Ground Cos. Hold Increases

Keeping a close eye on ever-increasing insurance and fuel prices, ground transportation companies are using technology to drive down costs, maintain rates for travel buyers and provide added value to travelers.

Empire International CEO David Seelinger said his company has managed to avoid passing along surcharges, despite rising insurance and fuel costs, by using a real-time Web product that allows for instantaneous confirmations and receipts within seconds, saving the company money from a labor, reservations and dispatching perspective. "We are closely monitoring our internal overhead, and we've been very successful in reducing labor costs through technology changes and upgrades," he said.

In this "buyer's market," Seelinger added, Empire likely will keep its rates steady to continue to be competitive. "Insurance and fuel has affected us tremendously. We're keeping our margins at an acceptable level, but it's been a very difficult time."

Empire maintains a "proactive, preventative" approach when it comes to safety issues, which also reduces insurance claims and keeps costs down. "It's something you can't avoid doing," Seelinger said. The company has introduced an in-car camera with a digital chip that monitors g-forces to record events and driving habits. The record automatically is downloaded if jarring movements and erratic driving sets it off. Each incident is reviewed by in-house safety instructors and discussed in a meeting with HR and the driver. "It has reduced the number of accidents we've had in the past two years by 60 percent," Seelinger said.

While BostonCoach senior vice president Todd Stephens said his company is taking a "wait and see" attitude with regard to rising insurance costs, the firm is passing along a 4 percent fuel surcharge to its customers to offset gas prices.

Serving as a cost- and time-saver, BostonCoach's Ground Control, a relatively new Web-based application, enables travel managers to see their spending history with the company, print receipts, sort down to the individual traveler and generate customized reports that serve as monthly audits. The application also allows booking of a car while booking hotel and air travel. Ground Control also enables travelers to manage their own travel online, with access to receipts and the ability to have confirmations, reminders or pickup instructions sent wirelessly to Web-enabled mobile phones or PDAs.

"We will likely have a price increase of some sort when we evaluate pricing in December," said Dav El CEO Scott Solombrino, whose firm has charged a 6 percent insurance/fuel surcharge for the past three years. "It's a tough time. The consumer is not going to have a choice because supply and demand are going to catch up with each other, or even demand will exceed supply, because a lot of car companies are going to be out of business because they can't get insurance to cover them. Right now there are too many chauffeured transportation companies out there competing for too small a market."

Solombrino said the industry "has been decimated since 9/11 and that effect has not changed because the insurance industry has not priced itself back to pre-9/11 rates. Insurance is the single biggest issue." He added, "We've absorbed all these costs and we're taking a hit for it—millions in lost profits over the past two years, money that will never be recovered."

Meanwhile, Carey International last November implemented a fee to deal with rising costs in the form of a $5 per trip insurance surcharge. However, executive vice president Rick Anderson displayed optimism for the coming year. "At this point, I don't see any changes," he said. "I would like to see us holding the line on prices for the near future, while still moving ahead with our other initiatives."

While Carey is making strides in technology to make it even easier for travel buyers and travelers to book cars and get receipts, the company is focusing more on the passenger experience. The Carey Car, a specially outfitted and more spacious Lincoln Town Car, is being rolled out. Each vehicle features a pull-down writing desk, rear power source for laptops and phones, rear control of the right front passenger seat, temperature control and radio.

Within BostonCoach cars, Stephens said the most valuable amenity is power. The company offers three power ports for charging mobile phones, laptops and PDAs. The firm also is experimenting with Wi-Fi in its vehicles, although a major rollout of the technology is not immediately planned. "Wireless is something that will become much more widely used in the industry when the technology becomes more stabilized."