There’s been an evolution of sorts in the ground transportation landscape as many traditional black car operators are diversifying their fleets into larger vehicles and motor coaches, moves designed to respond to the expanding needs of travel programs and the companies they serve.

Gary Kessler, CEO and president of Carey International, Inc., sees this trend as an opportunity for managed travel programs to better serve their clients.

“In managed travel programs, many companies have had sophisticated programs around transient travel for a while, but meetings and events within travel has not necessarily fallen under that umbrella,” he says. “More recently, as the programs have evolved, going from the hotel space to the ground space, more clients have looked for this sort of ground transportation.”

Jens Wohltorf, CEO and co-founder of Blacklane, has seen the tectonic shifts and says it’s a trend that those in the industry need to pay attention to in order to stay successful.

“Our driver partners do the large majority of their business with sedans, business vans and SUVs; however, we also see them diversifying by adding some larger coaches or partnering with a coach provider,” he says. “Blacklane gets requests every month for companies that want a mix of coach and sedan service for an event.”

Moshé Simon Cohen, director of sales for miMeetings, notes the industry is witnessing some traditional ground transportation companies buying fewer of the smaller vehicles and replacing those with larger vehicles in the bus and sprinter categories in response to increased demand.

“For a good many in the traditional limo industry, the obvious objective seems to be to survive the dislocation by operating a model outside of what is being impacted heavily by ride sharing services,” he says. “Times change. Businesses change. The travel space as we once knew it has changed.”

Meeting Needs
There are numerous reasons why ground transportation companies are changing direction, with the most important being that the traditional space has become highly competitive and vehicle diversity allows black car companies to transport groups with diverse needs. Anything that lets a company excel in its strengths of high service and local transportation expertise is a differentiator.

“New players have entered with totally different skill sets and budgets, which are putting the legacy industry at risk,” Wohltorf says. “There are many ways to innovate, such as investing into technology and seamless customer experience. However, moving into a smaller niche is also an option to secure some business.”

Seth Marcus, executive vice president, meetings and event sales for EmpireCLS Worldwide Chauffeured Services, says in the past, the company would send bus work to different bus companies, but now it owns and operates its own motorbus coaches. The decision to diversify in this direction was made to meet the growing marketplace demand and needs of those involved in meetings and events.

“We found that no one was paying much attention to that segment in the limo service industry,” Marcus says. “We’re handling corporate transportation for meetings and events and leisure travel as well, with the capacity to handle large groups and meetings into the thousands or handle that one traveler with very specific, individualized needs.”

At Blacklane, the company partners with a network of licensed and insured professional drivers for the large amount of event business it manages and is constantly looking for the best partners with all types of vehicles.

“We focus on sedan, van and SUV transportation, but we also know the best coach companies. This is how we have managed events for hundreds of travelers at a time, for the same companies but often in different locations year after year,” Wohltorf says. “While larger companies are adding coaches, many smaller, high-quality services do not have one. Blacklane, however, can combine the fleets of multiple local companies to give travel managers a single provider, without them having to shop and do the legwork on their own.”

Kessler believes the dust has settled on Uber and ride sharing companies, and corporations know what they are and their limitations. Now the spotlight is on how more traditional ground transportation companies can adapt to changing demand to help the event management space and corporate travel in the space.

The key to success, he says, is to educate travel managers and planners on the difference between group transportation and true logistic management service. “We’ve been in this space for 30 years and manage over 4,000 corporate events a year, so this is nothing new for us,” Kessler says. “We’ve seen competitors come into this segment because they have fewer options, so we continue to expand our already sizable fleet, focus on always trying to refine our game, standardize our process for addressing events and show that we are meeting the needs of meeting planners.”

miMeetings, Cohen says, has embraced the change by using this chapter of industry interruption as a fork in the road to create forward driven disruption. “By offering our full suite of technology based solutions and services, we are able to offer a supply model of affordable luxury emphasizing value while eliciting a unique passenger experience,” he says. “We are guided by a passenger mantra of a sophisticated luxury ride available at a very accessible price. It is about doing away with the vanilla of transportation as we know it and connecting with the rider by offering an elevated experience of style and service that lifts their spirits while simultaneously being affordable.”

Drivers of Change
The strategy of many ground transportation companies is to compensate for the loss of revenue by shifting to a different vehicle mix. The goal is to insulate themselves from the impact of ride-sharing services given the fact that these newcomers for the most part aren’t currently offering larger vehicles.

