We keep hearing how transportation network companies (TNCs) will destroy the limousine industry, despite stats to the contrary. Sometimes an anecdote advances a fact better than hard numbers.
Selling Up
Michigan operator and LCT advisory board member Nick Kokas, whom I interviewed for a feature on driverless vehicles, talked about how his company’s reservations have increased in the three years since on-demand emerged. “On-demand became a marketing angle to customers who didn’t know we existed,” he says. “They want a consistent level of service and book the old fashioned way even if more of a hassle.”
TNCs have always been more about mimicking cabs than limos. The clientele for each stayed mostly separate, except for the traveling businesspeople who hailed cabs for convenience when limo sedans were unavailable. It’s beyond dispute TNCs take a greater slice out of the cab business than the chauffeured car sector. The cheaper Uber X tier remains the sweet spot for the TNC, whereas Uber Black, which can charge rates three times that of Uber X, offers black luxury vehicles, with far more than a handful supplied by limousine companies.
Which brings up another point from Kokas: The company he works for partners with Uber and takes some of its on-demand riders to make the most of unused inventory. In the process, some of them become enlightened about true chauffeured service and decide they want it, too.
What many observers and naysayers miss about TNCs is they will never be an elite phenomenon, and that’s a good thing. TNCs are in the novelty phase. A recent survey shows 78% of the public has never tried them, so they still retain a unique appeal. Sooner than later, they will seem more commonplace.
Who’s Better Than You?
Here’s where limousine companies come in. They can tap some basic, time-tested human psychology. Human nature strives to set oneself apart, or above the rest. No matter the motive, no one wants to just be common or like everyone else. Restless consumers will always desire something different, better, above and beyond.
Human nature craves the recognition that comes with elite status. The most direct way to feel special or elite is via personalized services and material goods, such as business class, a luxury chauffeured vehicle, or an upgrade to a larger hotel room or suite.
We may be transfixed by “anti-elitist” populism this election year, but no one really cares to be anti-elitist if it means being bland or deprived. Individuals still like to be unique in some way. Even anti-elitism becomes a form of elitism, like people who sport organic labels or fume about climate change. The entire fashion industry thrives on finding “your look” to distinguish you from the masses. Why else does it push garments that are “in season” just once? As soon as enough consumers buy baggy jeans, tighter fit jeans come back in vogue.
Club Next
During a layover last March at Chicago O’Hare International Airport, I couldn’t get into one of the United club lounges because it was full of . . .elite travelers. A lounge on another concourse I got into eventually filled up, with most seats occupied. I would wager most club users that day were not traveling business class, which often spurs a lengthy waiting list at the gate.
The limousine industry is the business class lounge of ground transportation. As we’ve heard at LCT shows, successful service businesses know how to make clients want more, spend more, and experience more. Chauffeured vehicle services are all about finding such angles.
Operators who know how to attract elite travelers and aspiring ones can succeed in ways TNCs never will. Uber has to run on mass-efficiency. It doesn’t have the time, will or knowledge to cater to individuals. Thanks to technology, it’s a form of atomized mass transit for urbanites. But a segment of the TNC clientele will always look for something better and more distinct — a more elite experience.
Digital Declasse
I’ve noticed a trend in advertising among resorts catering to the ultra-wealthy. Images and messages speak to “unplugging,” enjoying the elite status of not having to carry around a digital device. You’re so well off and important you can choose not to be reached. You have the luxury of letting the world go on without you.
One ad showed someone actually holding a newspaper. Imagine that: In a society of bowed heads entranced with small screens acting ever busy and useful, to choose to look up, ahead and around hands free, or sit back reading a newspaper — how elite does it get? As much as anyone can make it.
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Editor’s Edge Blog LCT editor Martin Romjue staying competitive taxis TNCs VIP service
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