With its Clear airport security checkpoint lanes operational for roughly 17,000 members in Orlando, Verified Identity Pass is the only company operating a Registered Traveler program in the United States. Business Travel News editors recently met with founder and CEO Steven Brill at VIP's offices in New York to discuss the state of Registered Traveler, corporate contracting and working with travel suppliers on joint programs.BTN: You just announced Toronto's airport signed an agreement. Will that be interoperable with U.S. programs?
Steven Brill: To keep things simple at the beginning, this is a program for Canadians leaving the Toronto airport, just the way the Orlando program is for Americans leaving the Orlando airport—wherever they may be going. The logic would be that once the programs are running, each government will recognize what the other is doing. Therefore we could easily make it interoperable with an American program and vice versa.
BTN: What's the government approval process like there?
Brill: We know that the Canadian Air Transport Security Authority encouraged us to talk to airports, and encouraged airports to talk to us. We fell pretty good about it.
BTN: TSA plans to roll out the program nationwide on June 20. Is there a similar timeframe in Canada?
Brill: There isn't because the discussion is just starting.
BTN: Is there any sort of set pricing model for corporate travel buyers or other bulk purchasers?
Brill: It's not set because we haven't figured it out yet. There are some entities—Hyatt is the one that is well-known publicly—that have bought tens of thousands
(BTN, March 6). Their model could be 10 or 12 percent different than everyone else's. It's not a lot. The consensus is we're leaving a significant amount of money on the table. We actually lose money on everybody in the first year. It costs us more to have the staff person standing over you when you have your fingerprints and iris scan as well as all the equipment installation, and everything else. To me, it's a model that comes naturally because it's just like a magazine subscription model. Any paid circulation publication—whether it's Time or American Lawyer—loses money in the first year, but hopes that its product is so good and consumers like it so much that they renew. When you renew your Registered Traveler membership, I don't have to take your fingerprints again or make a new card for you or market to you.
BTN: Have any companies—for instance, your partner General Electric—asked for a program for their travelers?
Brill: GE will. Once it's really clear that it's going to more than Orlando and what the schedule is. We've had some—not yet GE, but Universal has done it because they have people based in Orlando. It's all starting right now as we speak. There are a lot of large potential corporate clients in places like San Jose, where we'll be launching. Also, we are nearing some deals with pretty much all of the big travel management companies. There's a very big employer in Boston who came to us and I didn't want to sell it to them just yet. Although Boston's airport said they'll put out an RFP, it is likely not to move as fast as the Boston Globe says it's going to move. I don't want to take money from these people and have nothing to show for it.
BTN: Will most of your travel industry partnerships essentially be bulk purchasers, like Hyatt?
Brill: That's one possibility, but look at Hertz. Instead of them selling us or giving us the names of all their number-one members in Orlando, they just put hang tags on rear-view mirrors that allow people to sign up for 13 months for the price of one year. There's one basic principle: We never give any of our marketing partners any of our customers' names; they never give us their customers' names. Our data doesn't mix with their data. We just got a proposal from one of the major credit card companies. Part of it was this boilerplate, asking how we're going to protect their data. The answer is we're not going to protect their data at all because we'll never have it, and they'll never have our data. That's the basic principle. Then what would we do? If you're a hotel chain, in return for your buying a certain amount for your very best customers and you obligate yourself to market it at another type of discount for the next tier, then you promise to put enrollment kiosks in lobbies of your key hotels, you may promise to put our materials in guest rooms. There's a whole variety of things we can do.
BTN: So the starting gate opens in June—
Brill: We will be doing deals with airports in March and April for sure, because you have to start signing people up in May. I think it's entirely possible—except for airports that have already chosen us—that those programs might not start on June 20. Do the math: We just got a request from Cincinnati for a proposal and it has to be back by the end of March. Then it will take two or three weeks to decide who to give the deal to, then a week to negotiate the contract. By this time we're talking about May 1 and we say we can start enrollment within 30 days of signing the contract. In Cincinnati, we could start June 20. However, say Denver puts out an RFP in May, then that will take until August, which would be fast. However, through the combination of Lockheed and GE and various subcontractors, we could do 30 by the end of the year.
BTN: What's GE's involvement beyond financial?
