhat fixed routes, with some flexibility in where passengers may be picked up or dropped off.

Shuttle services are also offered from many airports around the world: They take multiple independent passengers, like a bus, and usually run between two fixed areas (typically an airport and a downtown or hotel area), but will often pick up and drop off passengers anywhere reasonable within those areas, like a taxi.

I say it’s a worthwhile discussion to be had in person at LCT-NLA Show East. I am thinking maybe just the word “coach” will do? I ask you (since I am completely stumped on this) to think up just one word that would brand those operators running diversified fleets who want, and really need, to change their messaging. It’s a brainbuster to be sure.

Keywords

Branding   ground transportation   industry trends   LCT Publisher   Sara Eastwood-Richardson   Uber   

 

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Lessons Learned At This Year’s LCT Leadership Summit

Over the years, the Top 50 Largest Fleets rankings have cultivated a standalone annual issue. We sync the July issue with the Global Business Travel Association’s annual convention because it’s a very popular publication with travel managers. It’s also a perfect opportunity to spotlight the leadership and creative thinkers within our industry.

Much of the content in this month’s issue is inspired through interviews, networking, and presentations that took place at our annual LCT Leadership Summit in Miami Beach. If you’re not familiar with the event, it is a CEO-style think tank. It’s a place for our industry’s thought leadership to gather for a three-day pow-wow where we explore trends affecting our overall economy and our businesses. Basically, big picture stuff!

It’s my personal favorite of all of our events. The Summit truly serves to get the juices flowing and the ideas out of everyone’s head and onto strategic plans.

It’s highly motivational to watch this particular group of operators problem-solve and glean outside advice from leaders in tech, the political arena, and the entrepreneurial world of business pioneers (and the food is great too).

I’m presenting a few of my favorite tidbits and takeaways on leadership below for your reading pleasure:

1. In order to achieve greatness, you must create a culture of optimism. You have to truly believe in the impossible being possible. (Corey Lewandowski, Trump leadership team)

2. Be your price driver. Price is market driven and relies on supply and demand. If you want your pricing to go up, create more demand for your service than you can handle. That will not happen if you sit in your office and wait for the phone to ring. You must proactively market your company. (Diane Forgy, Overland Chauffeured Services, Kansas City, Mo.)

3. Innovation is essential for not only success, but for survival. The innovators are our leaders. You cannot separate the two. Whether it’s by thought, technology, or organization, innovation is your only hope to solve challenges. (Brian Solis, technology anthropology expert)

4. You must love what you do. To succeed, you must obsess over it and let it consume you. No matter how successful your business might become, you are never satisfied and constantly push to do something bigger, better, and greater. You lead by example not because you feel like it’s what you should do, but because it’s your way of life. (Billy “The Coach” Sheehan)

5. Compete with yourself and no one else. Focus on beating all your business averages. Be harder on yourself and strive to break your own record no matter how long you’ve been at this game. At the end of the day, your business success is all that matters, so who cares what the other guy’s doing? (Scott Solombrino, CEO DavEl/Boston Coach).

6. This year’s overarching message was a deeper dive into our International LCT Show theme in Las Vegas: Embrace change. Make doing business easy. Be passionate and real about your company’s future. Empower your team with new responsibilities, slow down, and be present inside your businesses.

Entrepreneur and author Gary Vaynerchuk, founder of the Wine Library and guest speaker at our 2014 LCT Leadership Summit, had perhaps the greatest quote I’ve heard that’s so relevant to what we all do:

“We live in what I like to call the ‘thank you economy’ because only the companies who can figure out how to mind their manners — in a very old-fashioned way, and do it with authenticity, are going to have a prayer of competing.”

Keywords

industry trends   keynote speakers   LCT Leadership Summit   LCT Publisher   leadership   Sara Eastwood-Richardson   

 

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Find Your Cool Factor: Stats Reveal Changes You Should Embrace

It brings me great pleasure to announce our 2017 industry statistics book. LCT conducts a comprehensive industrywide survey each year to provide you with a guide-by-numbers on how our industry is doing. Many thanks to those of you who completed this detailed survey. I know it’s a lot to ask in our frenetic world, but for the good of the whole, enough of you responded for valid results. LCT is proud to be the sole source of reliable industry statistics for more than 25 years. So let’s look at the landscape:

Nearly half of the market is reporting revenues up. That’s great news, except expenses are higher as well. The goal here is to boost bottom line growth. So we’ve got to focus on managing our expenses. I said this at the State of the Industry address during our International LCT Show in March. We must embrace technology to streamline our processes and scale back our headcount.

The No. 1 cost center in this business is human capital. I mentioned how artificial intelligence and bot technology are becoming mainstream in major customer service industries. As crazy as it sounds, just around the corner a refined version of Siri is waiting to be the voice behind your call centers, your customer service department, and dispatching. I am excited to see that 85% of chauffeur communications are done with smartphones. Mobile technology is the primary reason why our global economy is undergoing such a paradigm shift in how we do virtually everything. Insurance rent rates went up nearly 80%. That is a major jump. Insurance costs are your second biggest line item expense.

I’m a bit concerned about the mood in our industry. Four out of 10 respondents said market conditions are getting worse due to TNCs. More than half report losing some business to Uber and Lyft. This will bring morale down unless we sit down and carve out a plan. Your plan has to involve giving what the consumer wants and live up to their new expectations. You need to spend more time talking to your customers and involve them in refining your services. One size does not fit all, so what works in one market may not in another market. To understand how to reposition your company or create new divisions for your services, you need to know what your specific market wants and values for their money.

Finding and retaining chauffeurs is your top business concern. First, you must keep the ones you have happy and stop turnover. Invest in training and more importantly retraining. Spend more time with your chauffeurs and create a community. Use your iPads to send messages out personally to chauffeurs on the road every day. Believe it or not, money is not the motivator for staying with a company. Employees stay with managers they feel value their work, involve them in the business, talk to them regularly, and cultivate relationships. The only way to breed loyalty is through connection at the human level. We are challenged in a world where people are flocking to work for cool, hip companies. We’re considered old school by the new workforce looking to participate in start-ups or exciting new companies. I think this is something easily overcome.

My parent company has been around for more than 55 years. It recently renovated its offices; down with the wood paneling and up with the bright colors in conversation pods complete with beanbag chairs and flat screen TVs, and great new workstations. Look at your businesses from the lens of a Millennial employee, and when in doubt, ask and look around. Go on Pinterest and type in cool office spaces. We should make our business attractive from a staff and a culture standpoint. We need the cool factor!

