BTN 2022 GROUND TRANSPORTATION SURVEY & REPORT

Travel buyers were most satisfied with the quality of drivers who are company employees, earning a score of 4.18 in Business Travel News’ 2022 Ground Transportation Survey. Driver quality edged out cleanliness, which was 2020's top metric, but also beat well-serviced cars. The survey asked buyers to rate 10 criteria related to chauffeured transport on a five-point scale.

Only two other criteria—availability and ease of booking, and driver screening and duty of care—scored at or above a four. The scores for the 10 metrics ranged from 3.44 to 4.18, which was significantly below the 3.78 to 4.50 range from 2020.

The survey was not conducted in 2021 because of reduced usage during the Covid-19 pandemic.

Overall, two-thirds of buyers said that customer service levels from chauffeured transportation providers remained the same over the past 12 months, down from the nearly 78 percent who indicated as much in 2020. About 17 percent said service had improved, tying the figure from the prior survey. The percentage of respondents saying it had gotten worse, however, more than tripled to 17 percent from 5 percent.

Seeing the quality of drivers who are company employees perform the best was interesting to Jeff LaFave, managing director of corporate mobility specialist and ground transport platform provider HQ.

"Almost every [corporate]… allows employees to take taxi or ride share, where you have no control over the type of vehicle, no control over cleanliness, not even control over the quality of the driver," he said. On the other hand, he said, nearly every chauffeured ground company also uses independent operators, “even ones you think don’t.”

So when it comes to sourcing chauffeured ground transportation partnerships, driver quality—and whether they are true employees of the partner company—may be a more important point for vetting. And, said LaFave, with pricing pressures currently playing out across the industry, rate differences among ride-share, chauffeured ground companies with affiliate providers and those with direct employees may be less than buyers would imagine. “The disparity between the two has closed,” he said.

_{Pricing and Negotiations}

The metric that moved up the most in rank, was negotiating price and amenities, which improved to fifth place from ninth. But with pricing on the rise, buyers are unlikely to beat their deals from previous agreements. They are also unlikely to keep those rates, according to LaFave, who categorized recent negotiations into two camps:

"One is, 'We need to try to do something about this now,' because pricing is way up, and they can't get the pricing they used to get," he said. "The other camp is, 'Let's just hold off where we are, maybe we'll get a 10 percent increase in the interim.' Because they know if they go through the [request-for-proposals] process, they will see significantly higher prices."

LaFave gave an example in which he was working with a European banking client, and pricing is about 40 percent to 50 percent higher on average than the rates that were set three years ago, due to such pressures as inflation and fuel prices.

"There's inflation across the world," he said. "Fuel surcharges will not go away and might even go higher. Corporate clients have to understand there are going to be serious expenses compared to before [the pandemic]."

Chauffeured ride-hailing provider Blacklane global sales director Joseph Seal-Driver said, despite cost increases, providers have to strike a balance when it comes to rates. "It's important that we don’t reduce margins, and we don't want to make ourselves too expensive for customers," he said. "In some instances, we are honoring set rates. In others, we are passing on fuel costs incrementally on a journey-by-journey basis. It's something we have to manage."

Challenges Underscore Innovation & Change

Seal-Driver added that in some ways, the increased pricing is helping to push people to go electric quicker. He noted that while the desire for safety and reliability continues to be high, "an even stronger trend is toward sustainability," he said.

A few negative trends include staffing challenges, Seal-Driver said, and he continues to see headwinds around vehicle supply, both of which also have affected the rental car side of ground transportation. "Chauffeured companies are struggling to get vehicles," he said.

LaFave agreed that demand is well outstripping supply, "and won't be solved soon," he said. "That means if you used to use two suppliers, you might need four to six." Buyer respondents, however, rated availability and ease of booking at 4.10, the third-highest metric.

Another trend is that clients are looking to manage their ground services on a global basis, LaFave said. "It might be because of data and the whole usage of car services, or for more seamless solutions for employees," he said, adding that several RFPs recently were for global booking solutions.

Business travel consultancy KesselRun agrees. "Among our client base, we are seeing a reliance on chauffeured services in a lot of international markets, in a lot of higher-risk locations," KesselRun VP of client services Krissy Herman said. "There are policies and an encouragement of travelers to get a car and driver in those particular circumstances versus just hailing a ride share. It's also just more of a guaranteed comfort when you land at 3 a.m., and you won't have to stand around and wait for a ride-hailing company."

_{Ride-Hailing Results}

Still, more and more companies are turning to ride-hailing solutions, at least domestically, and this year BTN queried buyers about their usage of those apps. Nearly 20 percent of respondents have a preferred contract in place with ride-hailing suppliers, and more than 36 percent allow and encourage travelers to use them.

Nearly 30 percent of respondents don't allow or disallow those services, while 8.4 percent don’t allow them but will reimburse travelers who use them. Only 5.6 percent explicitly disallow ride-hail usage and do not reimburse travelers for them.

"They've definitely become more common," Herman said, adding that clients started to become more receptive to them in policies over the past 18 months. "We have seen a fairly significant uptick and interest in securing preferred ride-hailing partners among our client base. They see it as an opportunity to give their traveling population another option."

Of the seven metrics rated for ride-hailing apps, the criteria rated highest at 3.79 was service transparency, where driver ratings and differentiated service levels in the app indicate the product quality the traveler can expect. Second at 3.71 was quality of data and reporting—which happened to be the lowest-rated metric at 3.44 for chauffeured services.

"When you get into a taxi, there is no tracking, there's no mechanism of duty of care," Herman said. "When you get into an Uber or Lyft, you can share location, you have information about the driver, you are able to see that they've been vetted so to speak. Overall, ride-hailing services have always had the convenience factor."

"When you get into a taxi, there is no tracking, there's no mechanism of duty of care," Herman said. "When you get into an Uber or Lyft, you can share location, you have information about the driver, you are able to see that they've been vetted so to speak. Overall, ride-hailing services have always had the convenience factor."

Where ride-hailing suppliers can improve the most is on complaint or problem resolution, which buyers scored at 3.54.

Some of the segment's headwinds are similar to chauffeured and rental car challenges: vehicle and staffing shortages, and rising prices. "I've seen more surge pricing coming out of the pandemic than I have historically, any and all times of the day," Herman said, adding that in addition to gas prices and demand over supply, operating expenses and labor costs have gone up as well.

Another increasing challenge is longer wait times. "I have seen across the board that they are not as available as they were pre-pandemic," Herman said. "It also seems that drivers may be vetting the trips they pick up a little more, whereas historically they weren't. Still, with ride-share, you can't beat the convenience and have that ability at your fingertips."

Some of these challenges—in particular, car and driver shortages—have pushed what in the past may have looked like unlikely partnerships. Ride-hail giant Uber this spring integrated New York City’s two taxi hailing apps, Curb and Arro, into its platform, following similar taxi integrations in Spain, Germany and South Korea. Under the deal, Uber users can request a cab through the Uber app for the UberX rate. Drivers see the rate upfront and either accept or reject it. Users cannot request Ubers through the taxi platforms.

CEO Dara Khosrowshahi has said more Uber-taxicab partnerships are on the way, blurring the lines between the two services, and potentially complicated travel programs that still wish to limit ride-hail services.