Brill: They're supplying this enhanced equipment at the lanes. The other really important thing they're doing, that people won't see for a while, is they have a legendary Six Sigma approach where they're unleashing some of these people to look at the lanes and make the flow better. We've all seen this when we've come to an airport and the table is too small and you're waiting for people to put stuff on the table or it takes long to get the bins back. We're going to fix all that. There could even be a different type of bin you could buy that would cost TSA more money and they couldn't afford to do it at all their lanes, but we could do it at ours. At Orlando, we have a concierge who helps you get your stuff—your cell phones into the bin, and so on—and it makes a difference.
BTN: Is there a fear that TSA on April 20 will introduce standards that will force you to overhaul your program?
Brill: They've articulated the basic standards and they took a lot of that from the experiences at the pilot projects and in Orlando. We're not worried about that. We will probably have to reissue our cards because some of the geography of what's on the card and specific aspects of the card may be different—as long as we don't have to reenroll people. If they suddenly said they want hand geometry as well as iris scans, then we'd have to reenroll. But they've said they're not going to do that.
BTN: Are you looking at more functionality in the card itself? Some of your potential competitors are looking at a credit card component.
Brill: Not us. Every focus group we did when we asked people if they wanted this to be part of a credit card, they almost got up and walked out. Rationally and irrationally, it makes people feel weird—taking fingerprints, eyeballs, etc. The focus groups were sophisticated people. We self-selected business travelers—it's not like we went on the street and picked people at random. Their view was, "I don't want to link my financial transactions and everything else I do in my life to this." We think the way to do business with credit card companies—and we intend to do this—is to co-market with them, not to be competitors.
BTN: Some travel managers have data-privacy concerns. What data are actually housed on the card?
Brill: If you took my card and did what Lockheed Martin swears you could never do—they even get angry when I use this as a hypothetical because they say it's impossible—but say you hack the code successfully, what you would get is a template of what my right thumb and left iris look like. That doesn't do you any good unless you can actually steal my right thumb and left iris, and it's not even labeled as my right thumb or left iris. That's all you would get. Plus my name: That's all that's embedded on the card. There are a lot more cards out there that have a lot more data than that.
BTN: If someone loses a card, there's no cancellation process?
Brill: We just issue a new card. You would have to lose your data and your thumb. That's why this biometric stuff is really significant.
BTN: The enrollment kiosks are big, but could you bring those to a corporate headquarters to enroll travelers?
Brill: We're also developing really portable ones. The ones we have now are portable like a refrigerator's portable. I originally said, "Do what the traveling salesman do," just have all that stuff, but they said, "no way." You can't quite attach it to a laptop. There's a lot of things going on with the kiosks—there's the iris scan, the fingerprints, we also take your picture, then there's the equipment that verifies your documents, and a printer that prints out a receipt. We think we can make one that is sort of wieldable that would look something like a three-drawer filing cabinet—that size. The important thing is when you build it, you have to build it so it's protected, so if you put it in a truck it doesn't get scrambled. We will take that to the HR departments of employers all over the place. We did that with a law firm in New York that was going to Orlando. That's important that we get that.
BTN: TSA said—and this is their language—that "program benefits will change from time to time to make it more difficult for terrorists to anticipate our security activities."
Brill: This is what a lot of people don't understand. The mantra in business travel is that everyone wants to have a consistent experience, but you can't have a consistent experience if you're worried about security. You just can't. They're right about that and travelers have to get over that. If I give you a totally predictable experience at any airport in the country, then you will spend your life—if you're a bad guy—trying to get around the predictable experience. If I make it unpredictable, that creates a tremendous deterrence. It is entirely possible that once you say that you can't make it predictable for the bad guys that even registered travelers will be subject occasionally to a random search—and they will, but it will be pretty random. On any given day, they could say you don't have to take your jackets off but we still want to check your shoes, even if you're standing on a scanner. What I suggested is the right language for this. What will be consistent with us is that you have an expedited process through security—a predictable expedited process. But the details may be inconsistent from day to day.
BTN: Air Transport Association president and CEO Jim May is against this, saying that security has improved enough to make Registered Traveler moot.
Brill: Jim May must have a very big NetJets share, because he's not flying the same airplanes you and I fly. He should start patronizing his members. You can't find anyone on the planet, except Jim May, who thinks the airport security lines—the wait—have improved. If he's right, tell me why all these people have joined in Orlando.