Universal standards and duty-of-care are becoming top priorities for corporate ground transport programmes, says Catherine Chetwynd
Traditionally, ground transport didn’t usually get to play a starring role in corporate travel programmes. Recurring bugbears included lack of policy guidelines, multiple booking channels and untracked spend.
“Corporates tend to focus on areas such as hotels and air,” says Alastair Dickenson, client business manager for Wings Travel Management. “But ground transport should be an important part of a carefully managed travel programme.”
Jean Towers, business manager at Chambers Travel, thinks technology may be a contributory factor to low take-up: “In general, it is difficult to load ground transport on to online booking tools,” she says.
Also, Uber and other apps are disrupting the industry. These are technology companies, not taxi operators, and corporate concerns include a lack of guaranteed operating standards, vetting of drivers, training and insurance.
“A lot of companies use us because they don’t want their people driving after a long flight,” says chief executive officer of Tristar Worldwide Chauffeur Services, Dean de Beer. “It doesn’t make sense to employ a service to put someone in a car with a driver who has had very little sleep.” And as Carey International vice-president Greg Mendoza points out: “Statistically, the most dangerous element of a trip is the travel by road.”
INDUSTRY STANDARDS
This raises duty-of-care issues – which, to many companies these days, comes equal first place with cost savings, if not ahead of them. One standard of which the main players in the transportation industry are proud is the training of their drivers, ensuring reliability and consistency; plus monitoring to ensure drivers have a number of breaks and do not exceed prescribed driving hours.
“We work very closely with our drivers and our chauffeurs to ensure that it’s a good place to work, so that we minimise the reasons to leave and continue to attract the right quality of people coming in,” says Mendoza. “We can do that very well because in London, for example, all our chauffeurs are full-time employees, which is unusual in an industry that relies heavily on contractors.”
The majority of Tristar’s drivers are also employees and the recruitment process is rigorous, with assessments during induction and ongoing checks once drivers are taken on. “Our investment pays off because we have very low staff turnover, so we can give the consistent, reliable service clients like,” says De Beer.
One Transport, part of the Mountview House Group, uses around 500 operators nationwide, providing the best part of 70,000 vehicles throughout the UK. “Coverage and service levels are important and we give an agreed and agreeable rate,” says chairman and CEO Geoffrey Riesel.
Operators go to great efforts with partners abroad, too. Carey International had large demand in Mexico for a long time and it took about four years to find a suitable partner to work with in Mexico City; that involved several trips to visit potential suppliers, going through every aspect of their service and bringing them up to speed where necessary.
Tristar has offices in the UK, US and Hong Kong, to ensure that suppliers are vetted by people who are close to the regional geography and culture. And Groundscope’s 450 service providers worldwide, soon to grow to more than 800, have been vetted by the company, “to ensure that the service we are providing is meeting the same standards, regardless of where the business traveller is”, says managing director John McCallion. The company also provides clients with benchmarking data from 150 cities worldwide, comparing its tariffs with the market rate.
Some operators point to further downsides to Uber and similar apps, such as the inability to book ahead, book for someone else, or get fixed quotes for trips or VAT invoices – and they say it is not clear who is responsible if there is a complaint.
Contracted rates are another issue: “Uber’s business model does not work for business or corporates, especially the surge pricing, which means fares can vary at peak times by as much as 800 per cent,” claims Riesel. “With One Transport, the price the client contracts is the price the client pays.
“In the taxi and for-hire business, the bad always drives out the good in a race to the bottom,” he says. “Using reliable, experienced, safe, quality suppliers delivers a quantifiable return on investment. The cost associated with using cut-price providers – such as missed meetings and flights, and improbable charges – is also probably quantifiable.” And VAT invoices are a given, which they are not if travellers use local minicabs, though VAT recovery is still a thorny issue outside the UK.
More positively, disruptors have upped the game by bringing rates down and putting pressure on the rest of the industry to update technology. There are apps serving the corporate sector, such as Hailo for Business, which offers a no-fee, no-contract tool (and website) with access to 15,000 black cabs and executive cars. Cabs can be booked up to four weeks in advance and the company’s business portal allows it to charge to a central account and automatically log journeys against cost centres or other references. Hailo can provide a full history of drivers booked and transactions made.
PERCEPTION PROBLEMS
Chauffeur-drive does not come without caveats, and the perception problem that prevailed during the worst of the recession, around 2009-10, lingers. Riesel says clients ask for chauffeur-driven cars “probably less than in past years”.
“Just having the word ‘chauffeur’ in there was a barrier,” says Carey’s Mendoza. “We worked very hard to change the perception of our service – it is high quality and there are elements of what we do that are premium and attract the relevant pricing. But there are large parts of our service that are accessible and make a lot of sense.”