This industry has been spending a lot of money on equipment which will put pressure on the P&L. That’s normal for businesses growing or changing. But don’t forget about bottom line growth. You need to get out there and sell. Look closely at your top 10 accounts and find ways to increase their spending by 10%. Imagine how much revenue growth you would enjoy! Look for ways to streamline and reduce costs. Get sticky with your customers and find out how they perceive customer service in today’s marketplace, and then provide it for them. Fall in love with technology. It won’t hurt you!

Keywords

industry surveys   industry trends   LCT Fact Book   LCT Publisher   research and trends   Sara Eastwood-Richardson   state of industry   

 

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Ask Your Customers: “Is It EASY To Do Business With Me?”

We spend a lot of time focused on Uber — and it’s important to follow them and stay on their compliance tail. However, whether Uber stays or goes does not matter. They have successfully changed consumer expectations of for-hire transportation. Until the next best thing, the Uber “technology” sets the bar for bookings.

At last year’s International LCT Show, I opened the State of the Industry presentation by saying, “Arrogance is a formula for leadership failure. The history books are filled with fallen companies run amok by arrogant leadership. While Travis Kalanick waits for a world of driverless vehicles, he still has to survive the road to getting there. And that is one bumpy road.”

This hasn’t changed much from a year ago. Uber’s background checks for drivers are still under serious scrutiny and more people don’t feel safe using them. So the drum beat continues; keep fighting the unfairness of TNC commerce in your markets. But don’t lose sight; you have a company to run!

2017 Outlook
All industry revenue markers for this year are positive. So what’s stopping us from fully cashing in? Only our own mindsets. And, to be honest with all of you, our industry is maybe a little bit too crowded.

Just after the worst of the Great Recession in 2010, we had fewer than 6,000 operators. Fast forward to today, there are more than 11,000. Because this is an easy-entry market, it continues on a cycle of expanding and contracting. When the pie slices get smaller because of increased competition, everyone makes less money. There comes a point when consolidation is necessary. This presents loss and opportunity at the same time. Companies that want to stay in the game, who want to enjoy the upswing that comes AFTER a contraction, have no choice but to invest in their infrastructure. Those too “pooped out” can sell, merge, pass the reigns over to a next generation relative, or shut the doors. And that’s all OK — it’s part of our business ecosystem.

If you want to stay in the game, you need to make sure of one thing: Make all things EASY on your customers. That’s the secret sauce and the ONE thing Uber did that revolutionized for-hire transportation. THEY MADE IT EASY. Did they invent for-hire service? No. But from the outside looking in, they were able to identify a clunky system for logistics that was DIFFICULT TO DEAL WITH.

So an outsider, who has no predisposed beliefs on how things work inside the hail world, comes along and says, “What If?” What if the experience was EASY? What if we figured out a way to remove all the pain points and make for-hire transportation actually enjoyable, starting with EASY?

The two most crucial aspects of your business are the booking and the ride. Uber’s technology has created a mind shift in the consumer. They love EASY and the Uber booking app presents it. Whether or not your client has come out and said it is irrelevant. The Uber app is a painless experience when booking a ride and people love that EASE. So, replicate it.

As part of your commitment to technology, you need to use it to gather immediate/real time client feedback — an essential practice to ensure your client feels the love and your intel pinpoints their impressions of your service and your brand. The other big beef the business travel community has with this industry is, they claim, outside of getting contracts signed or renewed, they never hear from you throughout the year. That creates a void in your relationships. So start here and work outward from your personal clients to your affiliate connections, strategic alliances, and to new business leads that can come from all of this.

The revenue outlooks into 2017 are excellent. So there’s much to look forward to. Be excited for things to come that will make your business easier to run and more fun…and more profitable!

Keywords

building your clientele   business growth   ILCT 2017   reservations   reservations management   Sara Eastwood-Richardson   smartphone reservations   state of industry   staying competitive   

 

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What The Heck Is A Financial Dashboard?

At a recent weekly editorial meeting, we discussed the F&I (finance and insurance) issue and moved onto the subject of pricing strategies for our industry.

One of our writers suggested that to best price your services, you must fully understand the costs to operate your business. To make matters even more difficult, YOUR costs are unique to your market and circumstances. I wish we were able to just tell all LCT readers there’s a standardized pricing model; unfortunately, that’s not the case.

The writer did call out a really smart operator who uses a customized dashboard to track all of his expenses, and my first thought was, what’s a financial “dashboard?” So, I looked it up on Wikipedia and now I will share this with you!

Dashboards often provide at-a-glance views of KPIs (key performance indicators) relevant to a particular objective or business process (e.g. sales, marketing, human resources, or production). In real-world terms, “dashboard” is another name for “progress report” or “report.”

Often, the “dashboard” is displayed on a web page linked to a database which allows the report to be constantly updated.

Digital dashboards allow managers to monitor the contribution of the various departments in their organization. To gauge exactly how well an organization is performing overall, digital dashboards allow you to capture and report specific data points from each department within the organization, thus providing a “snapshot” of performance.

• Benefits of using digital dashboards include: 
• Visual presentation of performance measures
• Ability to identify and correct negative trends
• Measure efficiencies/inefficiencies
• Ability to generate detailed reports showing new trends
• Ability to make more informed decisions based on collected business intelligence
• Align strategies and organizational goals
• Save time compared to running multiple reports

Dashboards track your expenses in real time and will compare and contrast trends in your overhead and sales. They are visually easy to follow, which means if reading traditional financials is painful for you, a Dashboard is your saving grace. Google it and get on board. This is a must-have for all operators.

Related LCT article: A Dashboard Lights The Way To Profits

Keywords

business management   finance   financial planning   How To   LCT Publisher   profits   Sara Eastwood-Richardson   

 

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What If?

Every industry is built around longstanding beliefs about how to make money. Ours is no exception. The chauffeured transportation marketplace is governed by beliefs based on shared notions about what our customers want and expect, regulations, cost drivers, and competitive differentiation. Over and over again, you read in LCT and hear via the Shows the uninfringeable truths about how you must operate your businesses. Then, someone from the outside comes along and turns those truths into myths. 

Disrupters have one advantage: They have clear heads. They are able to assess the workings of an industry business model without preconceived notions, and therefore are free to ask “What if?” What they don’t have going for them, however, is a clear sense of what drives profitability. You know the nuances of this marketplace better than any outsider. So what’s stopping US from asking the “What ifs” and creating our own shake up? Only our own mindset. That’s really it, folks.

