BTN 2023 GROUND TRANSPORTATION SURVEY & REPORT

Chauffeured business has further recovered according to some supplier sources, with expansions both to new U.S. cities and globally. Travel buyer satisfaction scores for the service, however, dipped to an average of 3.82 from 3.93 last year for the 10 criteria rated on a scale of one to five in BTN's annual Ground Transportation Survey.

Just two criteria showed slight improvements: clean, well-serviced, new model cars, which also was the top performing item at 4.17, and complaint/problem resolution. Like with the car rental sector, the former benefited from better vehicle availability than the prior year, sources said. As for improvements in problem resolution, "our company and industry has become more responsive and they understand," said RMA Worldwide Chauffeured Transportation president and CEO Robert Alexander, who also is the president of the National Limousine Association.

"One thing about our industry is, we are problem solvers," he added. "When an issue comes up, we stand behind the service, and the customer stays happy so they come back time and time again. Responding on a timely basis is extremely important; [customers] stay loyal to you. There's a place to call and someone to deal with, not just email or an app. It's really important that we have the right technology, but also the high touch that accompanies that."

Still, all other criteria queried in the survey declined, and eight of the 10 had scores below 4.0. The only other category above that level was quality of drivers who are company employees, at 4.07.

Last year, the challenge was having business come back in late 2021, then it came to a "screeching halt" the first quarter of 2022 because of Covid-19 variants, Alexander said. When things recovered again, "we had a mad dash to hire," and then the call center and accounting, they become "overwhelmed," he added. "Now the challenge we are seeing is to make sure the fleet is what our clients want, training people and making sure we have the right amount of resources to maintain service levels."

Staffing, too, can still be an issue, said South Florida-based A1A Limo president Rick Versace, who also is the treasurer of the NLA. "The great resignation, whatever is going on, it has gotten better this year," he said. "It's a marked improvement when you put an ad out and the quality of people it attracts. But there's still a holdover. Some people are afraid to come out and still don't have that urgency. They're very selective where they work and what they do."

Alexander agreed, but noted that RMA has grown its human resources department so onboarding is better, training is better and candidate vetting is better. "We want to make sure the culture is managed even better," he said, especially with some work from home now occurring. "We have an events and meeting team that is so busy. Why waste their time getting to and from work? We use technology. You miss some [in-person] collaboration, but you also get extra collaboration."

The category that dropped the most was negotiating pricing and amenities, to 3.63 from 3.92 a year prior.

"It's almost a case study perspective between supply and demand," said HQ managing director Jeff LaFave. "So much more demand than supply has come back; therefore, suppliers aren't in the position where they need to negotiate. They can be selective on who they work with and demand prices they think are fair. More and more clients are accepting the pricing and not even negotiating."

"That's a product of the success our industry is experiencing," Versace said. "There's not a lot of wiggle room for negotiation. The mindset of the industry is, if you want quality service, then book with us. It might be a little more expensive, but quality costs more money. There might not be as much negotiation if [a buyer] is looking for discounts."

Relatedly, pricing transparency also took a hit this year, dropping to 3.75 from 3.82. "We've seen clients get frustrated when a passenger gets an automated price and then what is billed after the fact," LaFave said. "There's complexity depending on the region and the supplier. Service changes, taxes, congestion pricing—those can make that final price different, and we've seen passengers and clients push back on that."

To help resolve the issue, HQ has used machine learning capabilities to look at historical ride data and know that even if a ride was quoted at $X, it knows the final price will come in closer to $Y, so that can be anticipated at the time of booking, LaFave said.

Alexander said RMA has changed its structure to band pricing. For example, there's a certain fare if a passenger is going within five miles, then it increases from there. "We wanted clients to wrap their heads around what they were paying," he said, adding that now when they ask why a 45-minute ride costs a certain amount, the company can say why.

Another category with a steep drop was service consistency across affiliates, down to 3.72 this year from 3.91 in 2022. Some sources noted that higher prices play a role in that as well, meaning the pricing is so high that it might not make sense to take a slim margin or even a loss on an out-of-town ride, or that a smaller affiliate might not be able to do as much vetting as a larger company.

Green Rides?