Being picked up by a car and driver in countries such as Brazil, Mexico, Russia and India makes perfect sense, avoiding the vagaries of local cab companies, touts and dodgy types posing as cab drivers, with the attendant risk of kidnap, rip-off fares and/or being driven to a cashpoint and forced to withdraw money. First-time visitors to a country are particularly vulnerable to exploitation.
Booking technology is provided by all suppliers and (in theory) it can be integrated into corporate booking tools. Some are already connected to global distribution systems (GDSs), although Tristar’s De Beer notes that many of its bookings still come via email or telephone, particularly for complex bookings.
In addition, says ATPI’s UK managing director Adam Knights, “the advantage of consolidating taxi services, if you are using end-to-end travel and expense management, is that you can see the total cost of a trip, which you cannot when an individual pays cash for a cab and puts it through expenses”.
But negotiated rates can end up being more expensive than using a local minicab company because there is a middle-man, and fares have to be loaded into the GDS, which also adds cost.
Head of strategic relations for Business Travel Direct (BTD) Mark Bevan says: “Look at suppliers’ terms and conditions as well. Sometimes, you find they charge different rates if there are traffic jams and waiting time, with the meter ticking three times as quickly; and when travellers pay for transport by credit card, some companies whack on a card fee of 5-7 per cent, and that can add up to a lot.”
IN THE MANAGEMENT LOOP
Suppliers give detailed management information (MI), and this can either be downloaded from the their websites or provided in agreed formats and at agreed intervals. The BBC uses a range of ground transport (including rail, coach and self-drive) and uses One Transport for taxi services. It receives detailed MI in 13 categories, such as ‘booker’, ‘passenger’, ‘booking platform’, ‘CO2’ and ‘waiting time’.
“They provide online booking, which is accessed via our intranet booking portal, and they back that up with a call centre if we want to make telephone bookings,” says the BBC’s head of category sourcing, Tracey Morris.
“Our online booking tools are complex, so our needs from suppliers are complex, with individual cost codes, technology requirements and so on. We need them to invest time and money, so we have a long contract. They won the account in a fully competitive tendering process because of their high standards.”
The corporation uses taxis for those working unsocial hours, such as late-night presenters and engineers who work throughout the BBC’s 24-hour schedules; and, while the BBC would normally put cost savings as the top priority in RFPs, when it comes to travel and transport, Morris weights duty-of-care at 50/50 with price in her RFPs.
“We take our duty-of-care towards staff and contributors very seriously,” she says. This includes the requirement that One Transport audits the taxi companies it engages: making sure the vehicles they use are absolutely roadworthy and so on.
If there were any doubt as to the savings that can be made through using a managed service with attendant negotiated taxi fares, rather than struggling in-house with a large ground transportation requirement, the BBC saves, on average, £1.2 million a year by doing just that. This contributes to the corporation’s aim to cut annual costs by £700 million by the end of 2016-17.
A well-run ground transportation programme can deliver comprehensive savings and, in an increasingly competitive industry, it should be possible to negotiate good rates that are not so low they make it impossible for the supplier to live up to the high standards they are all selling to compete with the disruptors.
The last word goes to Geoffrey Riesel: “Customer service comes at a cost, and companies like One Transport are guarding their reputations jealously.”
Prioritise your ground transport programme
- Quantify your requirements.
- If drivers are not directly employed, how do suppliers vet and monitor them?
- Check terms and conditions for rogue elements.
- Technology, especially booking tools, are commonly provided by suppliers; but ask, for example, if they have been integrated with corporate tools.
- Negotiate penalties – for example, the cash amount for ten minutes late, half-an-hour late and so on.
- Identify and list clearly your MI requirements.
CASE STUDY
TMC Corporate Blue contracted Tristar to provide ground transport for managing director of Australian company Suitpack, Scott Fraser. This was for a multi-country sales trip, covering 26 cities in 23 days, involving more than 50 journeys, starting in the Far East and ending in the US.
“It was imperative that our international team used their local knowledge of each area, including customs and languages, to ensure that the client was kept on schedule and had a smooth trip,” says Tristar CEO Dean de Beer.
Tristar planned Fraser’s itinerary to ensure that he was met on time by a chauffeur who knew exactly where he needed to be and when. The company also kept Corporate Blue informed of progress, so that the agency knew when Fraser had been collected and dropped off. The trip passed without a hitch.
“I am so glad that I trusted Tristar with Mr Fraser’s transfers,” says senior corporate consultant Shelly Loades. “Such a marathon trip meant it was imperative that everything went like clockwork and Tristar made my job so much easier.
“The service that I experienced was phenomenal and everything ran to plan. I was also impressed with the feedback emails that I received for every transfer, assuring me that each one had gone smoothly. Ultimately, Mr Fraser was very happy with the on-ground service.”