Scott Solombrino talks:
- His journey from driver to franchisee to president
- How the labor issue could disrupt ridehailing providers' growth
- A technology lifeline for taxis
Dav El/BostonCoach president and CEO Scott Solombrino will not renew his contract with the chauffeured transportation supplier, which he has led for three decades. In an interview with BTN transportation editor Michael B. Baker, Solombrino said the departure was "something I've planned for a while because I wanted to change careers before my career was going to come to an end. I've been in chauffeured car for 43 years, and I've done everything there is to do. I still have one more good deal in me, and I want to do another deal." That deal turned out to be taking over the executive director position at the Global Business Travel Association, for which Solombrino has long led the Allied Leadership Council for non-travel manager members. As he leaves his longtime role, Solombrino discussed his history from driver to leader and his predictions for the ridehailing industry.
BTN: How did you get started in the chauffeured car industry?
Solombrino: I got into this all by accident. I was the president of my high school class and got accepted to a bunch of universities, and my mother and father couldn't afford to send me to them. I decided to go to Suffolk University, which was a law school/commuter school in Boston, which had no requirement that you had to live there, with the thought that I would be able to have a job. With $600, I bought an old, used limo. I hired a former truck driver, and he'd drive during the day and I'd drive at night. By the time I was graduating, I had a 30-car operation. I went out and learned how to get credit. I had a bank line. I got accepted to law school and deferred law school for a year. I heard about a guy in New York named David Klein, who was running the largest limousine company in the world at the time, Dav El. I flew down and got a meeting with him. He said to me, "You're an aggressive kid. I've seen some of the stuff you've done. Why don't you become a franchisee in Boston?" After that happened, I started to get exposed to other parts of the limo business.
BTN: So how did you end up in charge instead of in law school?
Solombrino: David Klein, when I was 22 years old, put me on the board of directors of Dav El. I was on the board for maybe two years. They had a huge network, and we were sending hundreds of thousands of dollars into his system because I had a place where I could send my Boston customers who wanted to go to New York, LA or Washington. One day, I got a call from David Klein who was in Miami, and I hadn't heard from him in a bit. I went to his penthouse, and he [told me he had a serious illness]. He said American Express was trying to buy the company to make it a division of American Express Platinum Card. He didn't want to sell to them because he didn't need the money and they were going to change the brand name, which was his legacy. He said, "You could run this company, and I want you to do a deal." I put together a deal and bought the company. I thought he was going to live five more years and I'd be able to transition with him. Unfortunately, he died very quickly, and we didn't have a lot of transition time. So, I went to New York and did all the things he recommended. By the late '80s, the company was dominant in chauffeured car. It was basically just us and Carey that were the major players with true affiliates. Companies got bought by venture capital. When we finally got to 2014, I did a deal with the Marcou group because they wanted a bigger opportunity to consolidate BostonCoach and Dav El, which then put together the biggest brand in the industry.
BTN: What are some of the big changes related to corporate travel that you saw over that time?
Solombrino: In the old days, if you called somebody and went to 10 cities on a roadshow, you got 10 different bills, so I created centralized reservations and call centers for chauffeured car and a global system. We also introduced centralized rates. I got a lot of grief from my competitors. The customers wanted simplicity, and the simpler you make chauffeured car, the more people will use our services.
BTN: How do you see competition with ridehailing apps shaking out?
Solombrino: There was no ridesharing five years ago. They come onto the marketplace and get a pass from the government in regulations and how they pay people, and they start to impact how people look at ground transportation. If there was a time [for me] to move on to something in the travel sector that's not related to ground, now was the time to do it.
I would not want to be on the buying side of Uber right now. Their losses are even bigger, and they have an even bigger market cap. Where is the growth going to come from? If anybody can pull this off and make this a successful public offering, it's [Uber CEO Dara Khosrowshahi]. But those drivers are employees. They should be paid as employees. They don't get paid overtime, workers' comp, unemployment or [health insurance], and that's just not right. The Department of Labor is looking, along with IRS, and at some point, something is going to happen one way or another. If they're forced to change their business model, it's going to have a massive financial impact on those companies. Autonomous car is an entire generation away, and until that happens, I don't know how they replace the labor piece of it. Long-term, I think this is a problem for Uber and Lyft. I think it's all coming to a head.
BTN: Regardless, what will the impact be on the chauffeured transportation providers and other traditional transportation suppliers?
Solombrino: Technology has driven transportation, and you will see the tech getting more involved. Everyone has an app, a phone and a map to follow the car. That's become standard, and if you don't have it, you can't compete. The chauffeured car industry is shrinking every year. There are less and less operators still covering more demand because you have the strongest economy in 50 years with huge demand. People are willing to go downstream and not worry about their duty of care. That fills the gap, and that's why these companies are successful on the growth revenue side. Taxis have been the most impacted, but they've caught up in some places. In New York, taxis are recovering because taxis have gone on one app. Then you have a city like Boston, where they wouldn't agree on the app and don't have one and taxi in Boston is decimated.