Change typically happens when a person or entity feels pain or pressure. So assuming we all agree we are feeling some thanks to the likes of mobile technology, let’s begin there. Follow me on a series of “What ifs” and new world truths, and decide what you can do inside your business differently. Since mobile technology has had the greatest effect on just about everything we do, let’s begin there: 

What if you fully embraced mobile tech and therefore. . .

• reduced your dispatching overhead? 
• eliminated your call center?
• allowed people to work from home, reducing overhead and offering work flexibility?
• improved deployment time and client access by keeping fleets with drivers?
• used timekeeping, GPS technology, and dashboard cameras to manage/monitor drivers, performance, and fleets?
• used technology for immediate client feedback, and thus increased retention and intel on chauffeur performance to improve employee incentives?
• used technology for training and retraining for better and more efficient employee performance?
• used technology to better communicate from the C suite to the chauffeurs via video so your employees had regular dialog with the owners?

Most major workplace trends don’t evolve overnight. If you know where to look, you can disrupt traditional ways of doing business by reframing the constraining beliefs that underlie the prevailing modes of value creation.

Look through different lenses at every aspect of your transactional business, and know what your clients want and need today, not yesterday. The market is ever-changing and there is SO MUCH to look forward to and capitalize on, if you dare ask yourselves WHAT IF?

Sara Eastwood-Richardson, LCT Publisher
sara@lctmag.com

Keywords

business management   business trends   industry trends   LCT Publisher   leadership   mobile technology   Sara Eastwood-Richardson   

 

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Networking Unplugged: Try Something Different This Year

The BIG Show is coming soon to Las Vegas. Our theme this year is Embrace the New. It’s a nod to the future and to rethinking all we do — a subject we at LCT believe is timely given the shake-up of the status quo.

That being said, according to YOU, one of the primary reasons for investing in attending the International Limousine, Charter & Tour Show on March 13-15 is to “network.” At a recent team meeting, I asked my staff what that really looks like.

Seriously, I hear it all the time, “The networking was outstanding!” I see the masses; I hear the din of conversations all throughout the corridors of the Show, so I get that people are schmoozing.

I see this happen every year — the exact same thing — and I just have to wonder out loud what tangible results are coming your way. Are we actually doing it right, or do we just go with the flow and assume networking at the LCT Shows means a heck of a lot of business cards are swapped?

Networking loosely means making contacts. I know if I ask operators at the Show if they made contacts, I would hear YES. However, making contacts doesn’t necessary increase your client book or make you money. Shouldn’t that be the goal? Of course. So let’s change things up this year and try on some different ideas:

1. Build a press kit and take it to the Show: Include “reprints” of your print ads, client testimonials, copies of your insurance certificate, your LCTConnect.com profile (or a basic company story), news clippings of any press, awards, and accomplishments, a business card, and pictures of your fleet and staff (if you have a company brochure you can include that, too). Invest in pocket folders for all of your collateral that has your logo on the cover. Voila, you are official.

2. If you can cobble funds together to buy a general sponsorship, do it: The secret is you will be given the same SPONSOR ribbon to wear that the huge Show donors have. This will help you stand out against the 3,000 to 4,000 operators attending and is a good conversation piece. Plus sponsors get branding opportunities no one else gets. (Email me if you are interested or go to lctshow.com).

3. Pre-set appointments — even with my editorial team: Contact people on your “must meet” list. Even if an outreach to those people goes unanswered, it’s a great opener at the Show. Find them and say, “Hi! I sent you an email a few weeks ago as I was hoping to introduce myself to you at the Show.” Put it on your planner as a Show goal to meet as many on your TOP list as you can. Also, have another plan to meet 10 new faces a day who are not on your target list.

At the Show, time is of the essence with so much action. First and foremost, smile, look friendly, and say hello to people (don’t let me catch you nodding and looking like the Secret Service!)

Skip the small talk and ask a personal question, such as, “Where are you from?” Don’t start off talking about yourself! Find the “me toos” — establish a connection as soon as possible. Pay a unique compliment. As the saying goes, “People will forget what you do and forget what you say, but they will never forget how you made them feel.”

Ask for an opinion, but be sure it’s something on point. You don’t want to throw a person off. Asking an opinion is an excellent way to engage. For example, “I am curious if you feel the TNCs in your market have had any real impact. Thoughts?” Be present. Don’t you hate it when you are talking and the other party is rubbernecking or checking a smartphone? It’s rude, so don’t do that to others.

It may seem counter-intuitive, but showing up early at a networking event is a much better strategy than arriving late. As a first attendee, you’ll notice the room is calmer and quieter — and people won’t have settled into groups yet. It’s easier to find other people who don’t have conversation partners yet.

Be sure to check out more networking tips in the extended online version of my column at LCTMag.com. Embrace the New this year by starting out at the Show with a resolve to being open to CHANGE at the most powerful networking event in the world. This is an important piece to your sales program. We wish you a wildly successful time in Las Vegas!

Keywords

business growth   ILCT 2017   LCT Publisher   networking   public relations   Sara Eastwood-Richardson   tradeshow preparation   

 

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The Trump-Effect: What The New Administration Means To Us

We can all agree we are in for a ride; what’s not clear to many is if it will look like “Mr. Toad’s Wild Ride” or “It’s A Small World.”

I did my own “Ben Franklin chart” and would like to show how the pros outweighs the cons for you and this industry under President Trump — by a substantial margin.

On labor, Trump is focused on job creation with an owner’s best interest at heart. That means I expect him to push hard against a federal minimum wage. He has pressure from states complaining no federal increase has happened since 2009, but it will be minimal compared to Hillary’s $15 per hour. Expect it to go to $9 per hour.

This administration will not want to expand the sharing economy model of pushing institutional tax obligations to workers. They will embrace this new group as an organization of the freelance public, but will more likely close tax loopholes. Trump will make good on his promise to lower corporate taxes and healthcare overhead much faster than you think. Thanks to a Republican House and Senate, action items important to Trump will be approved efficiently.

Trump’s personal disdain for red tape will prove a positive for you. Anything unjustifiable will be on the chopping block. The sharing economy will seize this opportunity to get rid of regulations, but thankfully Trump’s team appears serious about keeping the ones that pertain to safety in our industry. So I predict sharing economy interests will fall flat and we will get what we want (with the right advocacy).

I assert this despite the announcement of Uber’s CEO joining Trump’s business advisory council. In my view, this advisory group is a smart play; keep your friends close and your enemies closer. That’s a cue from Trump’s bestseller, “The Art Of The Deal.” He needs Silicon Valley to simmer down.

