It is said that we live in turbulent times – and the taxi, transfer and chauffeuring sector demonstrates this alarmingly well.
On-demand vehicles, booked instantly via mobile phones, is now the norm for the general public. And so it is no surprise that business travellers expect the same experience when on company time.
As a result, everyone in the industry is having to step up and deliver. “The current rate of change has never been so fast. This space continues to evolve with technology as its driving force,” explains Craig Chambers, Group CEO of TBR Global Chauffeuring.
Ride-hailing services abound, led by Uber and Lyft and followed by challengers such as Kapten, Bolt, Gett, FreeNow, Ola and Kabbee, to name just a few. Bloated by investor money, they’re maturing rapidly and becoming an integral part of the mix.
Today’s ground transport scene is a far cry from booking Addison Lee over the phone a decade ago. Digitally enlightened natives are setting the bar high when it comes to booking experiences.
Ease of use, flexibility, seamlessness and cost savings are the new buzzwords. They’re lapping up a new cohort of travellers – Generation Y and beyond – who are invading the corporate scene and happy to book everything via smartphone.
“There has certainly been a shift in focus from the buyer, arranger and traveller to being more focused on the interface with the provider,” says Greg Mendoza, Regional Vice President for International Operations at Carey International.
A change in booking patterns also has travel managers, policy makers and travel management companies sitting up in their swivel chairs. That’s because this sector has been overlooked, until now.
Executive travellers have been largely left to their own devices, quite literally. Yet with changing buying patterns comes a notable change in attitudes.
“The industry increasingly views transfer and chauffeur services as the next big opportunity after flights and hotels, as part of taking a more holistic view of managed travel,” explains Angelina Bunting, Commercial Director at Reed Mackay.
Remarkably, over 50% of companies still have no restrictions in place with regards to taxis, or have nothing specified within their travel policy, according to a recent survey.
“Taxis are one of the least regulated modes of transport,” states Leanne Riley, Business Travel Specialist at CMAC Group, whose company conducted the poll.
“The main challenge is finding the time to prioritise ground transportation and also finding a way of incorporating taxi travel into an existing programme.”
Taxis are still considered one of those petty expenses you can sort out easily with accounts at a later date. Yet road travel can contribute to 10% or more of any corporate travel budget. It’s therefore increasingly on the radar for managed travel programmes. This is at a time when it’s becoming increasingly difficult to contain, since there’s a proliferation of choice.
“Dealing with ground transportation is a growing challenge with more options available all the time,” states Stephen Brook, Manager of EMEA Distribution Strategy at Amex GBT.
“These range from taxis and chauffeur cars, ride-hail, car share, and car clubs to newer options like e-scooters. It doesn’t help that travellers have a lot of autonomy when it comes to arranging things in this sector,” says Brook.
But let’s face it, the market has always been fragmented. Yet many corporations are beginning to incorporate language into their travel policy about when employees can and should take different types of ground transport – for example, a preferred chauffeured service for airport transfers or a ride-hailing app for short inner-city trips.
However, there’s still caution about using certain services, such as ridesharing, where there are safety, security and duty of care concerns, even though it makes a lot of sense to share ground transport, especially if a number of executives are heading to one destination.
“Corporations are starting to look at all historical travel patterns captured from expense data or corporate charge card information in order to demonstrate best practices for this category,” says Melanie Benedetto, Senior Consultant for Ground Transportation at CWT Solutions Group.
With so much competition, digital innovation and efficiency, ground transportation has become commoditised. Price and ease of use are the major determining factors; hidden fees have also been summarily scrapped.
Traditional taxi and chauffeur services have had to up their game, and some have consolidated in order to offer more globalised coverage, as well as different levels of service. Others have gone for a more human approach appreciated by c-suite travellers.
It helps that ride-hailing apps no longer have a monopoly on good technology. “They may have led the way several years ago, but now ground transportation has a multitude of technology options,” says Carey International’s Mendoza.
“This starts with the booking process, moves on to providing arrangers and travellers with real-time information as services are taking place, and is followed by hyper-efficient billing and back office functionality. This can now be integrated with online booking tools of all shapes and sizes,” he explains.
Mobility as a service
One development in the market is for ground transportation players to offer a greater range of mobility services integrated under one roof, a concept called Mobility as a Service (MaaS).
This could help solve the fragmented market by bringing individual operators together with one comprehensive solution, available on demand, whether it be taxis, chauffeur services, ride-hailing or even bikes, perhaps even linked in with public transport options. For instance, platforms have been developed to enable local taxi firms to work with travel aggregators and provide mobility solutions.
“These connections will eventually facilitate change across the industry and help us to create seamless Mobility as a Service networks that everyone is envisioning,” says Paul Wait, Commercial Director at iGo, a platform that already processes one million trips a day.
Since we’ve potentially hit ‘peak car’ in the UK and vehicle sales are now falling, it’s starting to make financial and environmental sense to have fewer vehicles on the road and use them more efficiently, as well as on a shared basis.
“This should be viewed in the same way we consume other services like planes or hotels and that is on an as-you-need basis,” says John McCallion, CEO of GroundScope. “You don’t keep an aircraft in the garage so why keep a car that spends most of its time in a car park not being used? Why not just book it when you need it?”
The delivery of a comprehensive and fully inclusive ground transport solution that can be incorporated into policy and managed in terms of cost, expensing and duty of care has not been available up until recently, but this is changing.
“The future will be to offer the business traveller added value by closing the gaps between the different components of his or her travel chain,” says Dr Sascha Meskendahl, Chief Revenue Officer of Blacklane. “Providers will aspire to become a one-stop-shop for frequent travellers aimed at handling just about anything the traveller needs on their trip.”
A question of sustainability
Sustainability is certainly becoming more important. The transport sector as a whole accounts for a whopping one-third of all of the UK’s emissions. The sector, particularly ground transport, is viewed as a vital nut to crack if the country is to tackle the climate crisis and achieve the goals it has set for cutting emissions.
The use of technology can help; it is able to increase the efficient deployment of vehicles with GPS tracking, apps and smart technology. There is also a move towards electric vehicles to help create emission-free fleets, which could make a huge contribution to carbon neutrality.
“The ability to choose an electric vehicle when booking a ride through a firm’s app has become an important differentiator for some operators,” states iGo’s Wait.
Some companies, such as Blacklane, are offsetting not only the emissions created by their fleet, but also their entire operations by partnering with an offsetting provider. Certainly, everyone is now much more aware of the damage emissions are causing, especially within cities.
“People now want to reduce their carbon emissions as much as possible,” says McCallion. “Yet the high cost of electric cars and lack of high-speed charging points is holding back significant adoption of electric vehicles.
He continues: “But with car manufacturers now facing significant fines for selling high-carbon emission vehicles, the next few years will see electric car purchase costs significantly drop. There is also more high-speed charging point infrastructure being installed.”
So, what can we expect in the future? Using artificial intelligence, machine learning and big data will further decipher how business travellers use ground transportation in a bid to optimise the customer experience. Who controls the data could control the future. This is what Uber hopes for.
Development and investment also continues apace for driverless car technology. “There’s a big appetite for innovation in this sector and successful providers will be keeping informed about traveller needs and aspirations, and using this insight to create new ground products,” states Amex GBT’s Brook. It’s an exciting space to watch.