While sustainability continues to be a hot topic, fewer than 22 percent of survey respondents said it was a component of their chauffeured program. Among those who did flag it as part of their programs, 45 percent said their preferred supplier meets all or most of their sustainability needs, while 55 percent said only some, few or none of their needs were met.

Like with car rental, some sources thought the figure was low.

"One reason it is low [could be that] a lot of people don’t even know how to attack it," LaFave said. "How do you figure it out globally? How do you pull that data together? For suppliers in different cities, how do you know what greenhouse gas emissions look like there?"

Still, it is a "big focus and a big opportunity," he added. "We are doing a lot in that space and not only to measure GHG emissions and what is happening there, but also all types of mobility options. How do you make the right decision? Is there an electric vehicle option, hybrid, public transportation? There are different ways to deal with it. And more clients are focusing on sustainability and truly doing it, not just measuring it but how to reduce it upfront."

Versace noted that for the larger corporate clients he deals with "all the [request for proposals] we've seen lately involve some kind of sustainability platform" he said. The smaller companies are not as concerned about it yet, but "I think you will see that increase as time goes on."

Clients also want to know what the company is doing, Versace added. "We have some EVs in the fleet, and we changed all our lighting in the office and garage to LED, we have a paperless office, a recycling program. All the things we can address, and we will continue to do so. I'm hoping that over the next three to five years we could be totally electric with all vehicles being EVs. We get a lot of requests for that service, and corporations want to see you are moving in that direction."

Ride-Hailing Surge

Overall, there might be some switching going on to ride-hailing services from chauffeured rides.

"[Chauffeured rides] will always be a need in international and/or high-risk destinations," KesselRun VP of program management Krissy Herman said. "We are seeing some of our professional services firms and clients try to encourage use of alternatives like ride-hailing to help save money outside of those international or high-risk locations."

Other situations where chauffeured services are preferred for travelers is for, say, a 2 a.m. arrival into a U.S. domestic location where a traveler might have a concern about ride-hailing being available or an unwillingness to rent a car, and they would feel more comfortable knowing that they had a prearranged chauffeured service, Herman said.

"Those use cases are always going to remain," she added. "Otherwise, we've seen a trend of maybe this is not as necessary for the general traveling population. Maybe we only arrange for it in certain cities for certain types of travelers who may be exceptions."

Indeed, the percentage of survey respondents that said they had a preferred ride-hailing partner shot up to 34 percent from 20 percent last year. And another 32 percent encourage their use. The percentage that disallow their use outright or don't allow but reimburse anyway dropped to 7 percent from 14 percent a year ago.

"From a risk standpoint, we are recognizing that ride-hailing has afforded an opportunity for better tracking, security and vetting of drivers," Herman said. "We have seen all of our clients adopt ride-hailing within their policy as acceptable. I would be surprised to see if any corporates did not mention them in their policy today."

Plus, travel managers and procurement teams recognized that travelers were doing this anyway, Herman said. "Establishing a preferred vendor allows for company perks, but also an opportunity to wrap their arms around data without having to go to expense tools and dig through tons of expense data."

Further, Herman said ride-hailing firms seemed to have grown their sales staff. "It is much more common to hear outreach from vendors in the last 12 months saying, "Have you looked to establish a relationship with us? We can do XYZ for you within your program as a preferred vendor.' "

Still, overall travel buyer satisfaction scores for ride-hailing services declined slightly from last year, to 3.64 from 3.67 for the seven criteria surveyed. Only one criteria showed a significant jump from last year, and that was vehicle availability, to 3.78 from 3.68 on a five-point scale. Duty of care and pricing and amenities stayed about the same, up just 0.01 point each. Other criteria scores declined.

Anecdotally, Herman has seen longer wait times in many cities than pre-pandemic, and "it also has to do with greater usage and adoption of ride-hailing as a general option," she said. "I don't think the availability is as great as pre-Covid, but it is better than last year."

The largest rating declines were for pricing transparency, service transparency, complaint/problem resolution, and quality data and reporting.

"Pricing transparency is not a surprise," Herman said, citing fuel surcharges that have been more broadly applied. "There are still some travelers who are maybe newer to ride-hailing platforms, and they get a price and don't understand surge pricing or taxes and fees added in certain markets. That is maybe more of an education component as it becomes more standard in corporate programs."