Blacklane CEO Jens Wohltorf on Chauffeured's Tech & Distribution Challenges

• Asia/Pacific growth
• New economy class offering
• Long-haul trips
• GDS integration on the horizon

When launching the professional driver service Blacklane in 2012, CEO and co-founder Jens Wohltorf sought to address chauffeured transportation fragmentation and booking. Not counting markets like China, 70 percent of the industry is made up of small suppliers with only a handful of cars in their fleet. "These are mom-and-pop shops with one or two cars and the entrepreneur behind the wheel," Wohltorf said. "They have no chance to innovate or bring scale to the table for marketing, sales or integration with online travel agencies or airlines."

Thanks in part to those barriers to innovation, the industry still relies heavily on nonautomated processes for booking, he said, noting that about 40 percent of reservations by unmanaged business travelers are made over the phone. That's "so yesterday," he said. With Blacklane, Wohltorf has sought to create a global marketplace for these suppliers with online booking capabilities and connections to global distribution systems, travel management companies and travel buyers. Blacklane also ties guaranteed pricing to its bookings, picking up the difference should it not be able to find a driver at or below that rate, and is deepening its price competitiveness with the expansion of an economy tier. Wohltorf spoke with BTN transportation editor Michael B. Baker.

BTN: How has Blacklane grown over the past four years?

Wohltorf: We launched in the middle of '12 in Berlin and quickly covered Germany, then extended over Europe. In '13, we extended into the U.S., which is by far now our biggest market. Now, we are present in 50 countries, 200 cities. We're about to launch 50 to 70 new markets in [the Asia/Pacific region] in the summer.

BTN: How do you determine what content to aggregate?

Wohltorf: Where we are in the marketplace, we connect different customer groups: individuals, business travelers, enterprise customers and customers like airlines and OTAs. On the other side, we aggregate that 70 percent of the market, the super-small ones. By now, we have thousands of those in our network. New York is definitely in the top five of our global cities, and we have hundreds of cars on the street that we onboard. We never contract with individuals. It must be a legal entity that's holding licenses, insurance and all the necessary paperwork to comply with regulations. The cars and also the drivers have to comply with our standards, which are quite rigid. [Then], we train them on our systems. They get our technology and the driver apps in the car, and we put them live. From a partner's perspective, we are not forcing anything in their schedule. We are basically offering a bucket of open offers where they can cherry-pick their perfect days together. We fill the capacity tomorrow already today, and they have nice planning reliability. They know what they get and can decide on what price.

BTN: How does pricing work?

Wohltorf: As a customer—and this is highly valued by travel managers and enterprise customers—you always pay the same price, no matter whether you ride on a Monday morning or Wednesday afternoon. The industry is limited in terms of resources and capacities, so you have peak and low times. Other providers might utilize surge pricing, but our customers are not fans of this. We need to take this into account—peak and low times—so if you book an economy class ride to JFK for $60, we are then asking into our network who has capacity and is able to fulfill this ride for $30. In many cases, they have to pick up one of their customers at the airport, and they have to go there empty, so why not pick up a Blacklane customer? If they are not reacting, we raise the price points until someone thinks it's valuable enough and it fits into their schedule and takes it. This mechanism is not only nice because we can utilize our margin in order to dispatch to the right price points, but also it allows us a unique thing, which is a booking guarantee. Whenever you place a booking, it's being fulfilled, and you promise this. You get an instant confirmation when you book something with us, and we can always secure the capacity somehow in the market.

BTN: What's your distribution strategy?

Wohltorf: One of the key initiatives in this distribution-partner space is that we have integrated Blacklane into the Amadeus infrastructure, which sets the base for everything around flights. We are PNR-connected to Amadeus customers who could be a travel management company, airline or enterprise customers. When they place a flight booking, at the end of the process, origin and destination can be added with just a check box. That's seamless. You are picked up from home, delivered to the airport and picked up again. All systems and drivers are connected to flight-tracking tools, so the traveler has peace of mind in relying on [the fact that] we'll be there without any additional cost. [Co-founder and chief technology officer Frank Steuer added that Blacklane also is in discussion with Sabre, Travelport and "ground-transportation-specific booking tools."]

BTN: So you connect directly with corporate travel buyers, as well?

Wohltorf: Amadeus itself isn't enough. Amex GBT or Carlson Wagonlit wouldn't make sure we are automatically covering everything, so you have to have direct connections with the enterprises, the business themselves—whether they book in our corporate portal functionality, which is an extension over what that [noncorporate] customer can see in the app or on the website, or they activate it in the booking tool so that it's visible and is the preferred service provider. Talking about policies and people allowed to use it—that's one of our biggest challenges: education. People think of black car service and think of Carey price points and C-level executive staff transportation rather than the vast majority of travelers, which is the middle management that has limited-taxi-rate policies that they have to comply with. Now, thanks to concepts like Blacklane, we are beating taxi rates, especially with the economy class offering.

BTN: Blacklane's economy class is new. Where are you looking to offer it?

Wohltorf: Globally. Initially, we tested economy class in Asia and Latin America to make sure the procedures are working and everything is in place. Recently, we launched Paris, New York and London. Munich is coming next, and we are planning to cover the globe with our 200-plus cities.

BTN: Are you in Concur's TripLink?

Wohltorf: Not yet, but we're talking to them. We've integrated into TripCase, so there you can book us everywhere, and there are a bunch of other management applications.

BTN: What sort of corporate business are you targeting?

Wohltorf: Typically, our strength is everything that the customers value: reliability, convenience, trust, duty of care and price certainty. They certainly don't value it when you travel around the block in a cab or an Uber. The longer you sit in the car, the higher you value these attributes, which is what we're looking to more and more beyond airport transfers. Those still are our sweet spot, but it's to build upon it and look deeper from city-to-city transportation, actually competing with short-haul flights or long-haul bus service. You have a door-to-door experience and don't need to go to an airport or through security checkpoints. You have 100 percent productive time. You don't have to drive, which is the problem with rental cars. You can focus on the meeting that you are going to have. You save a lot of money and also time, and there's not a lot around that can fill such a gap.

BTN: Have you seen a growth in those sorts of bookings?

Wohltorf: We are just at the edge of launching it. We have launched a pilot in Germany between five different cities. Between Hamburg and Berlin, you have about 200 miles of travel, and without marketing, it's just coming. People realize there's a market to be made, especially if you're traveling with colleagues. You can share the costs among the passengers traveling, and it's a huge savings, even over Amtrak. Even from an urban area into the suburban area, where you're 50 to 100 miles outside the city border where a lot of industry sits, what could you choose? There's driving yourself, and getting back into the city, you cannot hail anything. This is a nice market to be filled.