“That seems to be an attempt to address their current business model which is in peril,” Cohen says. “However, the benefits are limited and the challenges are vast. A successful transition presupposes they already have a clientele that requires such vehicles. It is heavier-seating-inventory and does not necessarily solve customer needs.”

However service is crucial, he adds, especially in a context where demarcation is vital. Beyond simply fulfilling the need for transport, passengers and procurement professionals are looking for simplicity of booking, visibility, data access and control over the spend.

The biggest benefit of the diversified fleets for travel managers is they can have one supplier for all their demands, including events. Buyers are interested in service levels, technology and apps, and now have a more diverse fleet that can better serve their program needs.

“Service levels and duty of care are always the first requirement. No matter how great your website or apps are, quality on the ground is what customers need and deserve,” Wohltorf says. “That’s why we invest, for instance, in extra vetting and on-site coordination for events. You have to be able to accommodate schedule changes, delayed travel, weather, traffic and other spontaneous variables.”

There is a lot of activity in the industry, with smaller operators getting eliminated or being absorbed by larger entities and bigger players looking to gain a global presence. That trend results in limited options for corporate event managers.

“The ascent of technology in the industry is showing great benefits, and corporations benefit as prices go down,” Cohen says. “Technology platforms such as miMeetings allow corporations to buy better and get more for less when sourcing ground transportation.”

Managed travel programs are able to leverage spend to get more discounted rates on routes that are most frequently traveled, while creating better relationships and improving reliability and safety for their customers.

Marcus notes that with some of the concerns around ride sharing companies of late, travel managers are looking more closely at the safety, security and confidentiality aspects of a ground transportation company. That’s of chief concern to most CEOs and corporations.

“It’s really important to these executives,” he says. “The ease of use of Uber is incomparable. Their technology is great and you can get a car whenever you want to, but the fact of the matter is, you don’t know who you are in the car with. When you book a car with a well-known ground transportation company that has spent the money on full background checks and run a full panel of drug and alcohol screenings pre-employment, it makes for a smarter choice.”

More than Apps
Vehicle diversity is not just about coaches, as many ground transportation companies are also expanding to low-emission and electric vehicles, a trend that is expected to balloon in the coming years.

“Corporate travel managers want to lower companies’ carbon footprints and see the travel program as essential for corporate social responsibility,” Wohltorf says. “As automakers increase production of electric vehicles, we expect rapid adoption by black car services.”

Additionally, more apps and improved technology should further the trend as well. “We’re in the luxury, chauffeured transportation category, and while mobile applications are important, the industry is lacking technology,” Marcus says. “There is specific technology out there that ground transportation companies are gravitating toward so we can all get on the same system, and that will allow us to provide the on-demand experience.”

While there is a lot of buzz around new apps designed to make things easier, Kessler says there is not a lot of substance to what they are truly doing.

“To survive today, most companies, ourselves included, have created strong mobile applications and web-based apps to facilitate better transient payment. When it comes to managing events, the secret is to be able to use those applications across a defined number of people at a single event,” he says. “Companies not able to adapt to a group setting are going to have a challenge. Our goal has been not just to manage manifest but be able to tie in the great suite of applications for arrangers and travelers so we create information parity across the experience.”

There is a heavy trend toward meetings and events group transportation and many of the companies are looking to fulfill the industry’s wants by becoming aggregators of vetted ground suppliers to meet the needs of both the passenger and the event planner.

“The group transportation market is an expansive one. Privacy and security are important concerns, not only for CEOs and key executives, but for all attendees,” Cohen says. “The pairing of higher inventory of larger vehicles and breakthrough technology allow for the delivery of alternative ground solutions for the benefit of both business and leisure passengers. It allows the efficient transfer of a larger number of people to large events at a new level of service not offered before.”

While these fleets are used for large groups at trade shows, sporting events and internal events such as sales conferences, there are no limits to how they can be utilized. Groups have become the primary motivator for vehicle diversity so a ground transportation company can accommodate the optimum number of passengers in high-quality vehicles.

“Executives and VIPs value discretion and flexibility,” Wohltorf says. “They often request the same driver when they book consecutive days in the same city. They also need drivers to accommodate their extended meetings, changed locations and needs for peace and quiet. For them, rides are often the only calm they have in a busy day.”