Trump can’t be bought and owes no one. This industry has a golden opportunity to be heard over the noise of lobbyists for special interests. Unlike any President of our lifetimes, Trump is unencumbered, and best of all, he has an affinity towards entrepreneurs and small business owners like you.

Trump is focused on making America safe. That will result in increased global travel for the U.S. If a meeting planner must choose among unstable countries or the U.S. to bring their corporate groups to, we’ll win and that’s great for you!

So as Betty Davis once famously quipped, “Fasten your seat belts. . .”

Keywords

DOL issues. Department of Labor   Donald Trump   economic outlook   labor laws   LCT Publisher   Sara Eastwood-Richardson   

 

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That Which Does Not Kill Us Makes Us Stronger

2016 is drawing to a close and what an interesting year it’s been. Donald J. Trump is our President-Elect. Who would have thought? Now, in hindsight, it seems the better question to ask is, “Who wouldn’t have thought?”

Trump will be the voice of the forgotten middle class worker who said, “No more.” He is anything but the poster child for America, or conversely, is he the perfect fit to represent us in a time of near civil war?

After all, the Founding Fathers of our great country were anything but refined, professional career politicians. Perhaps we are coming full circle.

For the first time in my life, I avidly followed this political season. I watched virtually every news station daily and listened to talk radio with fervor. I am no politico, but this presidential race captivated me. I drew many parallels from it that relate to what is happening with my job and to all of you.

What unfolded before us is what happens to a group of like-minded people who are in a perceived fight-for-their-life. In 2015, my guest speaker at the State of the Industry, held during the International Limousine, Charter & Tour Show in Las Vegas, stood in front of 2,500 operators and predicted that, thanks to Uber (and the fact we were running dinosaur companies in an old industry), we would be falling off a “fiscal limo cliff” by year end. It was time for real panic.

There was one flaw in this and among all the pundits. The institutionalized “executives” who did the betting have been out of touch with the heart of America (that’s you), so they lost the odds. When faced with a choice to do or die, we do. This industry is amazingly creative and resilient, and it’s because the survival instinct has not been snuffed out of us. We are not paper pushers. We are not career politicians or living above reality in the C-suite. Thank God.

We are the pioneers. We are the street-smart, ass-kickers who rally for the fight in the spirit of protecting our livelihoods. So instead of a mass chauffeured car industry implosion brought on by a $50 billion behemoth called Uber, our industry got serious, banding together on all local and national fronts. You turned out in droves to our conventions to stay current, supported the NLA, and devoured LCT for trade news and education. So now we are the ones looking toward a brighter, more tech-centric 2017, while our friends in the Silicon Valley are in the fight of their lives to avoid their own cliffs.

To all of you, our industry soldiers, I salute you on behalf of the LCT team. You are amazing. Stay connected and committed to excellence.

Merry Christmas, Happy Hanukkah, Blessed Kwanzaa, and cheers to 2017!

Keywords

business strategies   Donald Trump   industry politics   LCT Publisher   Sara Eastwood-Richardson   tips for success   

 

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You Better Know These Tech Terms To Stay Relevant

Whether sitting through technology demonstrations, discussion groups, or seminars, I am often caught off guard by the “new tech” terms thrown around that I don’t understand (and am too embarrassed to ask)!

Since the debut of mobile apps, we have been inundated with an endless loop of tech speak. You hear these at our trade shows and among tech providers. I thought I would break them down for you in the spirit of helping you follow along. I found these in a list of “Technology Terms Every Entrepreneur Should Know” compiled by Marci Martin of Business News Daily. Hopefully, this list will give you clarity:

Data center: A facility that houses computer and data-storage systems, including servers. Many data centers are owned by ISPs or large companies, such as Google or Amazon.

Linux hosting: An open-source operating system that can be installed on Web-hosting servers. Many servers run Microsoft operating systems, but some businesses believe Linux is a more secure and reliable option, and prefer to choose Web-hosting services that run Linux.

Back end: What you see when you click on a Web page is the front end. The back end is everything else behind the scenes of that page, like Web servers, databases or applications that make the page work. The back end can determine what search engines see.

Virtual private network (VPN): Allows users to connect to a private network from anywhere for added security. For instance, instead of using the public network at a local coffee shop or hotel room, which has more security risk, employees can connect to your private network with the same security as in the office.

Application programming interface (API): Helps different components of software work together so they all seem to run as a single software. Such interfaces are common and help coordinate numerous “moving parts” to make a program or app easy to use.

Domain name service (DNS): Every domain name is translated into numbers as an IP address when entered into a browser’s address bar. The DNS is a directory of those numbers.

Open source: Describes code available publicly that anyone can use. People can modify it for their purposes.

Machine learning: An example is Siri, Apple’s AI (artificial intelligence) personal assistant. By inferring a general set of rules, refined by use, the algorithm finds an approximate solution in place of having a specific algorithm for each function.

Cloud hosting: Companies that don’t lease servers may instead pay for data to be stored on virtual servers. These servers are said to be based in the cloud if they can be accessed only with an Internet connection. Businesses typically access cloud-based servers through software interfaces specific to their cloud-hosting service providers.

Cloud backup: Data backed up in the cloud is transferred from a business to the data-storage provider’s servers over the Internet. Cloud backup can be set up automatically, making it a convenient data-storage option.

Software as a Service (SaaS): Otherwise known as “software on demand,” this term refers to cloud computing. SaaS is a way of delivering business software via the Internet. SaaS usually can be paid for monthly, making it more affordable than other software options.

Content management systems (CMS): Used to manage the content of a website. They usually include a Web-based publishing feature, which allows for editing and formatting of content without the use of a Web coding language, like HTML. Many CMS also feature one-to-one marketing tools that enable targeted advertising.
Business intelligence (BI) software: Information a business collects about itself. This can include a broad swath of data, which is why businesses often need BI software. These programs let companies keep all their BI data in one place so it is easier to access and analyze.

Customer relationship management (CRM) software: CRM refers to the way a business collects and manages data about its clients. Companies use CRM software to track all the information they collect on clients, such as service calls made or previous products purchased. This helps businesses close future deals and grow relationships with customers.

Content curation: Choosing content to share online. This can be cultivated from existing content, but should always be made new or “fresh” in some way to stay relevant, and to meet search engine algorithms for higher ratings.

Engagement: Knowing how many people use your online resources and how often they interact with your social media. The more your audience engages with social media or your website, the more your message resonates.

