Duty of Care Matters More Than Price for Buyers of Chauffeured Car Services

As traditional chauffeured suppliers and ride-hailing apps battle to coexist, travel buyers prioritize service and safety over price in dealings with their chauffeured car suppliers.

Buyers in a recent BTN survey ranked complaint/problem resolution as the most important aspect of their chauffeured programs. Not far behind that were ease of making bookings and insurance for drivers. Buyers also were most satisfied with suppliers' performances in these categories.

Buyers' satisfaction with their chauffeured suppliers decreased from 2016 in all categories except price/value ratio. They cited more detailed reporting, more transparent billing and more consistent service among ways suppliers could improve satisfaction. "I have to have more than five companies because every exec has had a bad experience with one of the companies so I can't get anyone to decide to just use one—or even two or three," one buyer said. "It's an incredibly high-touch business with a complete lack of attention to those details."

Even so, buyers' priorities validate chauffeured suppliers' focus on driver training, background checks and other duty of care elements as ways to provide value in the ground transportation space. Oddly, they might have ride-hailing suppliers to thank for that. Travel buyers' priorities differed before the advent of ride-hailing apps, Dav El/BostonCoach CEO Scott Solombrino said. "Ground wasn't the focal point, but now it's becoming the really hot duty of care topic," Solombrino said. "We see major corporates every week, and that's what they're hyperfocused on. They want to see the differentiation."

Several chauffeured suppliers, meanwhile, are concentrating on ease of booking. This year, Dav El/BostonCoach parent company Marcou Transportation Group acquired car service platform GroundLink to help develop an on-demand platform for chauffeured transportation suppliers. Solombrino said the company is making progress on that. Meanwhile, ground transportation booking platform Blacklane, which offers near on-demand booking and fixed pricing for chauffeured service, has broadened to 255 cities in 54 countries, including more than 70 cities in the Asia/Pacific region, said chief revenue officer Sascha Meskendahl. Blacklane also has integrated into Amadeus, he said. "We are investing heavily in being integrated into the different booking channels out there to make a seamless booking experience. And we want to be where travelers actually travel so they can have one consistent solution out there in the world."

Travel buyers reported low satisfaction with their suppliers on negotiating pricing. Even though they also ranked this category low in importance, it still represented the largest gap between buyers' satisfaction and importance. Solombrino said corporate clients are concentrating less on pricing and more on duty of care. "Pricing has leveled off," he said. "When we were coming out of the recession, most of them renegotiated their deals and got what they needed. We have nowhere else to go."

Meanwhile, there are signs that Uber and Lyft's charge into corporate ground transportation is leveling off. First-quarter year-over-year growth in the number of Uber expense transactions Certify processed was the slowest growth since Certify started tracking it, though negative publicity bore some of blame. Both Uber and Lyft also have focused on improving their offering to the corporate travel space, however, including reporting and working with buyers to keep rides in policy.

In the end, there's room for both, considering the BTN survey's price/value category outranked price alone in terms of importance, Blacklane's Meskendahl said. Less than 30 percent of buyers said migration from chauffeured cars to ride-hailing apps had been considerable or significant in their programs, and nearly 20 percent saw no shift. "We're not so much into inner city mobility, trying to undercut prices on short trips where you might not care so much about the quality of the car," he said. "If you want a reliable service to get you to the airport at 6 a.m., that's where something like Blacklane comes into the game."

Of course, autonomous cars once again could shuffle buyers' priorities for their ground transportation suppliers. At the recent Association of Corporate Travel Executives conference in New York, Lyft chief business officer David Baga projected that half Lyft's rides would be in autonomous vehicles in five years, and perhaps all rides would in 10 years. "While autonomous vehicles are closer than you think, they're also further away. Technology capabilities are accelerating and the costs are going down, but to see an autonomous vehicle able to serve all of the rides, we're really not ready."