Organic: Content that visitors view via their natural or “organic” keyword searches instead of through paid promotions.

Keywords

industry education   Information Technology   LCT Publisher   mobile technology   Sara Eastwood-Richardson   software   

 

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The Bottom Line Is The Bottom Line Has To Move Up

I am concerned about this industry’s profitability; so much so, I asked my editors to earmark more “how to” pages of LCT than ever before to the subject of bottom line growth — including pricing strategies.

No matter what size operation you have, if you’re not reaching a 10% margin (or better), now is the time to set things on the right course for 2017. If you’re not there, don’t panic — you are far from being alone. In fact, if you are at 10% or above, congratulations! You might well be in the slim minority of companies operating at that level.

What happened to our margins?
Let’s go back to 2009 when the recession hit and the economy took a nose dive. We all went into a fast and furious two years of cost-cutting and fleet and staff downsizing. Then things leveled off. We tight-fisted our businesses and were extremely cautious about fleet utilization and overhead.

Finally, it felt safe to enter the waters of rebuilding our business with new vehicles, better (and more expensive) employees, and new technologies. All the while, as we have reinvested in our infrastructure, what have we done to pricing? Unbundled packages, removed surcharges, and…well? You can fill in the rest of the blanks.

How do we build back our net profit margin?
It’s easier than you think. First, get control of your overhead. I spoke to Dan Goff, a very bright operator, last week. He happens to be a CPA and a speaker at the International LCT Show next spring. We agreed that too many operators do not understand their true operating costs per vehicle. Knowing that is a crucial first step in regaining cost control. A focus should be on maximizing utility, and one growth area you should consider is “dead legs” and filling that capacity.

Second, revise your accounts receivable program. Jim Luff, former operator and now a staff editor for LCT, agrees. He told me a small-fleet operation he recently visited with a total of under $500,000 in gross revenues had over $70,000 in A/Rs lingering on his books. That is a huge drain.

Third, market smarter. Instead of looking for ways to increase sales by, say 15%, look for opportunities to decrease the cost per customer acquisition by that same 15%. Focus on upselling your top 10 customers instead of trying to find new ones. It’s more effective and less expensive.

Fourth and finally, train your employees to increase productivity. Too many operators make excuses for not earmarking the time to train and re-train staff. I can’t stress enough the importance of disciplining yourself to do so. Time is money. If you added up all the costs of mistakes and human error, you would be shocked. It pays in dividends to have a well-oiled machine and to hold your team accountable for excellence — but they must understand what that is and be reminded often.

The writing staff at LCT has been tasked with giving pricing and profiting topics top priority in the coming months. If you’ve got some ideas on how to help operators make more money, or better yet, keep it, please reach out to any one of us here. Good luck!

Keywords

bottom line   building your clientele   business growth   finance   financial planning   LCT Publisher   profits   revenue growth   Sara Eastwood-Richardson   

 

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How To Zig When Others Zag

The idea behind Uber came from a techie named Travis Kalanick. In a perfect storm of desperate, out-of-work recession victims and the overwhelming disdain towards an archaic, hail-based taxi business in San Francisco, Kalanick saw his opportunity. With the help of some Silicon Valley programmers, he led the development of a slick app based on GPS-styled technology that linked to a black car type service call Uber.

Our industry had nothing to do with this. We are not a hail industry. You cannot find an article that compares Uber with chauffeured car. Uber, along with its TNC followers, is a hail, or better known in the New Economy as “on-demand” service. It directly set its sights on competing against taxis, not us. That said, we have found ourselves caught in the crosshairs. The TNC market has exposed our weaknesses — primarily our identity. We have failed as an industry to set ourselves apart from the TNC business model. We know we are not taxi companies. We are not shuttle providers. So, who are we? Who is our primary target market? Do we really know our clients? What do they want from us today? In other words, what are the needs and how are we filling them by today’s standards (not yesterdays)?

The ground game is on. The activity on the local level is good, but should be better. Not enough operators step up to help fight at the state and national levels. In most cases, fewer than six regional representatives attend regulatory meetings at any time. The TNC pressure is felt more in the urban markets, but everyone still can and should be doing some kind of work with the fight — even if it means simply signing a petition.

Equally important is our branding as an industry. It’s not surprising the average consumer doesn’t know we exist. We have always been a reservation-based, high-end option in for-hire transportation. Our corporate clients are starting to quietly use Uber (or so I’m told) and tune out our pleas.

In 2009 our industry was on life support. More than 6,000 operators closed their doors and most coachbuilders went out of business while Ford shuttered the Town Car plant. We could have lost this niche industry altogether. Instead, we found a new need for motorcoaches and charter trips. We seized the opportunity to compete for the DMC business and go direct. We figured out how to outpace the tour bus industry by using our exceptional customer service skills on clients who had never experienced us before. We figured out a way to sell our services differently and we found new customers. We started to create strategic alliances with one another to share contacts. And we re-emerged stronger than ever. When the limousine business dried up, we sought out a new need and filled it.

To those of you who have the drive, that leaves a great opportunity today. Uber has been around long enough to rack up a big list of no-no’s to compete against. You need to know all their weaknesses, but moreover all your strengths. Then you need to get out there and sell value. Many reasons remain why people prefer your type of business to others, including good old-fashioned peace-of-mind and pampering. This starts by rounding up your clients input so you are clear in what they want from your service (don’t assume or interpret).

Find the needs and then fill them. Then you will remain relevant, and even better, your sales will soar.

Keywords

building your clientele   industry trends   LCT Publisher   on-demand service   Sara Eastwood-Richardson   staying competitive   taxis   TNCs   Uber   

 

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Is Business Travel Giving Duty Of Care The Finger?

The Global Business Travel Association convened last month in Denver. More than 7,000 corporate travel professionals attended. The hot topic at GBTA this year was the “sharing economy.” The overall consensus from the travel management group is transportation network companies (TNCs) are here and we all need to learn to work together. It clarified how our industry’s pitch is being perceived as whining. At one general session, a CNN moderator called us “dinosaurs,” accusing us of being stuck in our old ways.

Our “pitch” to this group as a mark of distinction — a major differential — between our type of service vs. TNC service has encompassed duty-of-care. This is defined as “the legal obligation of a person or organization to avoid acts or omissions (that can be reasonably foreseen) to be likely to cause harm to others.”

Businesses employing travel managers are on the hook for the safety of their employees and that includes business travel. I am surprised to learn although many travel managers take duty-of-care seriously, there is growing momentum on the position that “ride sharing and on-demand is what our employees want, so that’s what they will get.” Thus, many travel managers have placed duty-of-care on IGNORE, opting to risk their employees’ lives.

From my vantage point, it appears TNCs are providing a cyber-hitchhiking experience, as they will not conduct background checks on drivers or vet them in any way. While TNCs will offer up options and/or recommendations, they will not enforce passenger insurance among their affiliates. It’s anyone’s guess what, if any, coverage an Uber or Lyft car provides the client.

To me, this is derelict and flies in the face of duty of care and an organization’s legal obligation to ensure their people’s safety. I wonder if the C-suite and/or those above the travel managers (who actually have exposure) understand they are LIABLE if they authorize employees to use TNCs and something goes terribly wrong. Do you think the travel managers communicate this properly to senior management? Again, I wonder because this is troubling.

What we can do is keep pushing our message because we are right. Sooner rather than later, we will be justified. The point has been well made that our technology needs to quickly catch up with the times and much is moving in the right direction, finally. We need to ensure we walk the talk. Make sure you are vetting your chauffeurs and taking every action to ensure safety. Place a higher priority on differentiation via customer service training and re-training (read the book called The Nordstrom Way, by Robert Spector – it’s excellent). Be creative, stay positive, and let us hear from you.

Keywords

business travel   duty of care   GBTA   Global Business Travel Association   procurement   

 

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Do Something! Ideas For Leading Change Amid Disruption

Ben Franklin once said, “Americans will get the government they deserve.” His idea here is the American people are in control. We decide. When we don’t like the way the government behaves, or how Congress operates, or we don’t like the choices our President makes, we have no one to blame but ourselves. This is the height of responsibility and it falls squarely on us. Every day we make decisions that set our future course.

Industries like ours are a microcosm of the American political structure, complete with its own set of governance, rules and regulations, and leadership. However, each individual operator and vendor has a say, and the power to embrace change and make changes. Thus, we get the industry we deserve. All decisions are personal. We reap what we sow.

Today, we are experiencing a global business and cultural shift, bringing about opportunities and threats. I praise our industry warriors out on the front lines who are fighting for fair play against the Gigsters, when so many are armchair quarterbacking, tsk-tsk-ing, making excuses, or worse — venting on social media and pointing fingers.

It’s time for clear thinking and strategy. We are responsible for safeguarding our companies, but also the industry overall. We need it to survive. We are not collectively doing enough insightful, methodical, and strategic thinking on our own.

Where To Start?
Taking an idea straight from the Silicon Valley playbook, we need to talk this out. Structured think tanks bent on problem solving on local and national levels have never been more important. Face-to-face meetings require us to “do something,” and that’s what I am asking. We need to tackle issues starting with a new view of the 21st-Century talent pool.

By 2020, it’s projected that 40% of our workforce will be “freelance” in this new Gig World Order. What does that mean to our economy? To us? We need to study this out loud and back up our notions with solid research (that’s LCT’s role), and then push the “what to do’s” out to the industry through the media. Workforce planning should be a top priority for us.

Next is our technology infrastructure. Our industry requires us to not only be tech savvy, but big investors in the tech space for running our businesses. We have been averse to spending in this area for so long. Consequently, we’re waking up to find we’re years behind the eight-ball. We have no one to blame but ourselves.

Again, we will reap what we sow. The time to develop new workforce and automation models that focus on increasing employee and customer engagement is one of today’s most important challenges. Today, it’s neccessary to learn how to use new workforce segments and technologies to improve the quality, meaning, and value of internal (employees) and external (clients) customer bases.

The Bottom Line
On-demand service morphed into the Gig Economy bringing radical change for good and bad. We need to stop the madness and convene with thoughtfulness and purpose to solve our problems and reach a new level of business success.

Keywords

business trends   economic outlook   employee vs independent contractor   industry trends   LCT Publisher   Sara Eastwood-Richardson   state of industry   

 

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Solombrino At Length: What’s Next Big Move For Limo Industry?

[Note to Readers: Below is an extended website version of the Q&A published in the July issue of LCT Magazine. The digital edition is out today]. 

On labor, technology, corporate travel and leadership within the Industry, LCT Publisher Sara Eastwood-Richardson’s exclusive interview with Scott Solombrino, CEO of Dav El/ BostonCoach Chauffeured Transportation Network and longtime National Limousine Association board director, gleans valuable insights to our industry’s next big move.

Sara: The gig economy is the latest term being used to define a class of workers either freelancing (an independent contractor who works on projects for multiple companies) or as independent contractors (typically refers to a person who does freelance work for just one company). What’s our next big move with respect to labor and this growing gig economy?

Scott: Companies wanting to cash in with big profits on the backs of unsuspecting and unprotected workers will only create a bigger problem on our government’s tax base as tens of millions of people aren’t accounted for. None of these gig economy companies are contributing to the country’s infrastructure bills including social
security, FUTA, FICA, Medicare or sales tax. They don’t pay any local taxes. Additionally, these companies are all incorporated offshore. So the bigger problem for the U.S. is if you take all those tax revenues out of the system, how do you run the country? And that’s why this is going reverse. I believe the government
is catching up to this nonsense that the gig economy is any different than the traditional economy.

The government passed laws that required corporations to insure their employees to have healthcare. The gig economy does none of that, so you have more uninsured people who are in the gig economy. It’s time to wake up and say, “Wait a minute. You are still an employee. You have rights. You have entitlements. You’re entitled to get overtime. You’re entitled to be covered by workman’s compensation if you get injured. Otherwise, who’s going to cover you if you get into an accident and can’t work anymore? Who’s going to pay your insurance? You don’t have a pension option. You can’t unionize.”

All of these basic labor rights were the basis of the labor movement for the last 50 years in the U.S. It has all been eroded and so when regulators are looking at this, they’re now saying, “You’re not different. You’re still driving people for money. Or you’re still booking a hotel as if it’s a hotel. You have to comply with the same rules as everybody else.”

That has been the position we have taken at the NLA to try to get the government to focus and say, “It’s not different. You are breaking the rules.” And we think there’s traction out there at the state level and the federal level and we think it’s going to reverse itself. We think ultimately, we’ll prevail.

Sara: Employee retention continues to be an industry concern. However, with all the bad press surrounding TNC labor issues, do you see this as a temporary problem for us?

Scott: Well, here’s what’s going on with Uber in the chauffeured car industry. Three years ago, we all lost people to Uber and Lyft. And three years later, they’ve all come back. Nobody’s leaving traditional companies today to go drive for Uber. And there’s a couple of reasons why. Number one, nobody wants to ruin their
personal car. They put on so much mileage in a year, and the chauffeurs’ car becomes worthless. Most car leases are three or four years. You put on 100,000 miles in one year and you still owe three years’ worth of lease payments. What do you do? So, the first thing is people destroyed their personal car. The second thing is people had no health insurance and of course under Obamacare everybody’s required to have health insurance.

The third thing I’m hearing from drivers that come back is they hated working with the client base they were driving. Nobody wants to drive 20-year-old drunken girls on Friday and Saturday nights at 3:00 in the morning who are throwing up in the back of the car.

And ultimately, people came back saying, “I made no money. My expenses exceeded what I was making in revenue. My car is destroyed. And I owe all kinds of expenses I’m never getting reimbursed for. Why would I want to keep doing that? My average pay was $4 an hour.”

Dav El/BostonCoach has a couple of hundred former Uber drivers with a new appreciation for our company.

Now, here’s the good news for the chauffeured car sector. Uber and Lyft have created a whole new class of people who like driving people. Your entry-level chauffeur now might be a former Uber driver. They actually have experience, they know their way around town and they like to interact with people. So Uber and Lyft have created a new workforce class for us.

Sara: Do you see any reason why owners of chauffeured services allow their inventory and their drivers to be used for Uber?

Scott: No. I think anyone who does business with these companies is absolutely killing their own business by distraction. Stay focused on building up your own client books and perfecting your service levels. Ultimately, the Ubers and Lyfts of the world do not need us. They will “use” our inventory if their workforce
depletes and that’s it.

Remember, there are 95 million Americans not working because they choose not work. The Uber and Lyft driving staff is in that number because the Bureau of Labor Statistics only reports people that are W2 employed who are working real jobs in their statistics. So the 1099 category doesn’t come up in the unemployment rate; it
doesn’t exist. Helping them is not helping anybody but Uber and Lyft. I think it’s a mistake.

Sara: The truth about tech. What’s our next big move as an industry? The why, when, who and hows?

Scott: It’s very simple. There are three companies that produce $600 million in revenue a year and are the primary drivers of our industry commerce. They are DavEl/Boston Coach, Carey International and Empire CLS Worldwide Chauffeur Services. Those companies must decide on what platform is going be “the” platform.

Sara: So you’re suggesting it be one network?

Scott: Oh, I think you’re going to see coalescing with regards to on-demand. Absolutely, positively. In my opinion, the big companies have no choice but to get together. The TNCs are eating away at our client base and what we have to get to ultimately is on-demand. I will concede here that many of our customers don’t ask for on-demand and don’t care about that component. They just want booking ease. However, things are trending and changing every day towards on-demand and to ignore it and pretend it’s impacting our business is simply a fool’s game.

Sara: Well, you have to get the technology first.

Scott: We believe we have the technology. I think in the coming months, there’s going to be an announcement where the industry will have two choices. If you want to survive, you’re going get on the platform the big three have adopted. And if you don’t want to survive, if you’re on your own, good luck. You might be able to run a nice, five-car business for a few years and live happily ever after, but you’re
never going to have any opportunity to participate, I think, in the global corporate market.

[PAGEBREAK]
Sara: Are you in a position to say the company that you, Gary and David are interviewing or disclose the technology?

Scott: Who said it’s a company? Maybe it’s something different. Maybe it’s not a company. Maybe it’s our own technology? Maybe that’s a better approach. Maybe it’s a combination of a company or a couple of companies’ technologies plus our own platform. We don’t know that answer yet. That is what we are working on now. We all know time is of the essence. One thing we’re not going to let happen is having third parties get between us and our customer base. We don’t want somebody dictating to us saying, “You have to use our tools to get to your customer.”

We have to have our own organization similar to what Orbitz was to the airline business where the airlines all got together to aggregate their own capacity. We believe we can do that in chauffeured car and protect operators from third parties. Now, maybe some of the third parties that are out there will be driving it
behind the scenes because they have technologies that will be useful, but there’s no way I see people getting between us and the customer. That’s a bad strategy for the industry.

Sara: Talking about our industry’s next big move from a tech standpoint, Uber’s next big move claims they’re going into reservation based, 30 days out-based platforms and they feel pretty confident they can do that. Obviously, that’s not a reaction to anything but the Lyft announcement that they’re testing out in San Francisco through their employees, a reservation based system. So not to be outdone by Lyft and Uber says, “We already have it, we’re doing it.” So what does that tell you about Uber and what Uber’s next move is and why are these people…why are Lyft and Uber pursuing the business travel market in the first place? It’s a $2 billion piece of the pie.

Scott: Receipts and expense management are just as important to corporations as the delivery of service and if you can take taxi and automate that, and it becomes an expense item on somebody’s expense report, people are happy. So TNCs forced the “taxi” industry to improve the interaction with corporations to provide better receipts – and I don’t mean receipts on a little piece of paper the cab driver writes on it because that’s nonsense. I mean a credit card receipt. Corporate America has wanted that for years. Now they have that option if they’re using TNC. So I think the piece of pie is a lot bigger than people are estimating.

The response from the chauffeured car industry is three years late. We should already have developed a platform three years ago and gone to corporations and said, “We will give you GPS following on your phone, we’ll give you immediate receipts that goes into Concur, and goes into all the other expense formats, IBM,
etc., and we will integrate with you so we can give you a more transparent receipt financial experience for your traveler.” But we didn’t do that. The industry was too busy fighting amongst themselves and basically being in denial thinking Uber was never going to enter the corporate market. I’m not surprised they’re
taking pre-reservations. They want to be all things to all people, because the difference between profitability and not profitability at Uber is a very small number, so they have to figure out how they can make every vertical profitable in order for the whole company to cover their expansion and their losses that they’re doing in China and India and all the other stuff that’s happening. So why would they not go into pre-reservations? Of course, they would. By the way, is it really that hard to do? I’m kind of shocked they didn’t do it three years earlier!

Sara: I guess if you can book out your cottage on your estate three months out, why couldn’t you book a car?

Scott: I mean, it’s so stupid to think otherwise! To their credit, they now have made great strides in the corporate market and our best argument is duty of care because chauffeured car has a better duty of care and so does taxi. The problem is corporations care about one thing. They care about money and convenience,
and duty of care is on the bottom of the list. It’s supposed to be at the top of the list, but the last three years of my discussions and meetings with people in the corporate markets have proven to me nobody really cares about duty of care, because they look the other way and allow their employees to participate in these
types of transportation options that have no duty of care. No background checks, no drug testing, no insurance requirements, no inspection of vehicles. I mean, just think of the insanity so that corporate people allow their employees on their liability policy getting in Uber or Lyft vehicles on any given day.

Sara: Agreed. Cyber hitchhiking is all the TNC platform is. It’s literally a guy pulls up with his own car, you jump in, it’s a random guy, reporting to no one and if you get to your destination great. If you don’t, you know, it’s just one of those things. If you’re a woman or these moms putting their kids in the car, it’s just bizarre, because when you stop and fundamentally understand the business model, it is nothing more than hitchhiking in a stranger’s car. Nothing. 

Scott: Well, the NLA invented the term digital hitchhiking. I mean, we put it in a PSA long ago. We’ve said this from day one, but corporate America hasn’t really understood what that meant. Now, I think we’ve made some progress in some companies where they’re banning Uber and Lyft and saying, “There’s no way, it’s not a reimbursable expense, you can’t use it, it’s not duty-of-care compliant.” Now, there’s other corporations that are saying, “We want to make our life easy. Use whatever you want and we’ll reimburse you for it.” The problem in the chauffeured car industry is until you give people an alternative that meets the same criteria of why users want to use those products, you will not succeed. And that’s why we’re out of time and the time for action is right now. We have to coalesce together and we have to come up with a solution and I believe we’re on a pathway to do that.

Sara: Managed travel. What’s the next big move?

Scott: There are all different theories on managed travel. One thing I will tell you is managed travel thrives in down economies and the economy is slowing. You can look out there and see it. You can feel it. There have only been 32 additional public offerings this year. It’s the slowest year on record and Wall Street is the biggest driver of global corporate travel of any specific vertical. The last jobs report only created 38,000 jobs. It was supposed to create 180,000.

When you’re in any type of environment where the economy slows down, people start to refocus on managed travel because they want to cut costs. The only way you can cut costs is you have to manage the travel tighter. Whether it’s Wall Street or any other industry sector, travel is always the thing they look at first.

Sara: The country broke a record this year in the number of non-startup businesses. People have been de-incentivized by this President’s policies.

Scott: Agreed. No one’s going to start a company in the state of California unless you’re insane because California has the most outrageous anti-business laws of any state in the U.S. The message of this administration has been, “Don’t go into business because if you do, we’re going to overregulate you and make your life so difficult you have no chance of success. “

And that’s why there’s a great hope out there that something’s going to change from a regulatory perspective. You cannot regulate people into the ground. And California’s a perfect example of that – people are leaving California in droves. It’s overly regulated, it’s out of control and it’s unbelievably costly as compared to
operating in Florida or New York or Washington or pick another city. Overregulation is killing business. And that’s the fundamental difference between Democrats and Republicans.

The problem for the chauffeured car sector is that to fight our TNC battles, we have to go to our allies that are Democrats because they’re the only people that really understand the labor issue. They care about workers and workers’ rights and worker’s compensation. The Republican side would love to deregulate everybody and have no rules. So we find ourselves in a very, very awkward place. We have to go to places where we think we can get the most support to solve the labor issue so these companies are operating on an even playing field. Remember, the TNC has a 40% advantage on pricing over us because they pay no labor expenses. Now, on the economic side, the last thing you’d want is more regulation. Chauffeured car is highly regulated. We’re overregulated.

The industry has to make a decision: What’s more important? And I would argue the enforcement of the labor laws and getting labor to get involved in this fight is more important than deregulation of other parts of our industry.

Sara: Leadership. Okay, what’s the do or die for us from a leadership level?

Scott: If your business is down 20%, 30%, 40% due to forces beyond your control, it’s time to exit and get involved with a larger organization through critical mass through better technology platforms that can potentially compete to survive this.

In my opinion, the industry needs to consolidate. We need to do so on tech platforms and on how many operators are out there. Since there aren’t enough incentives for new companies to come into the market, I predict the industry will shrink pretty quickly. However, that will create two problems: 1) We will have
less people controlling more revenue which is always dangerous; 2) We will have fewer companies that can participate in the overall fight for survival to get the TNCs regulated at our level. So it’s a double-edged sword.

Now, when the industry gets together on the technology piece, we will all see the beginnings of what I would call a renaissance in chauffeured car. But we’re in the Dark Ages right now. There’s nothing good happening in chauffeured car right now as a sector. We have to turn this around and get to the light. And the way we’re gonna do that is through collaboration, cooperation, coordination. There has to be unity. People have to get on the same page.

We have two choices. We either gotta get on the lifeboat off the Titanic or we can continue having dinner in the dining room as the boat’s going down. I think the industry will run to the lifeboat. The problem is there’s not gonna be enough room for everybody. The industry has to consolidate.

Sara: Well, my final question, because this was a leadership question and so from an ownership standpoint, what’s the next big move? What if they aren’t losing money and love what they do and have no interest in selling out or closing shop?

Scott: We must function as a collaborative group. We can have small companies do small deals together. People are going have to pool resources at some point here so there’s nothing wrong with smaller companies aligning. There’s nothing wrong with mid-sized companies merging. The big companies aren’t going buy
everybody. What you might see is the big companies start to consolidate who they use in those smaller markets so they can pick a winner in the marketplace. So think of this. What if three or four of the big companies all bought the same services from the same four or five companies in a secondary market to ensure that they financially survive? That might be what you see coming down next.

I think the industry has to get creative. And that’s what’s next in my opinion for the chauffeured car industry. Becoming more clever than the TNCs. We have to think way out of the box and out of our comfort zones and put aside all of our tribal disputes. We have to work together to collaborate.

If the industry doesn’t wake up and take teamwork seriously, we’re going to pay a price. You can no longer be a stand-alone. Those days are over. We have to work together all the way down to the small car operator level and find ways everybody can make money and be able to be competitive in this very, very difficult
environment and I’ll leave you with this one last thought.

That said, it’s my opinion that if we’re not in the “on-demand” business as a sector in the next six months, all this will be for nothing because the consumer has spoken. On demand is here to stay and we have to find ways for us to be able to compete and deliver a high level of service with our duty of care attached to it.
That is what will separate us from these TNC companies. That’s the one thing chauffeured car has always done better than any other sector including taxi. Chauffeured car has always cared.

Keywords

apps   Boston operators   BostonCoach   industry leaders   industry regulations   industry trends   labor laws   NLA board of directors   Scott Solombrino   state of industry   TNCs   Uber   

 

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